## Facts

- Silverton Elevators, Inc. furnished a dwelling to its general manager, Carl L. Tidwell, and provided insurance on the house and Tidwell’s household goods as part of Tidwell’s compensation.
- Republic Insurance Company’s authorized local agent issued and renewed policies in Silverton’s name covering the dwelling and household goods; the agent had authority to issue policies and receive premiums.
- It was undisputed the agent knew the household goods belonged to Tidwell and that Silverton carried the insurance for Tidwell’s benefit.
- A Texas Standard Fire Policy with Extended Coverage insured the dwelling ($7,000) and household goods in the dwelling ($3,000), for a three-year term; Silverton paid the premium.
- A tornado destroyed the dwelling and Tidwell’s household goods.
- Republic paid the dwelling limit but denied the household-goods claim, asserting Silverton (the named insured) lacked an insurable interest because it did not own the goods.
- The agent testified he wrote the policy to cover Tidwell’s goods and told Tidwell, before and after the loss, that the policy covered Tidwell’s household goods.

## Issues

1. Whether an insurer may deny coverage for personal property because the named insured did not own it, when the insurer’s authorized agent knew at issuance that a third party owned the property and that the insurance was procured for that third party’s benefit.
2. Whether the insurer’s issuance of the policy with such knowledge waives any ownership-by-named-insured requirement and estops the insurer from denying coverage without requiring reformation of the policy.

## Decision

- The Supreme Court of Texas affirmed the judgment for Silverton “for the use and benefit of” Tidwell for the $3,000 household-goods loss.
- The court held Republic could not avoid liability based on Silverton’s non-ownership where Republic, through its authorized agent, issued the policy with actual knowledge that Tidwell owned the goods and was the intended beneficiary.
- The court held the agent’s knowledge was imputable to Republic, and Republic’s conduct constituted waiver and estoppel barring the ownership-based defense.
- The court held recovery could be had on the policy as issued; reformation was not required.

## Legal Principles

- An insurer is charged with the knowledge of its authorized agent acquired within the scope of the agent’s authority to issue policies and accept premiums.
- When an insurer issues a property policy with actual knowledge that the insured property is owned by someone other than the named insured and that the coverage is intended for that person’s benefit, the insurer waives inconsistent ownership requirements and is estopped from denying coverage on that ground after a loss.
- Waiver and estoppel can permit enforcement of coverage consistent with the parties’ known arrangement without a separate action to reform the policy.
- An insurer that accepts premiums for a risk with knowledge of the true ownership cannot rely on a technical ownership defect in the policy’s naming to defeat the coverage it knowingly undertook.

## Conclusion

The court enforced household-goods coverage for an employee-beneficiary where the insurer’s authorized agent knew the employee owned the goods and issued the policy in the employer’s name anyway, holding the insurer waived any ownership-by-named-insured requirement and was estopped to deny coverage without reformation.


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