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S.C. ELEC. & GAS CO. v. AETNA LIFE INS. CO.

December 12, 1956

SOUTH CAROLINA ELECTRIC & GAS COMPANY, RESPONDENT,
v.
AETNA LIFE INSURANCE COMPANY, ET AL., APPELLANTS.



The opinion of the court was delivered by: Legge, Justice.

December 12, 1956.

By separate policies Aetna Life Insurance Company and thirty-seven other insurance companies covered all of the real and personal property of South Carolina Electric & Gas Company against loss or damage by fire, liability under each policy being limited to the proportion of any such loss or damage that the amount of the policy should bear to the total coverage. Plaintiff brought this action against said companies, alleging that as the result of a fire on June 27, 1950, that had damaged and partially destroyed a Westinghouse generator belonging to it and located in its Saluda hydro-electric station in Lexington County it had sustained loss within the coverage of said policies in the amount of $132,181.95, and that the several defendants had denied liability; and praying judgment against them in that amount with interest from July 27, 1950, said amount and interest to be apportioned among them in accordance with the coverage of the respective policies.

Defendants, answering, alleged inter alia:

1. That the damage to the generator was not within the coverage of their policies, but was caused by mechanical breakdown or electrical injury;

2. That prior to the electrical or mechanical failure of June 27, 1950, the generator had been operated in a defective condition of which plaintiff knew or should have known, and that such operation greatly increased the hazard of damage and consequently relieved defendants from liability because of the provision in each policy that "this company shall not be liable for loss occurring while the hazard is increased by any means within the control or knowledge of the insured"; and

3. Upon information and belief, that the real party in interest in the action is not the plaintiff, but The Underwriters at Lloyd's, an English organization, which has paid the plaintiff on account of the loss here complained of and is in reality the beneficiary of the action.

Two motions were thereafter made by certain of the defendants and argued before the Honorable Joseph R. Moss, then presiding in the Eleventh Judicial Circuit, to wit:

a. To require plaintiff to reply to the new matter alleged in the answer; and

b. "For an order requiring the plaintiff to permit these defendants to inspect and copy, or in the alternative to furnish these defendants with authentic copies of such books, records, papers, correspondence and documents in its possession or under its control relating to the matters referred to hereinbelow.

1. The records showing the cost of the portions of the Westinghouse generator alleged in paragraph four of the complaint as damaged, the year in which this equipment was purchased, the depreciation rate charged on this equipment, the amount of the accumulated depreciation and the net investment of the plaintiff in this equipment on the date of the alleged damage.

2. All policies of insurance covering this damaged equipment issued by companies other than the named defendants.

3. All records of payments received by the plaintiff on account of damage to the equipment mentioned in the complaint, including the records showing the name of the parties making payment, the dates, the amounts of the payments, and the circumstances surrounding these payments.

4. All correspondence, documents and papers relating to any payments made to the plaintiff or to the liability of any party making such payments."

At the hearing of these motions plaintiff attached to its brief a copy of its policy with Lloyd's and a copy of a "loan receipt" given by it to Lloyd's under date January 26, 1953. To both of these we shall later refer in more detail. On November 30, 1954, Judge Moss issued his order requiring plaintiff to reply to the new matter set out in the answer, and further ordering "that within ten days from the date of this order the plaintiff permit these defendants to inspect and copy or, in the alternative, furnish them with authentic copies of the books, records, papers, correspondence and ...


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