American Indemnity Co. v. Southern Missionary College

Tomlinson, Justice

(dissenting).

The able and scholarly majority opinion has, on the particular facts of this case, an equitable appeal that tends to commend its acceptance. I cannot, however, escape the feeling that it is not an equity permitted by the law applicable to the case.

*526The brief submitted in behalf of appellee, Southern Missionary College, asserts that “the question of an insurable interest in the property (the $4,000.00 stolen) is not the determinative question in this ease * * *. The question for determination is whether complainant suffered a direct loss. It was complainant’s property that was stolen”. The majority opinion, as I understand it, bases its conclusion upon the proposition that a stockholder has an insurable interest in the property of his corporation.

I cannot agree with the appellee’s assertion that “it was complainant’s property that was stolen ’ ’. Complainant was only a stockholder in the corporation that had the legal title to this $4,000. In Parker v. Bethel Hotel Co., 96 Tenn. 252, 280, 34 S. W. 209, 216, 31 L. R. A. 706, it was held that the single stockholder to all stock of that corporation “had no title, legal or equitable, to its property”. In Hinton v. Carney, a case decided by this Court in June of 1952, and reported in 250 S. W. (2d) 364, 366, the interest which a stockholder owns in the property of a corporation is thus defined:

“ ‘The ownership of a share of stock, so far as the property of the corporation is concerned, is but the ownership of the right to participate from time to time in the net profits of the business, and upon the dissolution of the corporation to a proportion of the assets after the payment of the corporate debts’ ”.

In Hinton v. Carney, supra, all the stock was owned by one person, as in the case at bar.

It follows from that held in Parker v. Bethel Hotel Co., supra, and Hinton v. Carney, supra, as I see it, that appel-lee is mistaken in its assertion that it was appellee’s property that was stolen. Appellee had no title, legal or equitable, in that $4,000. Its only interest was the right *527to participate in not profits, if any, and to the assets upon dissolution of the corporation, if any assets remained after payment of debts of the corporation.

On the theory of having an insurable interest the majority opinion allows the stockholder, 'Southern Missionary College, to recover not on its interest thus defined by our cases, supra, but allows a recovery of the res itself. That is not the obligation undertaken by the insurance company.

The obligation of the insurance company to the Southern Missionary College is controlled by the terms of the insurance contract, of course. That obligation, in so far as applicable to this case, is as follows:

“To indemnify the insured (a) for all direct loss of money and securities occurring within the premises and caused by the actual destruction, disappearance or wrongful abstraction thereof”.

In my view of the matter the theft of this $4,000' was not a direct loss to Southern Missionary College. The diréet loss was to Collegedale Mercantile Enterprises, Inc., it being the owner of the $4,000. The only loss occurring to Southern Missionary College by reason of this theft was the net profit, if any, which might have been made by reason of this $4,000 had it not been stolen, or the amount, if any, which Southern Missionary • College as such stockholder might have received from this $4,000 after payment of the debts of the corporation when, and if, that corporation is dissolved. In my opinion this is not a direct loss to Southern Missionary College; hence, not within the terms of the insurance contract under which the recovery is allowed.