Estes v. Great American Ins. Co. of New York

• Citation: 112 S.W.2d 153
• Decision Date: 10 January 1938
• Docket Number: No. 5840.,5840.
• Court: Court of Appeal of Missouri (US)
• Parties: ESTES et al. v. GREAT AMERICAN INS. CO. OF NEW YORK.

112 S.W.2d 153

ESTES et al. v. GREAT AMERICAN INS. CO. OF NEW YORK.

No. 5840.

Springfield Court of Appeals. Missouri.

January 10, 1938.

Appeal from Circuit Court, Laclede County; W. E. Barton, Judge.

Action by Ollie Estes, administratrix for the estate of C. Dennis, deceased, and others, against the Great American Insurance Company of New York on a fire insurance policy. From an adverse judgment, the defendant appeals.

Reversed.

Bradshaw & Fields, of Lebanon, for appellant.

Phil M. Donnelly and J. Andy Zenge, Jr., both of Lebanon, for respondents.

ALLEN, Presiding Judge.

This is an appeal by the Great American Insurance Company from a judgment against it on a policy of fire insurance for the principal sum of $1,000 and $66.25 interest. The respondents are Ollie Estes, administratrix of the estate of C. Dennis, deceased, Albert Dennis, Laura Martin, Ollie Estes, Maggie Brooks, and Lillian Barnes. Their petition alleged that the plaintiffs (respondents) were the administratrix and heirs at law of C. Dennis, and that they had an interest, as owners, in the property insured by the appellant. They alleged that Ollie Estes, administratrix, had an interest in the insured property as administratrix and as a trustee for the heirs at law of C. Dennis.

The appellant's defense to the suit on the policy was lack of insurable interest at the time of the loss and breach of the sole and unconditional ownership clause on the part of the named assured, and that the other plaintiffs to the suit were not parties to the contract or assureds within the contemplation of the parties, and that the suit could not be maintained by them nor for their benefit.

The policy was for a period of three years from January 20, 1934, and insured "Ollie Estes, Administratrix for the Estate of C. Dennis, deceased." It covered a house, smokehouse, and cellar in the village of Phillipsburg against loss by fire.

The policy in suit was a renewal of a similar policy issued three years previously by the appellant on a written application procured by its then agent, Roy Senn. By the time that policy expired, Miss Tracy McFarland, who worked in the bank, had become the appellant's subagent at Phillipsburg. She met Ollie Estes one day and told her that the policy was about to expire, and asked her if she wanted it renewed. Mrs. Estes told her "to renew it like the other one." Mrs. Estes did not sign a new application blank, but Miss McFarland filled out a blank similar to the old one, sent it in, and the company mailed her the new policy, which was placed in the bank with other papers belonging to Ollie Estes and to the estate of C. Dennis. The premium on the policy was paid by Mrs. Estes out of assets in the estate of C. Dennis.

Miss McFarland had known Mrs. Estes for thirty years, and knew that she was the administratrix of her father's estate when the policy was written, and that she managed the insured property, collected the rent, and looked after the tenants.

C. Dennis died on April 29, 1930. He willed all his property, real and personal, in equal shares to his five children, the respondents. One of the daughters, Ollie Estes, was appointed administratrix (not executrix) of his estate June 15, 1930. It was in that capacity and at the suggestion of the judge of the probate court that she procured the first fire insurance policy. There were no debts against the estate, and during its administration Ollie Estes had distributed about $6,000 among the five heirs. She made final settlement and was discharged as administratrix by the probate court of Laclede county June 6, 1934.

On October 5, 1934, the circuit court of Laclede county rendered a judgment in partition, finding that the insured property could not be divided in kind, and ordering it sold at the February, 1935, term of the circuit court, for cash, to the highest bidder; the proceeds of the sale to be divided among the five respondents as owners.

On October 25, 1934, the insured premises were totally destroyed by fire. Miss McFarland took the policy of insurance to Mrs. Estes, and they detached the notice of loss, Mrs. Estes signed it "Ollie Estes, Administratrix of the Estate of C. Dennis," and sent it to the company.

In a few days a company adjuster called on her and inspected the loss. Subsequently he mailed her a blank proof of loss on which she wrote "total loss" and returned without completely executing. Within sixty days of the fire the adjuster again called on her and offered to return the premium, telling her that the policy was void because she had been discharged as administratrix in June preceding the fire. It was some time after the fire, but within sixty days, that the adjuster, the subagent Miss McFarland, or any one connected with the insurance company discovered that Mrs. Estes had been discharged as administratrix.

