Republic Insurance Co. v. Silverton Elevators, Inc.

493 S.W.2d 748 (1973)

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Nature of the Case

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Facts

Tidwell (P) was at all times an officer, director, and the general manager of Silverton Elevators, Inc. (P). Silverton (P) owned and furnished to Tidwell (P) a house near its location, together with the insurance on the house and on Tidwell's (P) household goods, as part of his compensation as general manager. Since 1964, D's local agent had issued and renewed insurance policies in the name of Silverton (P) covering the dwelling and its household goods. the local agent, who had the authority to issue the policies and receive the premiums, knew that the household goods belonged to Tidwell (P) and that Silverton (P) was carrying the insurance for the benefit of Tidwell (P). On April 17, 1970, a tornado destroyed the house and the household goods. On the date of the tornado, The policy covered in damages $10,000 insuring against loss from windstorm the specifically described 'occupied dwelling' for $7,000 and 'household goods . . . while in the described building' for $3,000.00. The local agent admitted that at the time he issued the policy he knew the facts heretofore mentioned with respect to actual ownership of the insured property. Silverton (P) paid the premium. D acknowledged coverage on the house and paid $7,000 for its damage, but it denied any liability to Ps on the household goods. Ps brought this suit against D claiming coverage to the limit of the policy ($3,000) on the household goods owned by Tidwell (P). D defended on the grounds that Silverton (P) had no ownership and therefore no insurable interest in the household goods and that the policy as written was limited by its terms to household goods owned by Silverton Elevators, Inc. (P), the named insured. Ps argued that when D issued its policy and accepted premiums with full knowledge of the true ownership and relations between Ps, it waived the right to complain about any lack of ownership or insurable interest of the named insured and was estopped from denying coverage on behalf of Tidwell (P). The trial court awarded Silverton Elevators (P) $3,000 'for the use and benefit of Carl L. Tidwell (P).' The judgment was affirmed on appeal and D appealed.