Hatcher v. Harleysville Mut. Ins. Co., No. 20217

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: LEWIS
• Citation: 266 S.C. 548,225 S.E.2d 181
• Parties: Thomas T. HATCHER and Gladys W. Hatcher, Respondents, v. HARLEYSVILLE MUTUAL INSURANCE COMPANY, Appellant.
• Decision Date: 18 May 1976
• Docket Number: No. 20217

Page 181

225 S.E.2d 181 266 S.C. 548 Thomas T. HATCHER and Gladys W. Hatcher, Respondents,
v.
HARLEYSVILLE MUTUAL INSURANCE COMPANY, Appellant. No. 20217. Supreme Court of South Carolina. May 18, 1976.

Page 182

[266 S.C. 549] Jefferies & Fish, Greenwood, for appellant.

[266 S.C. 550] Burns, McDonald, Bradford, Erwin & Patrick, Greenwood, and J. Kendall Few, Walhalla, for respondents.

[266 S.C. 551] LEWIS, Chief Justice:

This appeal involves appellant's liability under a Homeowner's policy of insurance issued to respondents, insuring, in addition to personal property, a dwelling occupied by them, to which they had not received a deed but had orally agreed to purchase. While other questions are argued, much of the controversy revolves around the respective contentions of the parties as to whether respondents had an insurable interest in the real property and the effect of the enforceability of the oral contract to purchase upon the question of insurable interest.

Respondents, Thomas T. and Gladys W. Hatcher, orally agreed to purchase a lot and dwelling in McKellar Farms Subdivision in Greenwood County, South Carolina, on October 4, 1974, for a definite price. The purchase was to be financed through a loan from the Farmers Home Administration. On October 5, 1974, the day following the agreement to purchase, respondents moved from Washington to Greenwood and occupied the dwelling pursuant to the oral contract of sale. The purchase price was to be paid at the time of the closing of the loan. On October 8, 1974, after respondents went into possession, the seller cancelled a builders risk insurance policy maintained by him over the building during construction and procured from appellant, Harleysville Mutual Insurance Company, with funds of respondents, a Homeowners policy insuring the property in the names of respondents, as the owners. The loan from the Farmers Home Administration had been approved and the actual closing of the sale awaited only the receipt of the check from the lender when the property was damaged by fire.

The dwelling and its contents were damaged by fire on October 11, 1974. Appellant paid to respondents the sum of $4,219.89 under the policy for damage to their personal property; but denied coverage for loss to the dwelling on [266 S.C. 552] the ground that respondents had no insurable interest

Page 183

therein since the only interest they held was under an allegedly unenforceable oral contract to purchase.

After the fire loss, respondents purchased another house and lot from the seller and brought this action to recover the sum of $15,410.55, the agreed amount of the fire loss to the insured dwelling. Upon the trial of the case and at the conclusion of the testimony, each of the parties moved for a direction of verdict in their favor; that of respondents was granted by the trial judge and that of appellant denied. The motion of respondents was granted on the ground that they 'had undertaken such part performance as to render them clearly subject to responsibility in a court of equity for specific performance' and therefore had an insurable interest in the property.

Although the appeal is from a directed verdict in respondent's favor, there is no request that a new trial be granted. The only contention is that a verdict should have been directed for appellant. Therefore, if appellant was not entitled to a directed verdict, judgment must be affirmed. Of course, appellant would not have been entitled to a directed verdict if the evidence presented jury issues.

The policy of insurance under which recovery is sought, admittedly, required that respondents own an insurable interest in the insured dwelling in order to recover....