Pennsylvania Fire Ins. Co v. Stockstill , 197 S.W. 1036 ( 1917 )

Findings of Fact There is no contradiction in the testimony in this case. The evidence shows that appellee was the owner of a house and lot in Brownwood. Mrs. Emma Mayes, a feme sole, and Mrs. Flora Bowles, wife of Ernest Bowles, owned a farm in Brown county. J. L. Ellis, a land agent, acting for both parties, negotiated an agreement for the exchange of their holdings. Appellee's attorneys, upon examining the abstract to the farm, objected to the title, in that it did not appear that a certain vendor's lien note against the same had been paid, or that the lien had been released, and also that the deed to Mrs. Mayes omitted one of the calls in the field notes. At the request of Ellis, and upon his assurance that the deed would not leave his hands until those defects were remedied, appellee, on October 15, 1915, executed a deed to Mrs. Mayes and Mrs. Bowles to the town lot, and deposited the same with Ellis, to be held in escrow until said defects were cured.

Appellee owed about $200, secured by a mortgage on his lot. Mrs. Mayes and Mrs. Bowles, joined by her husband, on the date above stated executed a deed to the farm, and deposited the same with Ellis, to be held in escrow, and not to be delivered until the mortgage on the lot was released.

In anticipation that these defects would be cured, appellee put a party in possession of the farm, telling him that he had conditionally traded for it, and agreeing with him as to the rental for the ensuing year, in the event the trade was consummated, informing him that, if the trade was not consummated, he would have to look to Mrs. Mayes for a rental contract. This contract was upon the usual terms — a third of the grain and a fourth of the cotton. The tenant went into possession December 28, 1915.

Ellis collected the rent on appellee's house for one month, and paid the same to Mrs. Mayes. It was in contemplation of all parties that this rent should be paid over to appellee if the deal was not consummated.

None of the conditions upon which Ellis was to deliver the deeds to the respective parties were complied with, and he never delivered either of said deeds.

The house on appellee's lot was insured by appellant for $1,000, and the same was totally destroyed by fire on January 2, 1916. The policy contained, among others, the following stipulations:

"The entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void * * * if the interest of the insured be other than unconditional and sole ownership; * * * or if the subject of insurance be a building on ground not owned by the insured in fee simple; or if any change other than by the death of the insured take place in the interest, title, or possession of the subject of insurance (except change of occupancy without increasing hazard), whether by legal process or judgment or by voluntary act of the insured or otherwise."

Upon the conclusion of the evidence the appellant requested the court to instruct the jury to return a verdict for defendant, and excepted to the refusal of the court to give said charge. The court peremptorily instructed a verdict for plaintiff, to which appellant duly excepted.

Opinion. The defense in this case was that there had been a change in ownership and in possession previous to the fire. A deed deposited in escrow does not become operative, and passes no title, until the condition has been performed, or the event has happened upon which it is to be delivered to the grantee. R. 0. L. 627; 16 Cyc. 567-578; 11 Am. Eng. Enc. of Law, 348; Insurance Co. v. Nowlin, 56 S.W. 198; Calhoun County v. Emigrant Co., 93 U.S. 124, 23 L. Ed. 828. We quote from the authorities above cited as follows:

"The rule is established by repeated decisions that, when a deed is delivered in escrow, nothing passes by the deed, unless the condition is performed." Calhoun County Emigrant Co., supra.

"There is no change in the title or right of possession to the property, although the purchaser occupies it with the consent of the vendor in anticipation of completing the contract of sale and purchase. So when, in such case, the vendor has a fire insurance policy on a house situated on the premises, and the house is destroyed by fire while so occupied, and before the conditions of the escrow are performed, the hazard from the fire not being increased, the right to recover on the contract of insurance is not forfeited." R.C.L. 628.

There was no evidence of any change of possession which increased the hazard. The house was occupied by a tenant when the deed was delivered in escrow, and it was so occupied when the fire occurred. This case is to be distinguished from cases where the grantee obtained an equitable title, or was in position when the loss occurred to have enforced specific performance of a contract to convey.

No error appearing of record, the judgment of the trial court is affirmed.

Affirmed.

On Motion for Rehearing. Appellant insists that this case should be reversed on account of the change of possession. The change of possession was immaterial, except so far as it threw light upon the issue as to change of title. Appellant cites Fire Association v. Flournoy, 84 Tex. 632, 19 S.W. 793,31 Am. St. Rep. 89. There was no escrow in that case. The issue was as to whether there was a lease or sale of the property. We quote as follows:

"The court instructed the jury, that the contract between Brady Bros. and Tickle Black created a change in the title to the property. We think this a proper construction of the contract." 84 Tex. 635,19 S.W. 794, 31 Am. St. Rep. 89.

In Insurance Co. v. Clarke, 79 Tex. 25, 15 S.W. 166, 11 L.R.A. 293, cited by appellant, the court said that, if the mortgage was deposited in escrow until the wife's signature could be obtained, it did not take effect as a mortgage.

Motion overruled.