Opinion
No. 34772.
January 12, 1942. Suggestion of Error Overruled, February 23, 1942.
1. TRUSTS.
A "resulting trust" in favor of a wife is presumed from the purchase of property by her husband with her money and the taking of title in his name, but that presumption is rebuttable.
2. INSURANCE.
Where wife furnished money to buy business and to buy and install additional furniture and equipment, and husband agreed to conduct business as wife's agent, but bill of sale was made out to husband, wife had an "equitable title" which would have enabled her by bill in chancery to acquire the unconditional legal title, and that title sufficiently complied with provision of fire policy requiring insured's interest to be "unconditional and sole ownership."
3. INSURANCE.
Generally, an insurer by issuing a fire policy without inquiry concerning incumbrances on property insured or requiring written application "waives" any policy provisions with respect to incumbrances and "assumes the risk" of existing incumbrances, especially if insured makes no statements or stipulations in reference thereto and has no knowledge that such information is material or that risk would have been rejected had insurer known the facts.
APPEAL from the circuit court of Warren county, HON. R.B. ANDERSON, Judge.
Wells, Wells, Lipscomb Newman, of Jackson, for appellants.
Appellee through its agent Andrews issued the policy involved to appellant Mrs. Ford, without making any inquiry, written or verbal, concerning the title to or encumbrance on the property insured, and by so doing waived all conditions in the policy with reference to sole and unconditional ownership and with reference to encumbrance, and insured whatever interest Mrs. Ford had in the property.
United States Fidelity Guaranty Co. v. Yost, 183 Miss. 65, 183 So. 260; Liverpool London Globe Insurance Co. v. McGuire, 52 Miss. 229; Georgia Home Insurance Co. v. Holmes, 75 Miss. 390, 23 So. 183; Scottish Union National Insurance Co. v. Wylie, 110 Miss. 681, 70 So. 835; Liverpool London Globe Insurance Co. v. Dulaney, 190 Miss. 404, 200 So. 440; Mitchell v. Aetna Insurance Co., 111 Miss. 253, 71 So. 382; 26 C.J. 295, 318; Glens Falls Insurance Co. v. Michael et ux., 74 N.E. 964; Phenix Insurance Co. of Brooklyn v. Fuller (Nebr.), 74 N.W. 269; Murphy et al. v. Liverpool London Globe Insurance Co. (Okla.), 214 P. 695; Philadelphia Tool Co. v. British American Assurance Co., (Pa. Sup. Ct.), 19 A. 17; Gregerson v. Phoenix Fire (Wash.), 170 P. 331; Collum v. National Fire Insurance Co. (Wis.), 195 N.W. 333; Great Southern Fire Insurance Co. v. Burns Billington (Ark.), 175 S.W. 1161; Hanover Fire v. Bohn (Nebr.), 67 N.W. 774; Wolpert v. Northern Assurance Co., 29 S.E. 1024; Dwellinghouse Insurance Co. v. Hoffman (Pa.), 18 A. 397; Union Assurance Society v. Nalls (Va.), 44 S.E. 896.
Mrs. Ford's interest in the property was sole and unconditional ownership within the meaning of the policy.
