Court Opinion

ID: 3881511
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:12:50.536047+00
Date Added: 2024-06-11T07:41:56.804553
License: Public Domain

Two quite divergent opinions have been entertained by the members of this Court in reference to the construction of Section 4095, Volume 3, Code 1922. The majority have held, in the cases of Parnell v. Ins. Co., 126 S.C. 198; 119 S.E., 191; 32 A.L.R., 648. Columbia Co. v. Ins. Co., 132 S.C. 427;128 S.E., 865, and Aiken v. Ins. Co., 137 S.C. 248;134 S.E., 870, that, in the event of partial loss, the insured is entitled to the full amount of his actual loss if within the amount of his insurance, construing the contract as one of strict indemnity; the minority have contended that the insured is entitled to such a ratio of the amount of his insurance as the sound value (not agreed valuation) bears to the actual loss, construing the contract as a valued policy.
The opinion of Mr. Justice Stabler adopts neither of these constructions, but insists that the insured is entitled to such a ratio of the agreed valuation as the agreed valuation bears to the actual loss, expressed in terms of the agreed valuation.
In the Parnell case the elements were:

Agreed valuation ............................... $6,000.00
Sound value ....................................  4,000.00
Actual loss ....................................  3,000.00
Amount of insurance ............................  4,000.00

The application of what I may denominate the majority rule entitled the insured to $3,000.00, the amount of his actual loss, within the amount of the insurance, $4,000.00. The application of what I may denominate the minority *Page 218 
contention would have entitled the insured to the same amount: 4,000:3,000::4,000:X=$3,000. (I confess to an error in the statement of the proportion in my dissenting opinion: 6,000: 3,000::4,000:X=$2,000. It should have been as above stated: 4,000:3,000::4,000:X=$3,000.)
The application of the rule suggested in the opinion of Justice Stabler would have entitled the insured to $4,500, limited, of course, to the amount of insurance $4,000: 4,000:3,000::6,000:X=$4,500; or, which attains the same result: 6,000:4,500::6,000:X=$4,500; that is, sound value or agreed valuation is to the actual loss, or actual loss expressed in terms of the agreed valuation, as the agreed valuation is to the amount recoverable, an excess of $1,000.00 over the amount recoverable under either of the other two constructions; that amount being also in excess of the amount of actual loss, $3,000.00, and allowing the insured as much for a partial loss as if the building had been a total loss.
In the case at bar, the elements are:
Agreed valuation .................................. $4,000.00
Sound value .......................................  3,000.00
Actual loss .......................................  2,000.00
Amount of insurance ...............................  3,000.00

The application of the majority rule would entitle the insured to $2,000.00, the amount of his actual loss, within the amount of the insurance, $3,000.00. The application of the minority contention would entitle the insured to exactly the same amount: 3,000:2,000::3,000:X=$2,000; that is, sound value is to actual loss as the amount of insurance is to the amount recoverable.
The application of the rule suggested in the opinion of Justice Stabler would entitle the insured to $2,666.66: 3,000:2,000::4,000:X=$2,666.66; or, which attains the same result: 4,000:2,666.66::4,000:X=2,666.66; that is, sound value or agreed valuation is to actual loss, or actual loss expressed in terms of the agreed valuation, as the *Page 219 agreed valuation is to the amount recoverable; an excess of $666.66 over the amount recoverable under either of the other two constructions, and that amount in excess of his admittedly actual loss.
In the Columbia Real Estate Co. case the elements were (using round figures):
Agreed valuation ................................. $9,000.00
Sound value ...................................... 25,000.00
Actual loss ...................................... 12,500.00
Amount of insurance ..............................  7,500.00

The application of the majority rule entitled the insured to his actual loss up to the amount of the insurance, $7,500.00. (The actual loss was $12,500.00, but recovery, of course, was limited to the amount of the insurance.) The application of the minority contention would have entitled the insured to: 25,000:12,500::7,500:X=$3,750; that is, sound value is to actual loss as the amount of insurance is to the amount recoverable.
The application of the rule suggested in the opinion of Justice Stabler would have entitled the insured to $4,500.00: 25,000:12,500::9,000:X=$4,500; or, which attains the same result: 9,000:4,500::9,000:X=$4,500; that is, sound value or agreed valuation is to actual loss or actual loss expressed in terms of the agreed valuation as the agreed valuation is to the amount recoverable, a deficiency of $3,000.00 in the amount recoverable under the majority rule, and an excess of $750.00 over the amount recoverable under the minority contention. The second term in the second proportion represents the actual loss, 12,500.00, expressed in terms of the agreed valuation, nine twenty-fifths of a dollar. If it should not be thus reduced and the rule suggested by Justice Stabler should be strictly followed, the proportion would appear in this abnormal shape: 9,000:12,500::9,000:X=$12,500. *Page 220 
In the Aiken case, the elements were:
Agreed value ........................................ $12,000.00
Sound value .........................................  10,500.00
Actual loss .........................................   8,500.00
Amount of insurance .................................   8,000.00

