Ollie v. Security Mutual Underwriters

• Decision Date: 03 August 1956
• Docket Number: No. 7213,7214.,7213
• Citation: 235 F.2d 932
• Parties: N. M. OLLIE, Appellant and Cross-Appellee, v. SECURITY MUTUAL UNDERWRITERS, Appellee and Cross-Appellant, N. M. OLLIE, Appellant and Cross-Appellee, v. The FULTON FIRE INSURANCE COMPANY, Appellee and Cross-Appellant,
• Court: U.S. Court of Appeals — Fourth Circuit

235 F.2d 932 (1956)

N. M. OLLIE, Appellant and Cross-Appellee, v. SECURITY MUTUAL UNDERWRITERS, Appellee and Cross-Appellant, N. M. OLLIE, Appellant and Cross-Appellee, v. The FULTON FIRE INSURANCE COMPANY, Appellee and Cross-Appellant,

Nos. 7213, 7214.

United States Court of Appeals Fourth Circuit.

Argued June 20, 1956.

Decided August 3, 1956.

Julian B. Salley, Jr., Aiken, S. C. (Henderson, Salley & Cushman, Aiken, on brief), for appellant.

Henry Busbee, Aiken, S. C. (Williams & Busbee, Aiken, S. C., on brief), for appellees.

Before PARKER, Chief Judge, and SOPER and PRETTYMAN,^* Circuit Judges.

PRETTYMAN, Circuit Judge.

Appellant Ollie owned a store building in New Ellenton, South Carolina. He had two fire insurance policies on it, one with Security Mutual Underwriters for $6,000 and the other with The Fulton Fire Insurance Company for $5,500. Each policy stated that the agreed value and total insurance on the building was $11,500. Some time after those policies were in effect, and unbeknownst to those companies, Ollie took out a third policy for $3,000 with the Ohio Farmers Insurance Company. He testified he did this because the first two policies were to protect a mortgage on the building and he wanted additional insurance to protect his equity.

On July 5, 1954, the building burned. In a day or two an insurance adjuster called, and Ollie gave him all the policies. The adjuster obtained from contractors estimates of the damage and thereafter prepared proofs of loss which recited the damage to be $2,508.72. Ollie signed these documents. Thereafter the adjuster tendered Ollie two checks, one from the Fulton Company for $951.58 and one from Security Mutual for $1,038.09. An additional award of $183 was thereafter made, and the checks were recomputed and redelivered.

A month after the fire, and while the foregoing events were transpiring, the Zoning Commission of New Ellenton condemned the remains of the building as unsafe. Ollie appealed the ruling, a hearing was held, and the ruling was affirmed. Ollie sold the building as it then was to one Keenan for $75.00. Keenan sold it to one Tinch, who razed it. Tinch testified that when he began to remove the debris the whole roof caved in and that the concrete blocks of which the building had been constructed were practically worthless because, having been heated by the fire and suddenly chilled by the water thrown on them, they "just crumpled up."

In the meantime Ollie declined the checks of the insurance companies based on a partial loss, and claimed total loss. Being refused he filed these present actions.

The first question is whether Ollie is entitled to recovery on the basis of a total loss. It is agreed here by counsel that the attention of the trial judge was not invited to the opinion of this court in Rutherford v. Royal Ins. Co.¹ In that case this court said:

"If the fire resulted in the condition which necessitated the destruction of the building, and which, because of local ordinances, made impossible its repair, the insured was entitled to recover as upon a total loss."

We think that case controls here and requires decision for plaintiff Ollie on that point. The issue as to the condition of the building prior to the fire, which was in the Rutherford case, is not in the present case.

The second point is whether the two policies issued by Fulton and Security Mutual were voided by the issuance, without their knowledge, of the third policy, which when added to the other two was in excess of the agreed maximum value and insurance. It is conceded by counsel that the policies would be so voided if the point had not...