Westchester Fire Insurance Co. v. Green, 223 Ala. 121, 134 So. 881; McClellan v. Greenwich Insurance Co., 107 La. 124, 31 So. 691; Doliver v. St. Joseph F. M. Insurance Co., 128 Mass. 312, 35 Am. Rep. 378; Caplis v. American Insurance Co., 60 Minn. 376, 62 N.W. 440; Hare v. Headley, 54 N.J. Eq. 545, 35 A. 443; Steinmeyer v. Steinmeyer, 64 S.C. 413, 42 S.E. 184; Union Assurance Society v. Nalls, 101 Va. 613, 44 S.E. 896; Fireman's Fund Insurance Co. v. Meschendorf, 14 Ky. Law Rep. 757; Phoenix Insurance Co. v. Fuller, 53 Nebr. 811, 74 N.W. 269, 40 L.R.A. 408, 68 Am. St. Rep. 637; American Artistic Gold Stamping Co. v. Glenn Falls Insurance Co., 20 N.Y.S. 646; Imperial Fire Insurance Co. v. Dunham, 117 Pa. 460, 12 A. 668, 2 Am. St. Rep. 686; Collins v. London Assurance Corp., 165 Pa. 291, 30 A. 924; Phoenix Insurance Co. v. Swann, 41 S.W. 519; Morotock Insurance Co. v. Rodefer, 92 Va. 747, 24 S.E. 393, 53 Am. St. Rep. 846; Carrigan v. Lycoming Fire Insurance Co., 53 Vt. 418, 38 Am. Rep. 687; Wolpert v. Northern Assurance Co., 44 W. Va. 734, 29 S.E. 1024; Lancaster v. Southern Insurance Co., 153 N.C. 285, 69 S.E. 214, 138 Am. St. Rep. 665; Connecticut Fire Insurance Co. v. Manning, 160 F. 382, 87 C.C.A. 334, 15 Ann. Cas. 338; Lloyd v. North British Mercantile Insurance Co., etc., 161 N.Y.S. 271, 174 App. Div. 371; Hughes v. Miller's Mutual Fire Insurance Co., 147 Tenn. 164, 246 S.W. 23, 28 A.L.R. 797; Groce v. Phoenix Insurance Co., 94 Miss. 201, 48 So. 298; Liverpool London Globe Insurance Co. v. McGuire, 52 Miss. 229; Phoenix Insurance Co. v. Bowdre, 67 Miss. 620, 7 So. 596; Home Insurance Co. v. Gibson, 72 Miss. 58, 17 So. 13.
We say there was no breach of the policy conditions as to sole and unconditional ownership, but if there was, this provision was waived by appellee, and likewise was the condition of encumbrance.
Culkin, Laughlin Thames, of Vicksburg, for appellee.
It is our contention that the fact that Mrs. Ford had no interest whatsoever in the property, and that Mr. Ford had mortgaged the property to Mr. Fisher, and gave no notice thereof to Mr. Andrews, the insurance agent, but wholly concealed this fact, warranted the court in peremptorily giving a verdict in favor of appellee.
Appellants state in their brief that Mrs. Ford's interest in the property met the conditions of the policy. The fact is that Mrs. Ford had no interest in the property whatsoever.
It is very generally agreed and, indeed, repeatedly decided in this state that the clause in the insurance policy as to sole and unconditional ownership is reasonable and valid, and that a breach of such stipulation, unless waived by the company, will excuse the company from liability.
Certainly, in the case at bar, the stipulations of this clause were not waived by the company, because the company knew nothing whatsoever relative to any incumbrances on the property insured or any retention of title to same, and we contend that no agent of a company would have the power to waive a stipulation of this nature.
St. Paul Mercury Indemnity Co. v. Ritchie, 190 Miss. 8, 198 So. 741.
The meaning of the words "sole and unconditional ownership in fee" is well established. The ownership of an insured is sole and unconditional when no other person has any interest in the property as owner, and the quality of the estate is not limited or affected by any condition.
26 C.J. 172.
See, also, Bacot et al. v. Phenix Insurance Co., 96 Miss. 223, 50 So. 729; 2 Clement on Insurance, 152.
A condition that, if insured is not the sole, entire and unconditional owner, the policy shall be void, is reasonable and valid and failure to disclose the real state of the title, if not sole, etc., will be fatal, although the insured was not questioned as to that fact.
1 May on Insurance, Par. 287.
See, also, Schroedel v. Humboldt Fire Ins. Co., 158 Pa. 459, 27 A. 1077; 13 A. E. Encyclopedia of Law (2 Ed.), 233; Hartford Fire Insurance Co. v. Keating, 86 Md. 130-145, 38 A. 29, 31, 63 Am. St. Rep. 499; Rosenstock v. Ins. Co., 82 Miss. 674, 35 So. 309; Syndicate Ins. Co. v. Bohn, 65 F. 165.
