Republic Insurance Co. v. Silverton Elevators, Inc.

Republic Insurance Company (plaintiff) issued a Texas Standard Fire Policy to named insured Silverton Elevators, Inc. (defendant), covering a dwelling and its household goods. The dwelling was occupied by Carl L. Tidwell (defendant), a Silverton officer, director, and general manager. The policy covered windstorm damages up to $7,000 for the dwelling and $3,000 for household goods. When Republic’s agent sold the policy to Silverton, the agent knew that Tidwell would be occupying the dwelling with his family and that the household goods belonged to Tidwell. The agent assured Tidwell that the policy covered his household goods. During the policy’s coverage period, the dwelling and the household goods were destroyed by a tornado. Republic paid Silverton $7,000 for damage to the dwelling but denied liability for the household goods. Silverton and Tidwell sued Republic in state court to recover the $3,000 for Tidwell’s household goods. Republic denied coverage of the goods, arguing that Silverton had no insurable interest in Tidwell’s household goods because Silverton did not own the goods. Silverton maintained that Republic issued the policy with full knowledge of the true ownership of the household goods, and thus that it had waived its ownership argument and was estopped from denying coverage of the goods. Following a non-jury trial, the trial court found in favor of Silverton. Republic appealed. The trial court’s judgment was affirmed, and Republic appealed to the Texas Supreme Court.