Stokes v. Liverpool & London & Globe Ins.

The opinion of the Court was delivered by Mr. Justice Watts. This action was commenced in June, 1922, to recover $4,000 and,interest thereon at the legal rate from November 23, 1921, on account of a contract of insurance issued to the plaintiffs by the defendant for damages sustained by the plaintiffs by the destruction by fire of the insured property on November 23, 1921. Liability was denied, first, on the ground that there had been an assignment of the policy in violation of its terms and by an amended answer a further defense was allowed over plaintiffs objection; said defense as well as the original defense, being set forth in the copy of answer hereinbefore set out. The cause came on for trial before Hon. N. G. Evans, special Judge, and a jury, at Darlington at the fall, 1923, term and resulted in a verdict for the defendant. Motions were submitted by the plaintiffs and the defendant for the direction of verdicts, respectively, in their favor and were overruled. Plaintiffs moved for a new trial on grounds hereinafter set out. From judgment duly entered the plaintiffs served due *526 notice of intention to appeal. The relevant portions of the pleadings and testimony, including proffered instructions and the trial Judge’s charge, hereinafter appear. The appeal questions the allowance of the amended answer; the correctness of the rulings of the Court on certain testimony; the refusal of plaintiffs’ motion for a directed verdict; the refusal and modification of plaintiffs’ requests to charge; and the refusal of plaintiffs’ motion for a new trial. The exceptions are 20 in number. Exceptions 1, 2, 11, 15, and 19 complain of his Honor allowing respondent to amend its answer. That was a matter purely within the discretion of his Honor, and we see no erroneous exercise of that discretion under the circumstances of the case. ' Exceptions 3, 4, 5, 6, 8, and 11 allege that error was committed in allowing certain testimony to be admitted, particularly the record in the claim and delivery action of W. H. Steele against M. D. Stokes, and challenge the correctness of his Honor’s instructions in reference thereto. These exceptions are sustained. There is no question that the property insured was partnership property, and it was prejudicial to allow in evidence the record in the claim and delivery action of W. H. Steele v. M. D. Stokes. It was a proceeding against M. D. Stokes, and not against M. D. and M. E. Stokes, copartners. There was no moregage to be foreclosed; it was under a retention of title contract: no service was made on Mrs. M. E. Stokes; she was not even a party to the proceeding. It does not appear affirmatively that it was the same property covered by the policy of insurance, and it does appear from the record that Steele had been eliminated by the order of Judge Dennis, October 27, 1923, and order permitting intervention vacated, and status restored which existed before attempted intervention. The judgment of the claim and delivery proceeding is not against, the partnership. The property insured is partnership property; the insurance policy makes it *527 such. A judgment, in an action brought against an individual where the partners are not joined, has no validity whatever, in respect to partnership property. Haslet v. Street, 2 McC., 310; 13 Am. Dec., 724. Bull v. Lambson, 5 S. C., 288. Manufacturing Co. v. Cycle Co., 55 S. C., 528; 33 S. E., 787. The record shows beyond question that the property insured was the partnership property of the appellants, and it was destroyed by fire. The judgment was against M. D. Stokes individually, and was an absolute nullity as far as the partnership property was concerned, had nothing to' do with the partnership property covered by the policy of insurance sued on. Exceptions 14 and 16 are as to assignment. There was not an absolute assignment, but the evidence shows that it was a pledge as a collateral security for a debt. A pledge of an insurance policy as a collateral security is not an assignment within the prohibition of the policy. Henderson v. Ins. Co., 96 S. C., 430; 81 S. E., 171. Creed v. Ins. Co., 111 S. C., 487; 98 S. E., 334. I think the appellant was entitled to a directed verdict as asked for on all the evidence in the case. There was a policy issued on partnership property. That partnership property was wholly destroyed by fire. The respondents failed to make good the defense set up in their answer, original and amended. I think the judgment should be reversed, with directions to the Clerk of Court for Darlington County, to enter up judgment for plaintiffs as provided for by rules of Court, but a majority of the Court think differently, and the judgment is reversed, and new trial granted. New trial. Messrs. Justices Eraser, Cothran, and Marion concur. Mr. Justice Eraser : I think there should be a reversal and a new trail, and not a directed verdict. *528 Mr. Justice Cothran concurs. Mr. Chiee Justice Gary did not participate.