Lower Main Street Bank v. Caledonian Ins. Co.

• Decision Date: 09 June 1926
• Docket Number: 12011.
• Parties: LOWER MAIN STREET BANK et al. v. CALEDONIAN INS. CO.
• Court: South Carolina Supreme Court

133 S.E. 553

135 S.C. 155

LOWER MAIN STREET BANK et al. v. CALEDONIAN INS. CO.

No. 12011.

Supreme Court of South Carolina

June 9, 1926

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

Action by the Lower Main Street Bank and another against the Caledonian Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

Cothran J., and Purdy, A. A. J., dissenting.

The following is the trial court's charge on the effect of the warranty contained in the policy sued on:

Of course, the bank stands in the shoes of Mr. Lester, and if the bank could not recover, Mr. Lester could not recover, and vice versa, and also the bank and Mr. Lester cannot come into court and say that half the policy is good and the other half bad. In other words, they stand or fall on the policy as it stands written with the statements of warranty as well as the exceptions and as well as this provision providing for theft liability. It is admitted in this case that Mr. Harry Cantey was the agent of the insurance company in writing the policy. There is written in the policy "Assured's occupation or business is proprietor Rialto and Ideal Theaters." Unless there is something else to show that proprietor had some peculiar meaning other than the meaning that I have taken, and of course, I have taken meaning because it is the accepted meaning, the generally accepted meaning of it is the owner of it. When you say the proprietor of a business, you mean the owner of that business; nothing more or less. If there is something more or less about it, there will have to be something else there to define that difference, and then it becomes a peculiar meaning.

We have a statement that the assured's occupation or business is proprietor of the Rialto and Ideal Theaters. We are dealing with the Ideal Theater. If that insurance policy was issued on the strength of and in consideration of certain warranted statements, said to be warranted and said to be true, and one was that Mr. Lester was the proprietor of the Ideal Theater and on the strength of that this policy was issued, where do we come then from that? The best way I can get at it is to charge these several things and to let you come to your conclusion.

If the agent of the company wrote that statement in there and at the time knew that the Ideal Theater was a corporation, and if the agent writing it in made the mistake of saying proprietor on the part of Mr. Lester as regards the Ideal Theater, then the plaintiffs would not be bound by that statement, and if the case is otherwise made out plaintiffs would be able to recover.

If the agent knew at the time that he put that in there, even though Mr. Lester left it to him to make statements that Mr. Lester himself ought to have made, and without saying anything to Mr. Lester he went ahead and made out the policy and put in it whatever was necessary to go in it, and the agent knew at the time when he put down proprietor that Mr. Lester was an officer of the corporation, then the company would be deemed to know what the agent knew, that is, that Lester was not the proprietor, and it meant something else or was put down by mistake, and Mr. Lester would not be bound.

Or if the agent of the company knew that Lester was not the proprietor of the corporation, but was an officer of it operating the Ideal Theater, and yet put in proprietor, and Mr. Lester did not know of such act on the part of the company's agent, you ratified such a statement, thereafter Mr. Lester and the bank would not be bound by that warranty, and if Gore was an employee of the corporation, Lester and the bank would be able to recover.

It is for you to say whether that is true in this case or not.

Here is the other view of the situation, which has a lot of things in it for you gentlemen to decide as to whether this has been proven or not in this case.

If Mr. Lester left it to the company's agent to make out the policy and to include any statements that the policy might call for as having to be made therein as warranties on Mr. Lester's behalf, and on the strength of that a policy was issued, and if the agent put proprietor of the Ideal Theater on the part of Mr. Lester, there being no mistake on the agent's part, and the agent of the company did not know at the time that Mr. Lester was an officer or agent of the corporation known as Ideal Theater, then the company could assume that Lester was the proprietor and could take exactly what was turned into it; that is, that Lester was the proprietor of the Ideal Theater, and issue a policy on the strength of that statement, and it could also assume then necessarily that any one employed at the Ideal Theater would be Mr. Lester's employee and employed by Mr. Lester as proprietor.

If you believe that that was so and later it turned out that the corporation really owned the Ideal Theater, that would make no difference as far as this contract is concerned. If those facts are so, if you believe that, then Lester and the bank would be bound by that statement that was made, and Lester and the bank would not be able to recover and would be bound by the warranted statement on which the contract was delivered, and if it turned out thereafter that that statement was false at the time, untrue at the time that it was made, under the supposition that I have given you there, neither of these plaintiffs would be able to recover. If they warranted that statement to be true and on the strength of that policy was issued and the premium paid, that is their contract, and they are bound by it.

Fowles & Bailey, of Columbia, for appellant.

C. T. Graydon and Moorman & Moorman, all of Columbia, for respondents.

BLEASE J.

L. T Lester, Jr., as owner of an automobile, and Lower Main Street Bank, as the holder of a mortgage covering the automobile, as plaintiffs, brought suit against the defendant on a policy insuring the automobile against theft and fire. The defendant set up the defense that the policy of insurance, involved in the action, contained the provision excepting "theft *** by any person or persons *** in the assured's service or employment, whether such theft *** occurred during the hours of such employment or not," and denied that the property insured was stolen by any one not in the employ of the plaintiff Lester, and further denied that the loss of the property was covered by the policy of insurance. The trial of the cause was in the county court of Richland county. There was a motion on the part of the defendant for a directed verdict in its favor, on the ground that the evidence was conclusive that an employee of Lester, one of the plaintiffs, stole the property in question, and that the theft by such employee was a risk not assumed by the defendant under the terms of the policy. This motion was refused. The verdict of the jury was in favor of the plaintiffs for the...