Under this state of facts there can be no question but that the ownership, meaning thereby the title or fee, to the insured premises passed to the five individual respondents as the heirs at law or devisees of C. Dennis, and not to the administratrix. Title passed to them at the instant of the testator's death subject only to the right of the administratrix to sell it for the purpose of paying any debts of the deceased. And with the passage of title to the heirs, of course, went the right to the possession of the premises with all the incidents of ownership. State, to Use of Enyart, v. Doud et al., 216 Mo. App. 480, 269 S.W. 923; Thorp v. Miller, 137 Mo. 231, 38 S.W. 929. It does not necessarily follow, however, that by reason of the administratrix procuring the policy in her capacity as administratrix that the policy's sole and unconditional ownership clause was breached, nor that there was any fraud or false representation on her part as to the condition of the title to the insured property or of her interest in it. Such policy requirements are valid and binding provisions (4 Couch, Cyclopedia of Insurance Law, §§ 913-915) but must be considered in connection with the other clauses of the policy and the intention of the parties to the contract. Here the company issued a policy of fire insurance, the insuring clause of which provides that it "does insure Ollie Estes, Administratrix for the Estate of C. Dennis, deceased," and therefore knew when it wrote the policy that Ollie Estes as administratrix was not the sole and unconditional owner of the property. The company, as well as the administratrix, was bound to know that the title to the real estate passed to the heirs and not the administratrix. The company did not and could not expect the named assured to be the sole and unconditional owner of the subject of the insurance. It wrote the policy with full knowledge of the condition of the title and knowing that the administratrix, as such, was not the sole and unconditional owner it must have contemplated that these provisions would be inapplicable to this policy. If it did not so intend, its conduct was a waiver of their applicability. Pearman v. Farmers' Mut. Fire Ins. Co., Mo.App., 214 S.W. 292; Tiffany v. Queen Ins. Co., 199 Mo.App. 36, 200 S.W. 728.

Nor could there be any fraud or false representation on the part of the administratrix as to her ownership or the condition of the title as the appellant argues. In the original policy, as well as in the one in suit, her title and interest as an assured was stated to be that of administratrix, and, if true, could not be the basis for a claim of fraud or false representation. Mers v. Franklin Ins. Co., 68 Mo. 127.

The same principles do not apply, however, to the appellant's contention that the administratrix cannot recover on this policy because she did not have an insurable interest in the subject of the insurance, as administratrix, at the time of the issuance of the policy and at the time of the loss. It is fundamental that there must be an insurable interest on the part of the named assured in the subject of the insurance both at the inception of the risk and at the time of the loss. Furthermore, this requirement is not a promissory warranty which the company may waive. Insurable interest is a requirement of public policy against a gambling contract and cannot be waived. La Font v. Home Ins. Co., 193 Mo.App. 543, 182 S. W. 1029; Wisecup v. American Ins. Co. of Newark, 186 Mo.App. 310, 172 S.W. 73; Hirsh v. City of New York Ins. Co., 218 Mo.App. 673, 267 S.W. 51; Sun Ins. Office v. Merz, 64 N.J.L. 301, 45 A. 785, 52 L.R.A. 330.

And so, the first serious question presented is whether or not Ollie Estes, administratrix of the estate of C. Dennis, deceased, had an insurable interest in the insured property in her official capacity as administratrix. While considerable research has revealed no cases in Missouri on the point, and few elsewhere, we are of the opinion that an administratrix, as such, has an insurable interest in any property which belonged to her decedent, at least so long as her administration lasts, and especially so if the estate she represents is insolvent or there are not enough personal assets with which to pay debts. Herkimer v. Rice, 27 N.Y. 163; Clinton v. Hope Ins. Co., 45 N.Y. 454; 1 Cooley, Briefs on Insurance, 2d. Ed., p. 224.

This is true even though the real estate passed to the heirs for the reason that, under our statutes, an administratrix may procure an order and sell the real estate to pay debts of the decedent. And the administratrix in procuring a fire insurance policy does so for the protection of the creditors of her estate, and she is not then a mere intermeddler without an insurable interest. She does not have an estate or property in the subject of the insurance, but she does have a direct pecuniary interest in the preservation of the property, and that is sufficient to constitute an insurable interest.

And it is arguable that an administratrix of a solvent estate has an insurable interest in the real estate of her decedent, Sheppard v. Peabody Ins....