Ford v. George Washington Fire Ins. Co.

The opinion of the Court was delivered by Mr. Justice Stabler. This is an action on a fire insurance policy issued by the ■defendant on the house of the plaintiff Mrs. Ford; H. G. Anderson, the other plaintiff, is a mortgagee, to whom the loss was payable. The policy was issued on November 3, 1924, to continue in force for one year. The agreed (in the policy) value of the house was $4,000.00, and the amount of insurance 3,000.00. On May 26, 1925, the house was partially destroyed by fire. An appraisal was had, and the umpire and appraisers, on June 26, 1925, filed an award in the following language: “We find the value of the building as per policy $4,000.00, and the loss by fire two-thirds thereof, making the loss $2,666.66. (We. further find that the actual value of the building at the time of the fire to be $3,000,00, and the loss $2,000.00.)” The plaintiffs contended that, as the value of the building was agreed in the policy to be $4,000.00, they were entitled to two-thirds of $4,000.00, or $2,666.66. The defendant contended that, as the actual value of the building at the time of the fire was $3,000.00, and the actual loss $2,000.00, its liability should not be more than two-thirds of $3,000.00, *214 or $2,000.00, and upon its refusal to pay a larger sum than that the plaintiffs brought this action. Jury trial was waived and the case submitted to his Honor, Judge Shipp, on an agreed statement of fact, which contained the appraisers’ award already set forth, and also the following paragraph: “(3) It is further admitted that the actual value of the building so insured immediately prior to the fire was the sum of $3,000.00; that the actual loss and damage thereto caused by the fire was the sum of $2,000.00; that the fractional damage to said buiding by fire was two-thirds of the value thereof at the time of the fire; and that said building at 'the time that the insurance was issued was worth $3,000.00, no material depreciation having occurred from date of insurance to time of fire.” Judge Shipp gave judgment for the plaintiffs for the full amount contended for by them. From the decree of Judge Shipp the defendant appeals, the sole issue being whether the defendant’s liability amounts to $2,000.00, or to $2,666.66. The question to be decided involves the construction of Section 4095, 3 Code 1922, in a case where there has been a partial loss by fire under a “fixed value’’ policy. The pertinent portion of. the Section is as follows: “No fire insurance company or individuals writing fire insurance policies, doing business in this State, shall issue policies for more than the value to be stated in the policy, the amount of the value of the property to be insured, and the amount of insurance to be fixed by insurer and insured at or before the time of issuing said policies, and in case of total loss by fire, the insured shall be entitled to recover the full amount of insurance and a proportionate amount in case of partial loss.” The case of Aiken v. Home Insurance Co., reported in 137 S. C., 248; 134 S. E., 870, is the latest utterance of this Court upon this subject. That was a case where the *215 total value of the building fixed in the policy was $12,000.00, and the total insurance was $8,000.00, $1,000.00 of which Was with the defendant company. The property was partially destroyed by fire. The question of the amount of loss sustained was submitted to appraisers, the majority of whom made an award fixing the sound value of the property at $10,500.00, and the loss at $6,650.00. The defendant claimed that its liability was limited to one-eighth of the amount of the loss as fixed by the appraisers. The plaintiff claimed that the terms of the policy prevailed as to the value of the property, and an action was brought for the whole amount of the insurance. On trial of the case, the presiding Judge directed a verdict for the plaintiff against the company in the sum of $1,000.00, the full amount of the policy. On appeal this Court held, as to cases where claims are made for insurance on property partially destroyed by fire, (1) that an agreement to submit to an award is an agreement to submit to an award in accordance with the Statute; (2) that the value of the building, being fixed in the policy, is not involved in the question submitted to be passed upon by the appraisers; (3) that the appraisal and award is not binding upon the insured, where the appraisers attempt to fix a different value for the property than that agreed upon in the policy; and (4) that the finding of the appraisers as to the sound value of the property should be discarded as surplusage. Under the authority of the Aiken case, we conclude that the following statement in the award in the present case must be rejected as surplusage: “We further find that the actual value of the building at the time of the fire to be $3,000.00, and the loss $2,000.00.’’ Hence the only portion of the award having any legal effect was that portion which found the value of the building, as fixed in the policy, to be $4,000.00, and the loss to be two-thirds thereof, or $2,666.66. The applicability to the present case of the principle *216 advanced in the Aiken case, that the value'fixed in the .policy 'must govern in case of partial loss, is not affected by the circumstance that the respondent; as shown in the state'.ment of fact; agreed that the actual (or sound) value of .the building was $3,000.00, and the actual loss, $2,000.00. The respondent has duly maintained, throughout this case, that the actual value of the building has nothing to do with the question at issue; that the conceded actual loss of $2,000.00 is nothing more than the result of, and is found by, applying to the' actual or sound value the finding of the appraisers that the fractional damage to the buildIng was two-thirds of its value; and that the agreement relating to actual value and actual loss does not mean that the respondent admits that, under the policy and the award of appraisers, she is not entitled to more than $2,000.00. Nor does she concede that to take two-thirds of the sound •value of the building in determining the loss is the correct and legal way to arrive at the amount which she is entitled to recover under the policy. We agree with this contention. The value of the building was agreed to by the parties when the policy was issued as $4,000.00, 'and the respondent paid the premium based upon such agreed value. The appraisers found the loss to the plaintiff by fire to be two-thirds of such value, or the total sum of $2,666.66. Neither the appraisers nor any one of the parties to the policy could change this value. It is a part of the contract, and, in the absence of fraud, both parties are bound by it. The facts of actual (or sound) value and actual loss, determined in relation to such sound value, have no greater weight when conceded by the respondent than they would have had if established in any judicial manner; and no matter how established, they could not fix the value of the building for purposes of settlement of any loss under the policy, as that would be contrary to the Statute; and, as •the agreed value must be accepted whether it is the actual *217 'value or not, it follows that the amount of any partial loss must necessarily be determined by reference, not to the ‘actual or sound value, but to the agreed value as fixed in 'the policy. ■All exceptions are overruled, and judgment affirmed. 'Mr. Chief Justice Watts, Mr. Justice Brease, and Mr. Acting Associate Justice Ramage, concur. Mr. Justice Cothran dissents.