In the case at bar, the policy itself, containing, as it did, the contract that it should be void if the assured was not the sole and unconditional owner, was a pointed inquiry of the assured whether that interest was the sole and unconditional ownership of the property described, and the assured's silence and acceptance of the policy was the answer. The policy itself, according to all of the authorities, was notice to the assured that the company deemed her interest that of unconditional ownership; that it assured against loss to that extent only; that it expressly excluded every interest from the insurance, unless the assured immediately notified it that there was a different interest, and procured a written consent thereto. Did the appellant, Mrs. Ford, who was also the insured, notify appellee that Mr. Fisher had a mortgage on the property involved, in which mortgage he had retained title to this property? The silent acceptance of the policy by the assured, Mrs. Ford, closed the contract and bound the assured to the agreement tendered by the policy, that every other interest but that of unconditional ownership was excluded from the promised indemnity. This is the language of the court in Columbian Ins. Co. of Alexandria v. Lawrence, 2 Pet. 25, 49, 7 L.Ed. 335, 344; Waller v. Northern Assurance Co. (C.C.), 10 F. 232; Collins v. St. Paul Fire Marine Ins. Co., 44 Minn. 440, 46 N.W. 906; Lasher v. St. Joseph Fire Marine Ins. Co., 86 N.Y. 423, 427; Weed v. London L.F. Ins. Co., 116 N.Y. 113, 22 N.E. 229; Diffenbaugh v. Union F. Ins. Co., 150 Pa. 270, 24 A. 745, 30 Am. St. Rep. 805; Fuller v. Phoenix Ins. Co., 61 Iowa 350, 16 N.W. 273; Waller v. Northern Assur. Co., 64 Iowa 101, 19 N.W. 865; Mers v. Franklin Ins. Co., 68 Mo. 127, 132; McFetridge v. Phenix Ins. Co. of Brooklyn, 84 Wis. 200, 54 N.W. 326; Henning v. Western Assur. Co., 77 Iowa 319, 42 N.W. 308; Liberty Ins. Co. of New York v. Boulden, 96 Ala. 508, 11 So. 771; Pelican Ins. Co. v. Smith, 92 Ala. 428, 9 So. 327.
Mr. Fisher, the mortgagee, cannot legally sue and recover because the policy was void from its inception, having been issued to Mrs. Ford, in whom there was no unconditional ownership of the property.
Baldwin v. German Insurance Co., 75 N.W. 326; Glenn Falls Insurance Co. v. Porter, 33 S.E. 473; Hanover Fire Insurance Co. v. National, etc., Bank, 34 S.W. 333; Genesee, etc., Assn. v. U.S. Fire Insurance Co., 44 N.Y.S. 979; American Central Insurance Co. v. Cowan, 34 S.W. 461; Dorris v. Insurance Co., 135 Mass. 251.
Even if it should be conceded that the policy was valid as to Mr. Fisher, the mortgagee, he could not successfully sue in a court of law. The policy is for $2800, while his claim is for $850. He cannot accordingly maintain a suit originally begun in the circuit court. Lowrey v. Insurance Co., 75 Miss. 43, 21 So. 664; East v. Insurance Co., 76 Miss. 697, 26 So. 691. In both of these cases cited the right in the mortgagee to sue was put expressly on the basis that such mortgagee's interest equalled the amount of insurance, which is not true in this case. Mr. Fisher's entire claim as alleged in the declaration, and made a part thereof by the assignment from Mrs. Ford to Mr. Fisher, amounts to $850, and the policy was for $2800. Hartford, etc., Insurance Co. v. Davenport, 37 Mich. 609. The cause of action cannot be split on a single insurance policy. Whoever sues must be able to enforce the whole of the contract.
Argued orally by W.R. Newman, Jr., for appellants, and by John Culkin, for appellee.
One McGee owned the furniture and equipment and was the operator of a business known as the Tip-Top Sandwich shop in or near Vicksburg. It was under a chattel mortgage to Fisher, payments on which were past due. McGee became ill and was unable either to continue the business or to pay the mortgage, and he surrendered and delivered the property to his mortgagee in consideration of his release from the debt; and thereafter Fisher was dealt with as the owner. One Jack Ford desired to acquire the business and all the personal property connected therewith, and along in September, 1939, he arranged with Fisher for its purchase; but Ford had no money, and it was thereupon also arranged that Ford's wife, appellant herein, would furnish the money necessary to make the first or down payment, as well as the subsequent payments, and that she would supply the money for the purchase and installation of additional furniture and equipment, which were installed, and all this she did with the further arrangement that Ford would conduct the business as his wife's agent, and that all business licenses should be taken in her name, that the bank account should be kept in her name and that all checks should be signed by her, and this, too, was done.
