Republic Ins. Co. v. Silverton Elevators, Inc. - 493 S.W.2d 748 (Tex. 1973)

Rule:

An insurer may be estopped from denying liability to the true owner on policies issued in the names of third parties covering the risks on identified property with full knowledge by the company that the property is actually owned by the one for whose benefit the policy was written or maintained.

Facts:

Plaintiff employer furnished plaintiff employee with a house as well as insurance covering employee's personal property as part of his compensation. The insurance issued by defendant was in the name of plaintiff employer. The home and all of plaintiff employee's belonging were destroyed by a tornado. Plaintiffs sued defendant to recover under the policy issued to plaintiff employer. Defendant argued that plaintiffs were not entitled to recover under the policy because the property destroyed was not owned by the named insured. Plaintiffs contended that defendant had waived the requirement that the named insured own the property because defendant's agent when issuing the policy knew that plaintiff employee was the owner of the property covered by the policy. At trial, plaintiffs were awarded damages under the policy and the appeals court affirmed. Defendant appealed. 

Issue:

Under the circumstances, could the plaintiff recover under the insurance policy, notwithstanding the fact that it was not the named insured? 

Answer:

Yes.

Conclusion:

The state supreme court affirmed both lower courts, holding that knowledge of ownership of the goods by defendant's agent was binding upon defendant, and the issuance of the policy operated as a waiver of the requirement that the named insured own the property. According to the court, an insurer may be estopped from denying liability to the true owner on policies issued in the names of third parties covering the risks on identified property with full knowledge by the company that the property was actually owned by the one for whose benefit the policy was written or maintained.