July 17, 1914. The opinion of the Court was delivered by Action upon a fire policy of insurance. The property insured was a gin and house. The loss was total, building and machinery. The plaintiffs had a verdict for the full amount stipulated in the policy, which was $2,355.00.
The defendant appeals, and assigns seventeen errors. Of these six about the admission of incompetent testimony; two about the refusal to strike out testimony; four about a refusal to direct a verdict; five about the charge and the refusal to charge.
In our judgment, all the exceptions are without merit. The appellant has presented the case under three heads: (1) the admission of testimony; (2) the direction of a verdict, and (3) the charge; and this opinion will adopt that procedure, though not that order.
But, prior to such consideration, the setting of the case is best manifested by a history of the transaction.
The plaintiff, Padgett, is 55 years old, and never had a suit at law before this; he had purchased the gin plant on a credit, and the real solicitors of the insurance were the Gullet Gin Co., which had a $1,500.00 mortgage on the plant, and one Crymes, who sought the business as agent. It was stated at the bar that Crymes is a good man. Two companies had theretofore issued policies of insurance on the plant and then cancelled them. The second of these policies was secured and written by Crymes, the same who wrote the third, that is now in issue. *Page 258
Before the policy had been written the land upon which the house and machinery stood had belonged to W.D. Padgett's wife; but before the policy was issued she conveyed the same to him, by what is, in legal effect, and was, an unwitnessed deed, and this to conform to a rule of the company that the insured must own the property embraced in a policy.
The defendant insured a house and machinery therein against loss by fire; it got and retains the premium which was paid therefor; its agent knew when the policy was written that the house was at the time idle and unoccupied; its agent also knew that one or more policies upon the property had been cancelled aforetime; the good faith of the agent and of the insured is not impugned by pleading or testimony; the house was erected in the summer of 1912; the machinery then installed; the policy was written 29th October, 1912; the fire occurred 1st January, 1913, and the destruction was total.
The law suit is to determine the rights of the parties; the insured demands to be paid; the insurer declines to pay.
The errors charged fall around the defenses plead, and may be best considered in connection with the defenses. The defenses are: (1) failure of Padgett to make proper proof of loss; (2) title warranted to be in Padgett; (3) property warranted to be in active operation; (5) Padgett misrepresented that insurance on the property had been declined only by one company other than defendant.
As to "proof of loss:" technical "proof of loss" is not proof in Court of the loss.
The first is for the benefit of the company, and the duty to make it arises out of the terms of the policy; the second is for the benefit of the jury, and is made before the jury pursuant to the rules of evidence to prove a liability under the policy; and it exists independently of the technical "proof of loss." *Page 259
In the very nature of the case, "the proof of loss" must only substantially conform to the requirements of the policy. The real issue about that is, has the insured informed the insurer of the fire and all the particulars of it? That is what the insured here agreed to do.
The particular words of the policy thereabout ought to be reported.
On 21st January, 1913, twenty days after the fire, the insured made and swore to a statement which set out the circumstances of the fire. That statement ought to be reported. A copy of it was sent to the company, and the receipt of it was not denied.
The company thereafter sent a Mr. Cothran to the locus, and he talked with the insured about the fire; he desired the insured to sign a paper, which the insured declined to do, and there was no demand by Mr. Cothran, or by the company, for any further or more particular "proof of loss."
The interest both of the insurer and the insured, and that includes the interest of the public, would have been subserved by a suggestion from the company to Padgett that his "proof of loss" was not so full and exact as was required by the policy. And the failure to make such suggestion was a waiver of any right to have it. Madden v. Ins. Co.,70 S.C. 295, 49 S.E. 855.
But the "proof of loss" that was supplied was a reasonably full and exact compliance with the general words of the agreement to make it, under the circumstances of the case. There were no particulars to report; the conflagration was the entirety.
Akin to "proof of loss" was the loss proven at the trial by the witnesses.
The defendant has excepted to the character of that proof.
As is well contended by appellant, the "proof of loss" made to the company does not stand for proof in Court. *Page 260
But Crymes, speaking for his principal, answered in the application that he "considered the values as stated in the application to be correct," and he "fully recommended the risk as free from all financial hazard;" that the "premises were clean and in good condition."
The witness, Merchant, testified that he and Crymes went to the ginhouse and listed the property and looked at it.
The witness, Padgett, testified that all the property there listed was totally destroyed by fire. The complaint alleges total destruction of it, and the answer admitted it.
There was competent proof of the existence of the property, piece by piece, and the total destruction of it.
The appellant's second contention, that the policy must run to the real owner of the thing insured, is true.
The policy stipulated that the assured was the sole owner in fee of the land upon which the outfit stood.
The fact is, that the land once belonged in fee to the wife, but she had conveyed it to her husband before the policy was written, by what, in effect, was an unwitnessed deed, for the witness signed after delivery and after the fire, and upon acknowledgment by the wife that she had signed the deed aforetime.
Had the wife conveyed to the husband the land, by a properly phrased deed to carry the fee, except it was not witnessed, that would constitute the husband the equitable owner of the fee, an interest fully capable of insurance, and as good for this, and many purposes, as a legal fee. The case is not altered that the deed was improperly witnessed.
It is not incumbent to cite authority for this statement of the law, for it is elementary.
As far as the witnesses were able to do, amidst the objection of counsel, they proved the signing by the wife; and about that there is no real ground to doubt even.
About the third defense, the warranty of profitableness, there was such a warranty. The language is. "That the *Page 261 property had been profitable, and the assured has every reason to believe that it will so continue."
But Crymes, the agent, directly, and the company, through the statement in the application, knew the outfit was put up in August, 1912, that it was insured the 29th October, 1912, and that there was then no chance to say it had been profitable. The insurer knew all about that matter that the insured could know. There could be no profit without operation, and there had practically been no operation.
Upon the issue of whether the insured did warrant that the gin was in actual operation when insured, the appellant hardly quotes correctly the answer of the insured thereabout.
The question was: "Is the gin operated by owner, manager or tenant?"
The answer was: "Owner."
Was the question framed to find out if the gin was idle or going, or was it framed to find out if it was worked by its owner or by a tenant?
In the application of the Dixie Insurance Co., the question was: "Will the gin be operated this season?" And the answer to that was: "Stopped, as gasoline engine * * * is defective."
The question in the first case stated is not sufficiently definite to convict the insurer of making an untrue answer to it; or to constitute it as a guarantee that on October 20th, 1912, the gin was then being operated.
More than this, the answer was written by Crymes, the agent, and he knew the fact. If anybody was guilty of misrepresentations it was Crymes. But the answer did not plead misrepresentation; the Court charged the jury upon the effect of it, though it was not in the case; and Crymes, who knew the facts, was not sworn.
The argument here is, that Crymes and Padgett, in effect, committed a fraud on the company, and that the case thus *Page 262 falls under Knobelock v. Germania Sav. Bank, 50 S.C. 259,27 S.E. 962.
There is not a scintilla of testimony to sustain the charge of fraud.
The fifth defense has not been argued, and must be considered abandoned.
The judgment below is affirmed.