George Howard, Jr., Justice.
We are to decide whether the holding of the trial court declaring that a fire insurance policy obtained by appellant, wherein appellee, his cotenant, was not designated as an insured, inured to the benefit of appellee is supported by the preponderance of the evidence.
THE FACTS
Appellant and appellee were divorced on February 27, 1974. The divorce decree provided that the ownership of the dwelling house and lot owned by the parties be converted from an estate by the entirety to a tenancy in common. Appellee was granted exclusive possession of the property until such time as the youngest child of the parties reached his majority or until the appellee remarried. Appellee remained in possession of the dwelling house from February, 1974, to January, 1975, when she remarried. During the period from February, 1974, to January, 1975, appellee paid all of the monthly installment notes due Farmers Home Administration under an indebtedness in the sum of $12,300.00 and secured by a note and. mortgage. The note and mortgage were jointly executed by appellant and appellee. Appellee also paid the insurance premiums during this period in the sum of $360.00 which was required under the terms of the mortgage.
Appellee discontinued the monthly mortgage payments and the insurance premiums in January, 1975, and consequently, the insurance coverage lapsed for nonpayment of premiums.
In March, 1975, appellant procured a policy of insurance in the sum of $26,000.00, at the request of Farmers Home Administration, from State Farm Insurance. Appellant designated himself as the sole insured while Farmers Home Administration was designated as mortgagee.
The dwelling house was destroyed by fire in November, 1975, and pursuant to the request made by the attorney for appellee, State Farm made the draft, evidencing the insurance proceeds for the loss, payable to appellant, appellee, Farmers Home Administration and the attorney for appellant.
Appellant filed a petition for declaratory judgment in the Chancery Court of Craighead County seeking an order declaring him as the sole owner of the proceeds. However, before the trial of the matter, the parties agreed that the insurance draft would be endorsed by all concerned and the proceeds deposited in the registry of the trial court. The parties further agreed that the clerk of the court should be authorized, pursuant to court order, to pay from these proceeds the following sums: (1) The sum of $12,831.89 to Farmers Home Administration, thus paying the mortgage indebtedness in full; (2) to appellant’s attorney for services rendered in connection with the recovery of the insurance proceeds the sum of $3,000.00; and (3) the sum of $2,500.00 to appellee to satisfy a judgment obtained by appellee against appellant for arrearages due for nonpayment of child support payments.
Appellee filed pleadings in the action for declaratory judgment alleging, among other things, that she was entitled to one-half of the net proceeds remaining in the registry of the court.
FINDINGS OF THE TRIAL COURT
1. That on or before March 14, 1975, and after the appellee had abandoned the premises, the appellant entered upon and took possession of the premises, and he occupied same as a private residence; and that this occupancy continued until the dwelling burned on November 4, 1975.
2. That on March 14, 1975, appellant obtained fire insurance coverage on the dwelling house and that appellant was the only named insured on the policy; and that Farmers Home Administration was designated in said policy as mortgagee; and that appellant paid the premiums for such insurance coverage.
3. That appellant and appellee were tenants in common; and that at the time of the loss, appellant was in possession of the property as a tenant in common; and that the insurance policy which appellant acquired inured to the benefit of appellee; and that appellee is entitled to one-half of the net proceeds remaining on deposit in the registry of the court.
APPELLANT’S CONTENTION FOR REVERSAL
1. That the court erred in declaring that the insurance policy acquired by appellant for his own benefit inured to the benefit of appellee.
THE DECISION
In Clements v. Cates, 49 Ark. 242, we made the following observation:
“The law forbids a trustee, and all other persons occupying a fiduciary or quasi fiduciary position, from taking any personal advantage, touching the thing or subject as to which fiduciary position exists; or, as expressed by another, ‘whereever one person is placed in such relation by another, by the act or consent of that other, or the act of a third person, or of the law, that he becomes interested for him or interested with him in any subject of property or business, he is prohibited from acquiring rights in that subject antagonistic to the person with whose interest he has become associated.’ If such a person acquires an interest in property as to which such a relation exists he holds it as a trustee for the benefit of those in whose interest he was prohibited from purchasing, to the extent of prohibition. This rule applies to tenants in common by descent, with the same force and reason as it does to persons standing in a direct fiduciary relation to others. For they stand by operation of law in a confidental relation to each other, as to the joint property, and the duty is imposed on them to protect and secure their common interests. They have a community of interest which produces a community of duty, and imposes on each one the duty to exercise good faith to the others. Neither can take advantage of the other by purchasing an outstanding title or incumbrance and asserting it against them. Such an act would be inconsistent with good faith, and ‘against the reciprocal obligations to do nothing to the prejudice of each other’s equal claims which’ their relationship created.....”
In Hendrix v. Hendrix, 256 Ark. 289, 506 S.W. 2d 848, we made the following observation:
“We have long held that between tenants-in-common there is a fiduciary relationship, for they stand by operation of law in a confidential relation to each other, as to the joint property, and the duty is imposed on them to protect and secure their common interest.”
