Crook v. Hartford Fire Ins. Co.

• Decision Date: 09 January 1935
• Docket Number: 13968.
• Citation: 178 S.E. 254,175 S.C. 42
• Parties: CROOK v. HARTFORD FIRE INS. CO. et al.
• Court: South Carolina Supreme Court

178 S.E. 254

175 S.C. 42

CROOK v. HARTFORD FIRE INS. CO. et al.

No. 13968.

Supreme Court of South Carolina

January 9, 1935

Appeal from Common Pleas Circuit Court of Calhoun County; G. Dewey Oxner, Judge.

Action by D. J. Crook, as guardian ad litem for Frances Louise Crook, against the Hartford Fire Insurance Company and others. From a decree, plaintiff appeals.

Affirmed.

The order of Judge Oxner follows:

The above action was commenced in February, 1933, for the purpose of recovering on a fire insurance policy issued by the defendant Hartford Fire Insurance Company on November 28, 1931, in the sum of $1,500 covering a dwelling near Cameron, Calhoun county. The dwelling insured was totally destroyed by fire on February 13, 1932. Said policy was issued in the name of M. E. Crook with loss payable clause to L. M. Rast as his interest may appear. In her complaint plaintiff alleges that she is the owner of said property and is entitled to receive the proceeds of the insurance.

In his answer the defendant Rast denies that plaintiff is entitled to the proceeds of said policy, and further alleges that from the time said policy was issued until the fire, that he had an interest in the property to an extent exceeding the amount of the insurance as vendor of a life interest; that on March 3, 1931, he sold to his codefendant Crook said premises for the sum of $2,000 payable in certain installments; that it was agreed that Crook should procure and keep in force insurance on the buildings, and that in accordance with said agreement that the policy was transferred to him; that said indebtedness remains due and unpaid; that the premiums on said policy were paid by Crook, and he asks judgment for the amount of said policy.

The defendant Crook answered the complaint, alleging that he owned a life interest in the premises; that the policy was procured and premiums paid by him; that the defendant Rast has no interest in said property; that the real estate upon which said building was located was sold for taxes and bid in by plaintiff; and that the proceeds of the insurance should be used in replacing the building destroyed.

Under a consent order, the defendant insurance company paid the net proceeds amounting to $1,428.20 to the clerk of court and was dismissed as a party to the action, the fund being held subject to the further order of the court.

The case was referred to J. A. Merritt, Esquire, as special referee, who took the testimony and filed a report on June 29, 1933. The defendant M. E. Crook filed no exceptions to the report of the special referee. The plaintiff filed numerous exceptions to the report of the special referee. At the hearing before me, the parties agreed that all issues raised by the exceptions would be reserved except the issues as to whether the defendant Rast had an interest in the proceeds of said insurance and, if so, to what extent. The following stipulation was filed by counsel for plaintiff at the hearing:

Counsel for plaintiff admit the facts as found by the special referee, but they do not admit his conclusions of law found in paragraphs 6 and 7; they disagree with his conclusions and recommendations as to the disposition of the insurance funds and the case now comes to this court upon the single exception following:

The special referee erred in finding and concluding that the defendant Rast was entitled to share in the proceeds of the insurance money held by the clerk of court in this case, the error being:

(a) That neither he nor his codefendant M. E. Crook had any interest in, or claim upon, the said fund when this action was commenced, said fund at that time being the property of the infant plaintiff.

(b) That if either the said L. M. Rast or M. E. Crook had any interest in said fund at that time, such interest was considerably less than that found by the said special referee.

In consideration of this appeal, reference may be had to the minutes of the special referee by the court and all counsel engaged in the case.

Among the facts disclosed by the record and found by the referee, for a proper understanding of the issue which I am now to pass upon, the following may be restated:

The property involved in this action was originally owned by Mrs. Z. L. Crook, deceased. Upon the death of Mrs. Z. L. Crook in 1916, the defendant M. E. Crook, her son, became the owner of a life interest in the property; and the plaintiff, Frances Louise Crook, daughter of M. E. Crook and granddaughter of Mrs. Z. L. Crook, became the owner of the remainder.

