First Carolinas Joint Stock Land Bank v. Stuyvesant Ins. Co.

• Decision Date: 07 December 1932
• Docket Number: 13533.
• Citation: 166 S.E. 883,168 S.C. 37
• Parties: FIRST CAROLINAS JOINT STOCK LAND BANK v. STUYVESANT INS. CO.
• Court: South Carolina Supreme Court

166 S.E. 883

168 S.C. 37

FIRST CAROLINAS JOINT STOCK LAND BANK v. STUYVESANT INS. CO.

No. 13533.

Supreme Court of South Carolina

December 7, 1932

Appeal from Richland County Court; M. S. Whaley, Judge.

Suit by the First Carolinas Joint Stock Land Bank against the Stuyvesant Insurance Company. From a judgment in favor of plaintiff, defendant appeals.

Affirmed.

Herbert & Dial, of Columbia, for appellant.

Melton & Belser, of Columbia, for respondent.

BONHAM J.

This case was heard, by consent of counsel, by Judge Whaley of the county court of Richland county, without a jury. From the judgment entered on his decree in favor of the bank, the Stuyvesant Insurance Company appeals.

From the statement for the appeal, and the statement upon which the court below heard the case, we condense this shorter statement of facts:

Mrs Eugenia E. Harley borrowed of the First Carolinas Joint Stock Land Bank of Columbia, which we shall call the bank, the sum of $4,000 and secured the loan by a mortgage on a two-story frame dwelling house in the town of Barnwell, S. C., on the farm of Mrs. Harley, and on the farm which Mrs. Harley stated to contain 100 acres, or 120 acres. The agreed value of the dwelling was $3,000. Mrs. Harley agreed to insure the dwelling for $1,500 and make the loss payable to the bank, as its interest should appear. She failed to do so, whereupon the bank exercised its privilege and insured its interest in the dwelling as mortgagee in the sum of $1,500, in the Stuyvesant Insurance Company, for which insurance it paid a premium in the sum of $14.25.

The complaint alleged these facts, and the further facts of the loss by fire of the insured dwelling October 30, 1928; notice of loss and refusal to pay by the Stuyvesant Insurance Company.

The answer of the defendant admitted these allegations, and for further defenses alleged: That in the event of loss or damage defendant was liable for an amount not exceeding three-fourths of the cash value insured, not exceeding $1,500. That it was a condition of the policy that unless otherwise provided by agreement in writing added to the policy, the company should not be liable for loss or damage occurring while the insured shall have any other contract of insurance, whether valid or not, on property covered, in whole or in part, by this policy; and that plaintiff had and collected other insurance on the premises in violation of the policy; that on October 20, 1928, Rhode Island Insurance Company issued its policy of insurance to the owner of the house insured by defendant company, in the sum of $2,500 which policy was issued without the knowledge of defendant and that it contained a standard mortgage clause in favor of plaintiff. That after the fire, the plaintiff, by virtue of said policy and the mortgage clause which it contained, collected the sum of $2,500, which was in excess of three-fourths of the value agreed upon in the policy issued by this defendant; that thereby plaintiff has waived any rights it may have had under the policy issued by defendant, and the latter policy has become excess insurance; that by such payment plaintiff's interest in the premises was vitiated and its entire loss and damage by reason of the fire was fully satisfied; that the collection of the sum of $2,500 from the Rhode Island Insurance Company completely bars it from a claim under the Stuyvesant Insurance Company policy. Defendant also pleaded laches on the part of plaintiff, but that plea was abandoned. Defendant also pleaded its readiness to pay to plaintiff the amount of the premium paid to it, to wit, $14.25; but counsel for plaintiff stated before the lower court that they made no contention of waiver on the part of the defendant company by reason of the retention by it of the premium.

It appears from the record that the policy of the defendant fixed the value of the land covered by it at $7,000. In the policy issued by the Rhode Island Company the value of the house was fixed at $6,000.

In addition to the $2,500 insurance on the house under the Rhode Island policy, there was $4,000 on the furniture. Suit was brought by Mrs. Harley against the Rhode Island Company, in which suit defendant company and the land bank were made parties defendants. The suit was settled by payment of $2,500, the insurance on the house, plus $3,250 for insurance on the furniture. The $2,500 was paid to the land bank and held by it until Mrs. Harley determined whether she would exercise her option to reconstruct the building or to apply it to her mortgage debt. Finally she directed that it be applied to her mortgage debt.

Judge Whaley filed his order February 12, 1932, and judgment was duly entered thereon. He adjudged that defendant is indebted to plaintiff for the face of the policy and interest thereon.

The appeal from this order is predicated on seven exceptions.

Exception 1 charges error because the trial judge held that the sole issue in the case is whether the taking out of the policy of insurance by Mrs. Harley, the mortgagor, constituted such additional insurance as was prohibited by the terms of the policy issued by defendant, because he overlooked the additional ground that by accepting $2,500, the proceeds of the Rhode Island policy, the bank extinguished its interest in the mortgaged property.

Exception 2 challenges that same finding for the reason that the Rhode Island policy to Mrs. Harley, mortgagor, constituted additional insurance which was prohibited under plaintiff's policy with defendant, for that plaintiff's mortgage covered 102 acres of land in addition to the building, and plaintiff's loan was made on an appraisal of $3,000 of the building which was destroyed and an appraisal of the land at $7,000.

Exception 3 charges that it was error not to consider the provisions of the Federal Farm Loan Act (in evidence) to the effect that loans made thereunder shall not exceed 50 per cent. of the value of the land mortgaged and 20 per cent. of the value of the permanent insured improvements thereon.

Exception 4 charges that it was error not to hold that plaintiff by accepting the $2,500, which was the proceeds of the Rhode Island Company policy, violated the conditions of defendant's policy against additional insurance on the property covered by defendant's policy.

Exception 5 charges that it was error not to hold that it would be inequitable to allow plaintiff to recover $1,500 on the Stuyvesant Company policy after having received $2,500 on the Rhode Island Company policy, in view of the valuation of $3,000 fixed by defendant's policy.

Exception 6 charges error for not finding that the interest of plaintiff, as mortgagee, in the building insured by defendant's policy at the time of the commencement of the suit was extinguished by the collection of $2,500 from Rhode Island Company.

Exception 7 charges that it was error not to hold that plaintiff had no insurable interest in the property covered by defendant's policy at the time of the commencement of the suit, and, hence, cannot recover.

It will be observed that these exceptions divide themselves into groups on interlocking questions, and it therefore becomes unnecessary to consider them...