In reviewing the evidence in this record de novo, as we must, we are persuaded that the trial court’s holding is supported by a preponderance of the evidence and consequently, the trial court’s decision is affirmed.
It is clear from this record that both appellant and appellee were tenants in common in the property involved"as a consequence of the trial court’s action in converting the property owned by the parties from an estate by the entirety to a tenancy in common. See: Ark. Stat. Ann. § 34-1215 (Repl. 1962 and Supp. 1977). As such, a fiduciary relationship existed between them which imposed on each a duty to protect and secure their common interest. From February, 1974, to January, 1975, appellee maintained insurance coverage, at her own expense, for the benefit of herself and for appellant.
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George Howard, Jr., Justice.
We are to decide whether the holding of the trial court declaring that a fire insurance policy obtained by appellant, wherein appellee, his cotenant, was not designated as an insured, inured to the benefit of appellee is supported by the preponderance of the evidence.
THE FACTS
Appellant and appellee were divorced on February 27, 1974. The divorce decree provided that the ownership of the dwelling house and lot owned by the parties be converted from an estate by the entirety to a tenancy in common. Appellee was granted exclusive possession of the property until such time as the youngest child of the parties reached his majority or until the appellee remarried. Appellee remained in possession of the dwelling house from February, 1974, to January, 1975, when she remarried. During the period from February, 1974, to January, 1975, appellee paid all of the monthly installment notes due Farmers Home Administration under an indebtedness in the sum of $12,300.00 and secured by a note and. mortgage. The note and mortgage were jointly executed by appellant and appellee. Appellee also paid the insurance premiums during this period in the sum of $360.00 which was required under the terms of the mortgage.
Appellee discontinued the monthly mortgage payments and the insurance premiums in January, 1975, and consequently, the insurance coverage lapsed for nonpayment of premiums.
In March, 1975, appellant procured a policy of insurance in the sum of $26,000.00, at the request of Farmers Home Administration, from State Farm Insurance. Appellant designated himself as the sole insured while Farmers Home Administration was designated as mortgagee.
The dwelling house was destroyed by fire in November, 1975, and pursuant to the request made by the attorney for appellee, State Farm made the draft, evidencing the insurance proceeds for the loss, payable to appellant, appellee, Farmers Home Administration and the attorney for appellant.
Appellant filed a petition for declaratory judgment in the Chancery Court of Craighead County seeking an order declaring him as the sole owner of the proceeds. However, before the trial of the matter, the parties agreed that the insurance draft would be endorsed by all concerned and the proceeds deposited in the registry of the trial court. The parties further agreed that the clerk of the court should be authorized, pursuant to court order, to pay from these proceeds the following sums: (1) The sum of $12,831.89 to Farmers Home Administration, thus paying the mortgage indebtedness in full; (2) to appellant’s attorney for services rendered in connection with the recovery of the insurance proceeds the sum of $3,000.00; and (3) the sum of $2,500.00 to appellee to satisfy a judgment obtained by appellee against appellant for arrearages due for nonpayment of child support payments.
Appellee filed pleadings in the action for declaratory judgment alleging, among other things, that she was entitled to one-half of the net proceeds remaining in the registry of the court.
FINDINGS OF THE TRIAL COURT
1. That on or before March 14, 1975, and after the appellee had abandoned the premises, the appellant entered upon and took possession of the premises, and he occupied same as a private residence; and that this occupancy continued until the dwelling burned on November 4, 1975.
2. That on March 14, 1975, appellant obtained fire insurance coverage on the dwelling house and that appellant was the only named insured on the policy; and that Farmers Home Administration was designated in said policy as mortgagee; and that appellant paid the premiums for such insurance coverage.
3. That appellant and appellee were tenants in common; and that at the time of the loss, appellant was in possession of the property as a tenant in common; and that the insurance policy which appellant acquired inured to the benefit of appellee; and that appellee is entitled to one-half of the net proceeds remaining on deposit in the registry of the court.
APPELLANT’S CONTENTION FOR REVERSAL
1. That the court erred in declaring that the insurance policy acquired by appellant for his own benefit inured to the benefit of appellee.
THE DECISION
In Clements v. Cates, 49 Ark. 242, we made the following observation:
“The law forbids a trustee, and all other persons occupying a fiduciary or quasi fiduciary position, from taking any personal advantage, touching the thing or subject as to which fiduciary position exists; or, as expressed by another, ‘whereever one person is placed in such relation by another, by the act or consent of that other, or the act of a third person, or of the law, that he becomes interested for him or interested with him in any subject of property or business, he is prohibited from acquiring rights in that subject antagonistic to the person with whose interest he has become associated.’ If such a person acquires an interest in property as to which such a relation exists he holds it as a trustee for the benefit of those in whose interest he was prohibited from purchasing, to the extent of prohibition. This rule applies to tenants in common by descent, with the same force and reason as it does to persons standing in a direct fiduciary relation to others. For they stand by operation of law in a confidental relation to each other, as to the joint property, and the duty is imposed on them to protect and secure their common interests. They have a community of interest which produces a community of duty, and imposes on each one the duty to exercise good faith to the others. Neither can take advantage of the other by purchasing an outstanding title or incumbrance and asserting it against them. Such an act would be inconsistent with good faith, and ‘against the reciprocal obligations to do nothing to the prejudice of each other’s equal claims which’ their relationship created.....”