"That the said life tenant, M. E. Crook lost by foreclosure to the South Carolina Savings Bank his life interest in said premises. At the request and solicitation of M. E. Crook, L. M. Rast purchased the said premises along with certain other property from the South Carolina Savings Bank and at the same time Rast entered into an agreement to sell the said life interest back to M. E. Crook for $2,000.00, with interest, and payable in certain installments. The said M. E. Crook was to keep the property insured for the protection of L. M. Rast and to pay all taxes due on the property. The fire insurance policy was taken out by Crook, the premiums paid thereon by him and the loss clause therein payable to L. M. Rast as his interest may appear. This agreement was entered into on the 22nd day of June, 1927. The said M. E. Crook made numerous payments thereon but failed to meet the terms of his agreement and so on the 3rd day of March, 1931, they entered into a new agreement whereby Crook was to pay the sum of $2,000.00 for the said life interest in certain installments, all unpaid balances to bear interest at 8 per cent. per annum. The said M. E. Crook has made no payments on this agreement and also failed to pay the taxes assessed against said property for the year 1931 and as a consequence the said premises were sold by the Tax Collector for Calhoun County on the 3rd day of February, 1932, and at such delinquent tax sale the premises were bid in by the Calhoun County Sinking Fund Commission for the amount of the taxes and cost."

The dwelling was totally destroyed by fire on February 13, 1932, or about ten days after the tax sale. Neither M. E. Crook nor L. M. Rast redeemed said property before the expiration of one year allowed by law to redeem. On or about February 2, 1933, the plaintiff, as trustee for Frances Louise Crook, purchased from the sinking fund commission its bid, and on February 2, 1933, received deed to the property consisting of 134 acres, upon which the dwelling was situated. The consideration stipulated in the deed is $89.43-apparently representing the amount of taxes and cost. At the time plaintiff purchased the bid of the sinking fund commission, he knew the dwelling had burned, but states that at that time he considered the life interest, exclusive of the building burned, as worth the amount of the bid.

In addition to passing upon certain issues that are reserved and are not before me, the referee, on the issue now before me, found in effect that Rast was entitled to the income on the proceeds of insurance during the life of M. E. Crook, with the remainder to plaintiff.

Stated in concise form, the status of the property at the time of the fire was as follows:

M. E. Crook was in possession of the property, as vendee, under an agreement to purchase his life interest from L. M. Rast.

L. M. Rast owned the life interest of M. E. Crook, as vendor, under an agreement to sell to M. E. Crook, upon which agreement the amount unpaid exceeded the amount of insurance on the dwelling.

The sinking fund commission of Calhoun county held a bid made at a tax sale about ten days prior to the fire, which bid was about one year later assigned to the plaintiff, as trustee.

Both M. E. Crook and L. M. Rast had the right to redeem within one year from the date of the tax sale.

Frances Louise Crook owned the remainder.

It is clear that only the life interest of M. E. Crook was sold for taxes, and said tax sale in no way affected or prejudiced the interest in remainder of the plaintiff, Frances Louise Crook. Taylor v. Strauss , 95 S.C. 295, 78 S.E. 883; Campbell v. Williams et al., 171 S.C. 279, 172 S.E. 142, 145.

In Campbell v. Williams, supra, the court said: "Under the statutes of this state it is well settled that the duty is on the life tenant to pay the taxes and that the interests of remaindermen are not affected by reason of the failure of the life tenant so to do. It is also well settled that no taxes may be assessed against the interests of remaindermen during the existence of the life estate, the reason being that the Legislature supposed the value of the life estate would be sufficient to satisfy the taxes and it was the intention under our statute to protect the rights of remaindermen and not allow them to be sacrificed where no necessity therefor exists."

The plaintiff, therefore, in purchasing the bid of the Calhoun county sinking fund commission, occupies no stronger position than if she were an outside purchaser. She certainly acquired no better position than that of the sinking fund commission.

It would also seem to be clear that at the time of the fire, M. E. Crook, L. M. Rast, the sinking fund commission, and the plaintiff each had an insurable interest in the dwelling destroyed.

"It may be said, generally, that any one has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction." 14 R. C. L. 910.

"An insurable interest in property is any right, benefit or advantage arising out of or dependent thereon, or any liability in respect thereof, or any relation to or concern therein of such a nature that it might be so affected by the contemplated peril...