The application of the majority rule entitled the insured to $8,500.00, her actual loss, limited, of course, by the amount of insurance, $8,000.00
The application of the minority contention would have entitled the insured to $6,476.19: 10,500:8,500::8,000:X= $6,476.19; that is, sound value is to actual loss as the amount of insurance is to the amount recoverable.
The application of the rule suggested in the opinion of Justice Stabler would have entitled the insured to $9,714.28: 10,500:8,500::12,000:X=$9,714.28; or, what attains the same result: 12,000: 9,714.28::12,000:X=$9,714.28; that is, sound value or agreed valuation is to actual loss or actual loss expressed in terms of the agreed valuation as the agreed valuation is to the amount recoverable, an excess of $1,200.00 over the amount recoverable under the majority rule, and of $3,200.00 over the amount recoverable under the minority contention. The second term in the second proportion represents the actual loss, $8,500.00, expressed in terms of the agreed valuation, $1.142857 per dollar. If it should not be thus increased and the rule suggested by Justice Stabler should be strictly followed, the proportion would appear in this form: 12,000:8,500::12,000 :X=8,500; $500.00 more than the insurance, and, as in the other proportion, permitting the recovery of as much for a partial loss as for a total loss.
In my opinion, as stated, this Court should adopt either the indemnity rule or the valued policy rule and stick to it in all cases. It happens in some instances, as in the Columbia
case, that the actual loss exceeds the agreed valuation; there the actual loss was $12,500.00 and the agreed valuation was only $9,000.00, the amount of insurance being *Page 221 
$7,500.00. In that case the majority rule of indemnity was more favorable to the insured, for under its application the insured was allowed to recover the full amount of his insurance, as much as he would have recovered if the loss had been total, an obvious incongruity, as I construed it, in the face of the Statute which limited him to a proportionate
amount of the insurance. If that rule should be applied to the case at bar, the insured could receive not more than $2,000.00, his actual loss; and yet, where the loss exceeds the valuation, the majority rule is applied, giving the insured the full amount of his actual loss, while where conditions are reversed and the loss is less than the valuation, the indemnity rule is disregarded and the valued policy rule is applied in such a way as to give the insured $666.66 more than his actual loss.
Mr. Justice Stabler sustains the contention of the insured that the actual value of the building at the time of the fire, found by the appraisers to have been $3,000.00 and agreed to by counsel for the insured in the stipulation, and the actual loss, similarly fixed at $2,000.00, have nothing to do with the case, and eliminates them from consideration.
I think that the report of the appraisers displays a wonderfully accurate conception. They say:
"We find the value of the building as per policy (that is,the agreed valuation) $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."
It is manifest that if the sound value of the building was $3,000.00, and the agreed valuation was $4,000.00, every dollar of the $3,000.00 building was, by agreement, valued at $1.33 1/3; hence in stating the amount of the actual loss, $2,000.00, in conformity with the agreed valuation, the actual loss must be placed at 2,000 x $1.33 1/3 = $2,666.66.
Now, in determining the ratio between the value of the building and the loss, it is immaterial whether the sound *Page 222 
value be compared with the actual loss, or the agreed valuation be compared with the actual loss, stated in terms of the agreed valuation, thus: 3,000:2,000 = 66 2/3; 4,000: 2,666.66 = 66 2/3.
In either case, the loss is shown to have been two-thirds.
The finding of the appraisers and the stipulation of counsel that the sound value of the building was $3,000.00, and the actual loss, $2,000.00, cannot be eliminated without destroying the conclusive evidence that the appraisers, in stating previously that the loss was $2,666.66, meant to convert what they found the actual loss to have been, $2,000.00, into terms of the agreed valuation, and not as a flat finding that that was the amount of the actual loss.
The Statute provides:
"In case of total loss by fire, the insured shall be entitled to recover the full amount of insurance, and a proportionateamount (of the insurance) in case of partial loss."
In other words, if the loss should be 100 per cent. of the building, the insured should recover 100 per cent. of the insurance, regardless of the actual value of the building; if the loss should be partial, he should recover such percentage of the insurance as is the ratio between either the actual value and the actual loss, or between the agreed valuation and the actual loss expressed in terms of the agreed valuation. It cannot mean anything else.
Instead of following this, to me, perfectly plain mandate, Justice Stabler has found the ratio between the agreed valuation and the actual loss expressed in terms of the agreed valuation, and calculated that percentage upon the agreedvaluation, when the Statute requires it to be calculated upon the amount of the insurance.
The matter is sufficiently confused without the adoption of a formula differing materially from the majority rule and the minority contention.
I think that it is unfortunate that the law was enacted as it is. It is exceedingly questionable whether a valued *Page 223 
policy responds to the anticipated benefits, but that is a legislative and not a judicial matter. I may say, however, that if the policy of the State should continue in favor of a valued policy law, instead of the present limitation as to recovery in case of partial loss, it could readily be amended by providing that the insured should recover the full amount of his loss up to the amount of insurance and not limit him as the Statute does to a proportionate amount.
I think, therefore, that the judgment of this Court should be that the judgment of the Circuit Court be reversed, unless within 10 days after the filing of the remittitur the plaintiff remit upon the record all of the judgment in excess of $2,000.00, with interest; in that event, that the judgment so reduced be affirmed.