In Hendrix v. Hendrix, 256 Ark. 289, 506 S.W. 2d 848, we made the following observation:
“We have long held that between tenants-in-common there is a fiduciary relationship, for they stand by operation of law in a confidential relation to each other, as to the joint property, and the duty is imposed on them to protect and secure their common interest.”
In reviewing the evidence in this record de novo, as we must, we are persuaded that the trial court’s holding is supported by a preponderance of the evidence and consequently, the trial court’s decision is affirmed.
It is clear from this record that both appellant and appellee were tenants in common in the property involved"as a consequence of the trial court’s action in converting the property owned by the parties from an estate by the entirety to a tenancy in common. See: Ark. Stat. Ann. § 34-1215 (Repl. 1962 and Supp. 1977). As such, a fiduciary relationship existed between them which imposed on each a duty to protect and secure their common interest. From February, 1974, to January, 1975, appellee maintained insurance coverage, at her own expense, for the benefit of herself and for appellant. After appellee remarried and decided to move elsewhere, she immediately advised the appellant of her plans to the end that appellant could assume possession of the premises. Moreover, the trial court found that the appellant took possession of the premises and occupied same as his private dwelling. Appellant did not see fit to obtain insurance coverage until he was requested to do so by Farmers Home Administration. However, appellant’s effort to obtain insurance coverage to the exclusion of his cotenant is to no avail.
It is interesting to note that the record reflects that although appellee paid the monthly installments to Farmers Home Administration between February, 1974, and January, 1975, appellant readily admitted on cross-examination that he claimed as a deductible item on his federal income tax return the interest paid by appellee, during this period, to Farmers Home Administration on their joint indebtedness. Moreover, it is further interesting to note that the trial court in the divorce proceedings between appellant and appellee expressly enjoined the appellant from burning the dwelling house down when the court awarded appellee possession of the property.
Appellant has cited the following cases in support of his position that the trial court erred in holding that the insurance proceeds inured to the benefit of appellee: Langford v. Searcy College, 73 Ark. 211, 83 S.W. 944; Barner v. Barner, 241 Ark. 370, 407 S.W. 2d 747. These cases hold essentially that a contract of insurance is a personal contract which inures to the benefit of the party with whom it is made and by whom the premiums are paid. But these cases are to be distinguished from the instant case and, consequently, are not controlling.
In Langford v. Searcy College, supra, the Board of Directors of Searcy College leased certain property containing certain structures to one R. B. Willis and others for a term of two years to be used for school purposes. It was understood that if the school proved a success, the lessees would propose to purchase the property. At the time of the execution of the lease, there was an outstanding indebtedness against the property which was secured by a mortgage. During the term of the lease, the indebtedness matured and foreclosure proceedings were instituted on the mortgage against the Board of Directors of Searcy College. Pursuant to a foreclosure decree, a sale was conducted and A. W. Yarnell and others became the purchasers. Following the sale, Mary E. Speers and William H. Langford, who were associated with R. B. Willis, lessee, of the Board of Directors of Searcy College, received a warranty deed from A. W. Yarnell and his associates whereby the property was conveyed in fee to Mary E. Speers and William H. Langford. The grantees acquired insurance coverage on the structures located on the premises and as a consequence of a fire, insurance proceeds in the sum of $20,000 were paid to Mary E. Speers and William H. Langford. The Directors of Searcy College claimed that they were entitled to the insurance proceeds. In reversing the trial court’s holding that the Directors of Searcy College were entitled to the proceeds, we held that inasmuch as the equity of redemption of Searcy College had been foreclosed and the legal title thereto passed to Yarnell and his associates, who sold it to Mary E. Speers and William H. Langford under a conveyance that was absolute and unconditional, and there was no contract by which it was agreed that the property would be held in trust by Mary E. Speers and William H. Langford for any purpose, Mary E. Speers and William H. Langford were lawfully seized in fee of the property. Consequently, the contract of insurance was a personal contract with Speers and Langford and the property was insured for their benefit. In other words, we held in Langford v. Searcy College, supra, that inasmuch as there was no fiduciary relationship existing, the insurance coverage did not inure to the benefit of the Board of Directors of Searcy College.
In Barner v. Barner, supra, we held that where a legal life tenant insures the property in his own name and for his own benefit and pays the premium from his own funds, the insurance policy does not inure to the benefit of the remainder-man in the absence of a fiduciary relationship between them or an agreement between the life tenant and the remainder-man as to which of them shall procure and maintain insurance coverage.
Affirmed.
Georoe Rose Smith and Byrd, JJ., dissent. Fogleman, J., concurs with written opinion.