And all the aforementioned was understood by Fisher, but when he later made out the bill of sale for the property, retaining title as security until the balance of the purchase money should be paid, he made it to Jack Ford instead of Mrs. Ford. This bill of sale was dated November 18, 1939, and was immediately filed for public record. About that time Ford called in the agent of appellee company, who was fully authorized to execute policies of fire insurance, and requested that a policy be issued on the said personal property, and in the name of Mrs. Ford, as the insured, it being stated to the agent at the time by Ford that this was desired for the reason that it had been the money of the wife which had been put into the business. An inventory of the property amounting to an estimate of about $3,600 was delivered to the agent, and the agent personally inspected the property. The agent asked no questions about the title, or about any encumbrances or liens, and nothing was said to him about the title or ownership other than as above mentioned, and no statement was made to him about any encumbrances or liens. No written application was requested or made.
The policy was issued on November 27, 1939, for $2,800. The property was totally destroyed by fire on the night of January 18, 1940. The policy contained the usual printed provisions that the contract would be void "if the interest of the insured be other than unconditional and sole ownership or if the subject of the insurance be personal property and be or become incumbered by a chattel mortgage." The insurance company denied liability, because of said provisions, and upon the trial of the action against it to recover on the policy the court, at the close of the testimony for the insured, granted a peremptory charge in favor of the defendant, and from the judgment entered the insured has appealed.
Under the stated facts and except as to the Fisher lien, the wife was the equitable sole owner of the property here in question. We said in Shrader v. Shrader, 119 Miss. 526, 537, 81 So. 227, that a resulting trust in favor of a wife is presumed from the purchase of property by her husband with her money and the taking of title in his name. This presumption has a strengthened basis in the position of trust and dependence which the wife ordinarily occupies in respect to her husband; and while the presumption is rebuttable, it is to be observed that in the case now before us there was no rebuttal, but, on the contrary, a confirmation of the presumption. See the text and the elaborate references to the cases 26 Am. Jur., pp. 730-1, sec. 104.
And while the Shrader case and most of the others speak of trusts in land, the rule applies also to any property which may be the subject of a present transfer by way of devise or bequest, or gift or sale. A.L.I. Rest. Trusts, sec. 74, Comment b.
It follows from what has been said that, at the time of the issuance of the policy of insurance to her, the wife had such an equitable title as would have then enabled her by a bill in chancery to draw unto herself the unconditional legal title, and such an equity is a sufficient compliance with the policy condition as to sole and unconditional ownership. 4 Appleman Insurance Law, sec. 2458, and cases cited in the notes; Groce v. Phoenix Ins. Co., 94 Miss. 201, 207, 48 So. 298, 22 L.R.A. (N.S.) 732; Phoenix Ins. Co. v. Bowdre, 67 Miss. 620, 635, 7 So. 596, 19 Am. St. Rep. 326.
The property was admittedly encumbered in part by a lien in favor of Fisher for the balance of the original purchase price; and we shall concede, but without so deciding, that the lien present in this case was one within the definition of a chattel mortgage applicable to such a policy, and we shall also lay aside the fact that the lien was upon only the original property and not upon any of the new or additional installations; and we do this because we are of the opinion that the great weight of modern authority sustains the text found in 4 Couch on Insurance, p. 3170 as follows:
"As a general rule, the issuance of a policy of insurance without inquiry as to encumbrances on the property insured, or requiring written application, waives any policy provisions with respect to encumbrances, especially if the insured makes no statements or stipulations in reference thereto, and has no knowledge that such information is material or that the risk would have been rejected had insurer known the facts, the theory being that, by issuing the policy without inquiry, the insurer assumes the risk of existing encumbrances and waives any conflicting provisions of its policy which is printed in a common form without reference to specific cases." See also the text and the numerous cases cited thereunder in 29 Am. Jur., pp. 498-9, sec. 620, and 26 C.J., p. 318.
We believe that the rule as above stated is just and wholesome; we align ourselves with it, and we are, therefore, of the opinion that upon the record as it now appears before us the peremptory charge should not have been given.
Reversed and remanded.