Inabinet v. Royal Exchange Assur. of London

• Decision Date: 10 February 1932
• Docket Number: 13349.
• Parties: INABINET v. ROYAL EXCHANGE ASSUR. OF LONDON et al.
• Court: South Carolina Supreme Court

162 S.E. 599

165 S.C. 33

INABINET v. ROYAL EXCHANGE ASSUR. OF LONDON et al.

No. 13349.

Supreme Court of South Carolina

February 10, 1932

Appeal from Common Pleas Circuit Court of Orangeburg County; M. M Mann, Judge.

Action by C. R. Inabinet against the Royal Exchange Assurance of London and another. From a judgment for plaintiff, the Royal Exchange Assurance of London appeals.

Affirmed.

John T Seibels and James H. Fowles, both of Columbia, and M. E Zeigler, of Orangeburg, for appellant.

Lide & Felder, of Orangeburg, for respondent.

STABLER J.

This is an action on a fire insurance policy. The complaint alleged that on March 14, 1930, the defendant Royal Exchange Assurance of London insured plaintiff's residence against loss or damage by fire in the sum of $2,500, the premium being duly paid and the policy delivered; that at the time the policy was issued the defendant was advised that J. B Robinson held a mortgage over the tract of land upon which the insured building was located; that the building was totally destroyed by fire during the life of the policy, and that the defendant, though duly notified thereof, refused to pay the insurance and denied liability therefor. Judgment is sought for the sum of $2,500 and interest.

As one of its defenses, the defendant set up the following provision of the policy: "This entire policy shall be void, unless otherwise provided by agreement in writing added hereto if with the knowledge of the insured, foreclosure proceedings be commenced or notice given of the sale of any property insured hereunder by reason of any mortgage or trust deed"; and alleged that, with the knowledge of the plaintiff and without the agreement of the defendant, and before the building was burned, foreclosure proceedings of the J. B. Robinson mortgage were commenced and notice of sale was given.

Plaintiff demurred to this defense on the ground that, under section 4096 of the Civil Code of 1922, it does not constitute a defense to the cause of action set up in the complaint nor a bar to recovery. The demurrer was sustained by Hon. M. M. Mann, circuit judge, and defendant appeals.

Besides the provision already quoted, the policy contains the following clause: "Any loss that may be ascertained and proven to be due the assured under the building items of this policy shall be held payable to J. B. Robinson as interest may appear, subject, nevertheless to all the terms and conditions of this policy."

Section 4096 provides: "That hereafter any clause in any policy of insurance purporting or undertaking to limit or invalidate the force of such policy in case of encumbrance by real estate mortgage of the property insured by such policy, shall be, and the same is hereby, declared to be null and void."

After pointing out that the "standard" mortgagee clause was not used in the policy, but only the "simple loss payable" clause, appellant cites the case of Norris v. Insurance Company, 55 S.C. 450, 33 S.E. 556, 74 Am. St. Rep. 765, construing practically the same provision contained in the policy here, as supporting its position, and earnestly maintains that the subsequently enacted section 4096 does not nullify the policy provision against foreclosure proceedings, but only any provision against an undisclosed real estate mortgage.

In the absence of statute the decision in the Norris Case would control here and would be fatal to plaintiff's recovery but the question is whether the statute had the effect of changing the law as laid down by the decision in that case. In answering this question, we must bear in mind that: (1) In this State forfeitures of insurance contracts are not favored by the courts. Scott v. Insurance Company, 102 S.C. 115, 86 S.E. 484; Ward v....