Parks v. Hartford Insurance

Barclay, J.—I. Defendant asserts that the transaction (in which the notes held by plaintiffs were given) between Plippin and the firm of Meyer & Aronson amounted, in effect, to affixing a mortgage charge to the homestead of the former, and, as such, should be regarded as illegal and void under the constitution and laws of Texas. It is enough on this point to say that, giving full force to the facts alleged by defendant, and assuming, for the moment, that effect may be given here to the Texas homestead laws, the transaction would be, at worst, merely voidable, not void absolutely and at all events. Until set aside, at the instance of some one entitled to question it, no stranger (such as defendant here) to the homestead right can successfully impeach it. So far as concerns the immediate parties to the transaction, and all before the court in this action, the notes will be considered as valid, and the security for their payment as voidable only, but, until avoided, attaching to such interest or • estate in the realty in question as Plippin’s conveyance transferred. The exact extent of that interest or estate we need not attempt to define. It is involved in some obscurity, despite the able rulings of the courts in Texas on the subject of homesteads. But this, at least, is certain, that Plippin’s deed (by way of security for the notes) would be effective in several contingencies to pass some sort of substantial interest in the insured property itself, under the decisions in that state. Jordan v. Godman, 19 Tex. 273; Seare v. Sears, 45 Tex. 557; Reece v. Renfro, 68 Tex. 192; McElroy v. McGriffin, 68 Tex. 208; Irion v. Mills, 41 Tex. 310. This it would do even if the transaction in question be treated as creating, in substance, a mortgage as defendant claims. But the actual form, which the security for the notes took from the written instruments between Plippin and Meyer & Aronson, was that of [381] securing a vendor’s lien for the.purchase money, as represented by the notes. If that be regarded as the real nature of the transaction, plaintiffs’ case would be much stronger under the laws of Texas and^ rulings there interpreting them. Texas Const., art. 16, sec. 50; Burford v. Rosenfleld, 37 Tex. 42; Lee v. Welborne, 71 Tex. 500; Berry v. Boggess, 62 Tex. 239. Looking at the matter in either aspect, the plaintiffs had such an insurable interest in the property as would support a recovery on the facts here exhibited, and the policy was properly transferred to them, according to its terms. A mortgagee has an insurable interest in the property covered by the mortgage lien, at least to the limit of the indebtedness secured, as has, likewise, a vendor, to the extent of his lien for unpaid purchase money. So it becomes unnecessary to the decision of this case to determine whether plaintiffs would have a standing in this action by reason of their interest (as assignees .of the policy and notes) in the contract of insurance, as distinguished from an insurable interest in the property itself. II. The policy before us recites that it is “subject to the three-fourths value clause. ’ ’ That language appears in the written portion of the instrument. No other part of it enlarges that phrase into any sort of intelligible agreement that can be dealt with by a court. It stands alone and unexplained. No attempt is made in this action to reform the agreement, upon principles applicable to mutual mistake, so that it should include a stipulation on the subject alluded to, but defendant seeks to give to the phrase itself, “ subject to the three-fourths value clause,” the force of an'agreement that, in event of total loss, the property should not be valued at a sum greater than three-fourths of the actual value in ascertaining the amount to be paid for total insurance. This cannot be done. The language used cannot fairly be expanded by construction to embrace that meaning in the present state of the pleadings and evidence. [382] III. The action of- the trial court' excluding the policy in the East Texas Fire Insurance Company from consideration in estimating the total concurrent insurance, was abundantly supported by the evidence. The kind of insurance contemplated by the policy in suit, referring to the clau.se for the apportionment of the loss, is valid insurance, or such as has, at least, original validity. The policy in the East Texas company was not of that sort. It was obtained under the mistaken impression that the policy sued on here, and others, had been canceled, and the insured so represented. This was sufficient to avoid that policy from the beginning, and that company’s refusal to pay it appears just on the facts shown. The words in this policy* “ without reference to the solvency or .liability of other insurers,” cannot fairly and reasonably be said to include contracts of supposed insurance; which, for any sufficient cause, fail ever to become operative. Those words refer to valid insurances, which, though in force at the time of the loss, may not constitute legal liabilities, because of some breach of the terms of the policies, or otherwise. The judgment is affirmed, with the concurrence of all the members of the court.