Crescent Insurance v. Camp

Stayton, Chief Justice. This cause was before this court at a former term, and is reported in 64 Texas, 521, where a statement of the case will be found. The policy made the basis of this action contained a provision that if the interest of the assured in the property be any other than the entire, unconditional and sole ownership of the property for the use and benefit of the assured * * * it must be so expressed, in the written portion of the policy, otherwise the policy shall be void.” A part of the stock of goods insured had belonged to a firm composed of N. Ellenstein and one Guensberg, deceased, at the time the policy was issued to Ellenstein. At that time Ellenstein held the goods as surviving partner or as administrator [505] of the estate of Guensberg, if in fact he had not sold the interest of the estate of Guensberg to another person. Whether he held them as surviving partner or administrator, it is not essential to determine. On the former appeal the clause of the policy above quoted was held binding upon the parties, and on the last trial the appellees, who hold through Ellenstein, seek to avoid the effect of that ruling by evidence tending to show a state of facts which called from the court below charges as follows: “14. When Guensberg died, Ellenstein succeeded to all his rights as surviving partner of the firm, taking all the stock and other assets, not absolutely, but in trust for the creditors and others entitled thereto; and when he qualified as administrator of Guensberg’s estate he did not become the owner of the goods, but held them only for the purpose of administering them so as to pay the debts of Guensberg due individually, or as a member of the late firm, and to pay the residue or remainder, if any there was, to those entitled thereto as heirs or legatees of Guensberg. And whether there was any such res-due, which he still held, or was responsible for when he effected the insurence represented by the policy sued on, is for you to say from the facts when examined in the light of the law in this charge given. If there was such a residue or remainder, then he was not the sole, entire and unconditional •owner, and they can not recover, and you will find for the defendant, unless you find for the plaintiff upon the knowledge of defendant’s agent as to the status of the ownership when the policy was issued, concerning which point you will be hereafter instructed in paragraph 19. “15. If, however, you find from all the facts and circumstances in evidence, that Ellenstein, as surviving partner and administrator, had, at the time the insurance was effected, paid in the settlement of the firm or individual indebtedness of Guensberg’s estate, and in payment of the expenses incident to his management thereof, and in settling and discharging Guensberg’s portion of the firm indebtedness such sum and amount, in all, as was equal to or in exceess of all Guensberg’s interest in the assets of Ellenstein & Guensberg, and such sum as fully, fairly and entirely consumed and absorbed the whole of Guensberg’s estate, so that there was no residue or remainder to be administered, or to which any heir, or legatee or any person having a right thereto through Guensberg was entitled, [506] then these facts, if you so find, extinguished Guensberg’s interest in the property, and had in law, the effect to make Ellen-stein, within the meaning of the policy, sole owner, as required by section four of the policy.” The first of these charges was correct, but an inquiry arises as to the correctness of the second. The character of ownership made requisite to the validity of the policy is the highest known to the law. To give it, it was not only requisite that the assured should be clothed with the legal title to the goods with the right to dispose of them, and confer upon his vendee an indefeasible title, but it was further necessary that the ownership should be entire, sole, without condition, and for the benefit and use of the assured. Whether Ellenstein was holding as surviving partner or as administrator of Guensberg’s estate, he was a trustee, not clothed with a sole and unconditional ownership for his own use and benefit. This was the ruling on the former appeal. The last part of the charge given, however, assumes that while this was Ellenstein’s relation to the property by reason of his holding as surviving partner or administrator, that this relation might be changed by his disbursing in settlement of the firm or individual indebtedness of Guensberg’s estate, and payment of the expenses of his management, a sum equal to or greater than the value of the interest of Guensberg in the-partnership property. That Ellenstein was not sole owner for his own use and benefit at the time of the death of Guensberg is not claimed, and to make such his relation to the property subsequently, it must-be shown that through some transaction which, in law, amounts to a sale, the Guensberg interest had vested in Ellenstein at the time the policy issued. The facts, by the charge, declared to have such effect, we are of opinion could not confer such ownership on Ellenstein as is necessary to be shown to support the policy. He was a trustee and could not sell to himself. By the payment of firm debts out of his own means, as surviving partner he doubtless would have the right to reimbursement, to the extent Guensberg’s estate was benefited thereby, out of the partnership property, but this would not give to him an unconditional and sole ownership. As surviving partner, Ellenstein had a lien on the partner [507] ship effects, through which he could enforce the payment of partnership debts, and the fact that he may have paid them would in effect only make him a creditor, with a lien no higher in degree than had he as surviving partner. As administrator, he could not directly or indirectly buy any of the property of the estate of which he was the representative; nor could he take any part of the estate at its appraised value (Rev. Stats., art. 2083), or purchase for his own use, directly or indirectly, any claim against it. (Rev. Stats., art. 2050.) We think the charge given was erroneous. The appellee pleaded in estoppel that, although there was no statement in the policy as to the true state of the ownership of the property at the time the policy was issued, this was fully made known thereby to the agent of the company who issued the policy. The court instructed the jury that such fact would operate as an estoppel on the company, and in this there was no error. (Ins. Co. v. Ende, 65 Texas, 118.) There was, however, a direct conflict of evidence on this point, and it is impossible for this court to know whether the jury found in favor of appellees on this point or not, hence the giving of the erroneous instruction before referred to will require a reversal of the judgment; and it is therefore ordered that the judgment of the court below be reversed and the cause remanded. Reversed and remanded. Opinion delivered October 19, 1888.