October 2, 1923. The opinion of the Court was delivered by The question in this case is the construction of Section 2718 of the Code of Laws of South Carolina, Vol. 1.
The appellant insurance company issued a policy of insurance on the house of the respondent. The value of the house as stated in the policy was $6,000, and the amount of insurance was $4,000. The loss has been fixed at $3,000. The insured claims that his policy covered his entire loss up to $4,000, and, inasmuch as his loss was $3,000, that he is entitled to recover the full amount of his loss, to wit, $3,000. The insurance company said, "No." Section 2718 provides that the recovery shall be in proportion only, and inasmuch as there was a loss of only half of the value of the property insured, there can be a recovery for only one-half of the amount of insurance, to wit, $2,000.
The statute must be given a reasonable construction. The term "reasonable" has reference to the evil to be provided against and the remedy provided. It is very evident that the sole purpose of the statute is to fix the value of the property destroyed. A man wants to insure his house. The house *Page 200 is standing, and its value can be fixed with certainty, and a little trouble enables the insurer and insured to fix a value that is just to all parties. When the house is destroyed by fire, an estimate of the value of the house that was and is no more cannot be fixed with any degree of certainty. An insurer might collect premiums of insurance for 10 years at a value of $6,000, and then after the possibility of a just estimate of the value was gone, the insurer could say the house never was worth more than $2,000. This condition was intolerable, and the Legislature said, "Fix the value at the time of issuing the policy of insurance, while the house is still in existence." If we keep in mind that the purpose of the statute is to fix the value of the property then if a house is valued in a policy of insurance at $6,000 and is totally destroyed, the loss is $6,000. That cannot be called in question. If the house is partially burned, say one-half of its value is destroyed, then the loss is $3,000, and that also is fixed. The proportion of loss is one-half. It cannot be, and should not be so construed that the Legislature intended to provide that the insured who has paid for protection up to $4,000 shall be paid only $2,000, when his loss is fixed at $3,000. The contract is that the insurer will pay the loss up to $4,000 and he must pay the loss up to $4,000. That is the contract and a lawful contract, unless forbidden by this statute. The language is not altogether clear, but it manifestly is intended to provide a means of ascertaining the amount of loss and not a limitation of the liability of the insurer and should not be so construed, unless the language used admits of no other construction. The "proportionate amount" is an amount in proportion to the loss and not proportionate to the amount of the policy. The insurer must pay the full loss limited by the amount named in the policy. The words of the statute are:
"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." *Page 201
The statute itself makes the distinction between the amount of the policy and the amount of the loss. The distinction should be preserved in its construction.
The judgment for $3,000 is affirmed.
MR. CHIEF JUSTICE GARY and MR. JUSTICE WATTS concur.