Stovall v. Empire State Ins. Co.

39 So. 2d 837, 215 La. 100, 1949 La. LEXIS 929
CourtSupreme Court of Louisiana
DecidedMarch 21, 1949
DocketNo. 38624.
StatusPublished
Cited by4 cases

This text of 39 So. 2d 837 (Stovall v. Empire State Ins. Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stovall v. Empire State Ins. Co., 39 So. 2d 837, 215 La. 100, 1949 La. LEXIS 929 (La. 1949).

Opinion

HAMITER, Justice.

For a cause of action herein plaintiff, Clifton S. Stovall, alleged that his one-story building, known as the North Hangar and situated at the Stoval Airport near Shreveport, was insured by the defendant, Empire State Insurance Company, and two other insurance companies for the total amount of $5000, each of whom became liable for one-third thereof in case of loss or destruction by fire; that he erected it during the year 1943 at a total cost of $6000; that the building was completely destroyed by fire of unknown origin on March 4, 1946; and that defendant has refused to pay its proportionate part of the insurance notwithstanding proof of loss having been submitted and a period of more than 60-days thereafter having elapsed.

Plaintiff prayed for judgment against this defendant in the sum of $1666.66, with legal interest thereon from judicial demand, plus a 12% penalty and attorney’s fees of $750.

In its answer defendant admitted the issuance of the policy alleged on, it being for a term of one year from April 5, 1945. Then it pleaded affirmatively that (1) plaintiff was without an insurable interest in the property insured and (2) the “policy was null and void from its inception due to the designed and intentional withholding of facts material to the risk which Clifton S, Stovall, in honesty and good faith, ought to have communicated to your respondent and that had respondent known of said facts the said policy would not have been issued.”

After trial there was judgment in favor of plaintiff for the sum demanded, together with legal interest thereon from -judicial demand, plus a- penalty of 12% and attorney’s fees of $300.

Defendant obtained and perfected a sus-pensive appeal, and in this court plaintiff answered it praying that the award of attorney’s fees be increased.

*103 For a proper consideration of the several' defenses pleaded and urged herein it is necessary to have in mind certain circumstances relating to plaintiff’s claim to ownership of the North Hangar, insured under •defendant’s policy for one year from April 5, 1945, and which was destroyed by fire on March 4, 1946. As disclosed by the record, George W. McMurray and the Howell Land & Improvement Company, as owners, leased in writing unto one Kirby S. Shaw on November 4, 1941, the land on which the building was later constructed. The lease was for a term of five years, and the instrument evidencing it recited, among other things, that the property was to be ■used exclusively for the construction and operation of an airfield or aviation school. Subsequently, there was written on the back of the instrument, in long hand, the following notation:

“The lease on this document is herewith transferred to Stovall Field, Inc., releasing assignor of all liability. Shreveport, La. Apr. 18, 1942.
■“Accepted: Stovall Field, Inc.
“By Clifton S. Stovall, Pres.
“Kirby S. Shaw.”

On that same date (April 18, 1942), articles of incorporation for Stovall Field,' Inc., were signed, and two days later they-were , filed for record with the Clerk of Court of Caddo Parish. The incorporators, with the shares of stock subscribed by: each, were Clifton S. Stovall, 49 shares,' Norman K. Michel, 50 shares, and Mrs. Lillian Stovall, 1 share.

During the latter part of 1942 and the early part of 1943 the North Hangar, insured under the policy in question, was erected.

Ralph Brandon, in May, 1943, acquired by purchase the land affected by the lease and on which the North Hangar was built, and he still owned it at the time of the institution of the instant suit.

On March 20, 1945, under an agreement in compromise of a claim against him, Clifton S. Stovall granted unto one M. C. Thompson a lease on the North Hangar, it to endure until November 4, 1946, the date stipulated for the expiration of the mentioned land lease.

Under the plea that Stovall was without any insurable interest in the destroyed building, defendant first takes the position that Stovall Field, Inc. (not Stovall individually) owned the lease, together with all improvements on the leased land, and in support thereof it directs attention to the chartering-of that corporation- and to Shaw’s assignment of the lease.-to it.The record conclusively shows, .however, that Stovall Field, Inc., although duly, chartered, did not function at all, carried-on nó business whatsoever, and its shares'of stock were neyer issued to the subscribers.. Furthermore, it appears that Stovall personally built the hangar at a cost'to him in-excess of -$5000, .that -he -did not transfer it to the corporation, and-that, he at all ■-times--was *105 treated as the owner of the lease by those who dealt with him, including Brandon (the landowner) and the agent who solicited the insurance and wrote it in Stovall’s individual name.

Next, in further support of the plea of lack of insurable interest, defendant shows that on the occurrence of the fire Stovall was in arrears with his landlord respecting payment of rent and certain taxes, and it urges that by reason of the nonpayment of that indebtedness when dr; the building became the property of the lessor under the following provision of the lease:

“It Is Understood that said property is to be used exclusively for the construction and operation of an airport or aviation school and it is contemplated that lessee will build on said premises such improvements and structures as may be deemed advisable for said purpose, and said buildings and improvements shall be and remain the property of lessee so long as there is no default hereunder * *

We do not construe the provision relied on as effecting a transfer of ownership of the improvements immediately upon a failure to timely pay rent and .taxes. It does not specifically so declare, and when read with other provisions of the leasé clearly that effect was not so intended. 'Thus, the lease further recites; ’ '

“ * * * a'nd lessee shall have the right upon termination of this lease, for a period of ninety (90) days, to go on said property and remove"' said improvements,
provided all amounts due lessor hereunder have been fully paid, but if lessee fails or refuses to remove said improvements within said period, they shall become the property of lessor and lessee agrees upon removal of the improvements to level the property and place it in the same condition as when received.
* * * * * *
“That in case of default in any of the covenants herein, Lessor may enforce the performance of this lease in any modes provided by law, and this lease may be forfeited at Lessor’s discretion if such default continue for a period of ten days after Lessor notifies said Lessee of such default and his intention to declare the lease forfeited * *

Under these provisions Stovall would continue to be the owner of the improvements for a period of at least 90 days after the lease’s termination, whether the termination result from the expiration of its term or from a forfeiture based on a default and declared only after the stipulated notice to the lessee had been given.

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Bluebook (online)
39 So. 2d 837, 215 La. 100, 1949 La. LEXIS 929, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stovall-v-empire-state-ins-co-la-1949.