Blackwell v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 28 February 1961
• Docket Number: No. 17750,17750
• Citation: 118 S.E.2d 701,237 S.C. 649
• Court: South Carolina Supreme Court
• Parties: Nora Jackson BLACKWELL, as Administratrix of the Estate of Edmund B. Blackwell, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

Page 701

118 S.E.2d 701

237 S.C. 649

Nora Jackson BLACKWELL, as Administratrix of the Estate of Edmund B. Blackwell, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

No. 17750.

Supreme Court of South Carolina.

Feb. 28, 1961.

Nelson, Mullins & Grier, Columbia, for appellant.

John Sloan, Columbia, for respondent.

OXNER, Justice.

This is a suit on an insurance policy which, among other coverages, contained a provision insuring E. B. Blackwell against loss or damage to his automobile caused by collision or upset. The question for determination is whether the insurer has discharged its liability by paying the amount of the loss to the First National Bank of South Carolina, which held a chattel mortgage on the automobile.

The insured, E. B. Blackwell, purchased a Plymouth automobile from Pulliam Motor Company of Columbia. He borrowed from the First National Bank $748.90 for the purpose of paying the unpaid portion of the purchase price amounting to $700, together with an insurance premium of $48.90. This loan was evidenced by a note to the bank for $833.34, dated January 7, 1958, payable in monthly installments of $46.43 each, beginning February 22nd, which was secured by a chattel mortgage on the automobile. (Interest to maturity was included in the amount of the note). This mortgage contained the following provision:

'The mortgagor agrees to pay all taxes and all assessments of any kind whatsoever on the property, and to keep the same insured against fire and theft for not less than the amount of the unpaid balance due on said note, also to carry comprehensive insurance including collision hazard insurance, satisfactory to the Mortgagee, and to keep the property so insured during the life of the mortgage, the policies of insurance to contain a clause that in the event of loss, payments shall be made to the Mortgagee as its interest may appear. Upon the failure of the Mortgagor in any of these respects, the Mortgagee may at its option, either declare this mortgage in default and the outstanding balance due and payable, or may pay said taxes, or so insure, and the costs thereof shall become a part of the debt secured by this mortgage. The proceeds of any insurance, whether paid by reason of loss, injury, return premium or otherwise, shall be applied toward the repair or replacement of the property or payment of the obligation secured by this mortgage, at the option of the Mortgagee.'

When the loan was made, the Bank immediately applied to the State Farm Mutual Automobile Insurance Company for comprehensive and collision coverages on the automobile and paid the premium of $48.90. The Company issued to the bank a 'binder receipt', acknowledging payment of the premium and agreeing to issue the policy requested 'with loss payable to the First National Bank of South Carolina.' Several weeks later the policy was issued and delivered to the Bank with a copy to the insured. It provided: 'If a mortgage owner, conditional vendor, or assignee is named in the exceptions, loss, if any under coverages (D), (F), and (G) shall be payable to the named insured and to such additional interest as such interest may appear, * * *.' (G) was the collision coverage. Attached to the printed policy was a rider giving the policy number, policy period, amount of premium, etc. and naming and insured as E. B. Blackwell. Under the heading 'Exceptions and Endorsements', there appeared the following. 'Finance--First National Bank of South Carolina, Columbia, South Carolina.'

On January 25, 1958, before any monthly installment became due, Blackwell's automobile was involved in a collision with another automobile, resulting in some damage to his car. Before it was moved a third automobile collided with it, causing additional damage. Blackwell and the Company agreed that the damage to his car was $425 but disagreed as to the extent of liability under the policy. The Company took the position that there were two separate collisions and since the policy had a $100 deductible clause, there should be deducted from the loss $200. Blackwell contended, upon the advice of counsel, that there should be only one deduction of $100, making the Company's liability $325. Blackwell died on February 26, 1958 before the dispute was settled. The only asset left by him was the insured automobile. After waiting some time for the administratrix of Blackwell's estate and the Insurance Company to settle, the Bank finally demanded payment of the loss and on January 28, 1959 the Insurance Company paid it the sum of $225.

This action was instituted by the administratrix...