Ramey v. Carolina Life Ins. Co.

• Citation: 244 S.C. 16,135 S.E.2d 362
• Decision Date: 11 March 1964
• Docket Number: No. 18181,18181
• Court: United States State Supreme Court of South Carolina
• Parties: , 9 A.L.R.3d 1164 Jonah Harold RAMEY, Respondent, v. CAROLINA LIFE INSURANCE COMPANY, Appellant.

Page 362

135 S.E.2d 362

244 S.C. 16, 9 A.L.R.3d 1164

Jonah Harold RAMEY, Respondent, v. CAROLINA LIFE INSURANCE COMPANY, Appellant.

No. 18181.

Supreme Court of South Carolina.

March 11, 1964.

Haynsworth, Perry, Bryant, Marion & Johnstone, Greenville, Turner, Padget & Graham, Columbia, for appellant.

Leatherwood, Walker, Todd & Mann, J. G. Leatherwood, Harold N. Morris, Greenville, for respondent.

PER CURIAM:

This is an appeal from an order of the lower court, herewith reported, overruling the demurrer of the defendant- appellant to the complaint of the plaintiff-respondent, it being contended, on several grounds, that said complaint failed to state a cause of action

We have studied the record in this case, and find ourselves in agreement with the result of the order of the Circuit Judge.

Affirmed.

The order of Judge Eppes follows:

The Complaint of the Plaintiff alleges that he received injuries of a most serious nature when poisoned by arsenic given to him by his wife in an attempt by her to take his life so that she could collect the $5,000.00 benefits of an insurance policy placed in force by the Defendant company upon the life of the Plaintiff without his knowledge or consent. It is further alleged that the purported signature of Plaintiff on both the application and inspection for life insurance forms was a forgery, and was known by Defendant to be a forgery, but despite such knowledge and despite Plaintiff's lack of consent or knowledge, Defendant negligently, wilfully and unlawfully placed in force and effect the aforementioned policy of insurance on Plaintiff's life; an action which is alleged to be against the public policy of this State, against the rules of the company and conductive to crime and great danger to the Plaintiff. Finally Plaintiff alleges that by reason of the negligent, wilful and wrongful issuance of such insurance his wife did poison him with the hope of collecting the proceeds of the policy.

Defendant has demurred to the Complaint on five grounds. Grounds (a) and (b) are based upon the contention that the Complaint shows on its face that the Plaintiff's wife had an insurable interest in him and thus the contract issued was not a speculative or wagering contract and there was no breach of duty by Defendant to the Plaintiff. Grounds (c) and (d) raise the question of proximate cause, contending that the proximate cause of Plaintiff's injuries was the criminal act of his wife in poisoning him which was not reasonably foreseeable by Defendant. Finally in Ground (e), Defendant contends the Complaint fails to allege any actionable negligence on the part of Defendant, its agents or servants in the scope of their employment.

The matter was argued fully before me by counsel for Defendant and Plaintiff, Defendant being represented by Mr. Harold Graham of the Columbia Bar and Mr. Andrew Marion of the Greenville Bar and Plaintiff being represented by Mr. J. G. Leatherwood and Mr. J. D. Todd, Jr. of the Greenville Bar. Various citations of authorities were furnished the Court, all of which have been carefully considered and after study and deliberation, I am of the opinion that the Demurrer of Defendant should be overruled.

As a general rule, a wife has an insurable interest in the life of her husband. Crosswell v. Connecticut Indemnity Association, 51 S.C. 103, 28 S.E. 200. This, however, is not invariably so. Moseley v. American National Insurance Co., 167 S.C. 112, 166 S.E. 94. There, a son attempted to insure the life of his father without the father's knowledge or consent. In holding such an arrangement illegal, void and against public policy, our Supreme Court said:

'In Joyce on Insurance (2d Ed.) § 892, it is said: 'A person can have no insurable interest where his only right arises under a contract which he had no authority to make.'

'Under the law of this state, a child has an insurable interest in the life of the parent, but in the present case the claim of the son is not based upon the general provisions of thue law, but upon a receipt, called a contract. * * * That the son was not acting as the agent of his father is perfectly apparent from the admitted fact that the father knew nothing of the transaction. An insurable interest is in the nature of an inchoate right, everpresent for perfection in those who possess the right, but never perfected until all legal requirements have beenb performed. (Emphasis added).

'This appeal presents a typical case of an effort to obtain insurance upon the life of another without the knowledge or consent of the insured. Quoting again from Joyce, § 2509D: 'It has been broadly stated that insurance taken out on the life of another, without the latter's consent, is against, public policy and void.'

'This doctrine is sustained by the citation of authorities from other states. A Kentucky case, Metropolitan Life Insurance Company v. Monohan, 102 Ky. 13, 42 S.W. 924, appears to be in point. This case holds that it is against public policy to procure insurance on the life of another without his knowledge or consent, even though the insurance was procured by one having an insurable interest in the life of the insured.

'The basis for holding such contracts of insurance to be against public policy is grounded upon the law prohibiting wagering contracts. This is treated in our own case of Crosswell v. Conn[ecticut] Indemnity Association, 51 S.C. 103, 28 S.E. 200, 201. Quoting further from the Crosswell Case we find the following:

"There seems to be a clear distinction between cases in which the policy is procured by the insured bona fide on his own motion and cases in which it is procured by another. It is a very different thing for a man to create voluntarily an interest in his termination and to allow some one else to do so at their will."

Hack v. Metz, 173 S.E. 413, 176 S.E. 314, 95 A.L.R. 196, is to the same effect.

Where, as here, it is alleged that the wife procured the insurance on the life of her husband without his knowledge or consent, the Court cannot hold as a matter of law that the wife has an insurance interest, and this is especially so when it appears, as it does here, that the insurance company knew of this lack of knowledge or consent.

Plaintiff's cause of action is based upon negligence on the part of Defendant in issuing a policy of insurance on the life of the Plaintiff without his knowledge and consent when Defendant had reason to know such policy was procured without his knowledge or consent. It seems to be well settled that such insurance is void and against public policy. Moseley v. American National Insurance Company, supra.

Also see Hack v. Metz, supra, where it is stated:

'From the same authority [Joyce on Insurance (2d Ed.)] § 2905D, we quote: 'It has been broadly stated that insurance taken out on the life of another, without the latter's consent is against public policy and void."

In Holloman v. Life Ins. Co. of Va., 192 S.C. 454, 7 S.E.2d 169, 127 A.L.R. 110, our Court states:

'While the point does not appear to have ever come before this court, the authorities generally are to the effect that except in the case of an infant a policy of life insurance taken out without the knowledge or consent of the insured person is not enforceable; at least in the absence of waiver or estoppel.'

At 29 Am.Jur. 617, Ins. Section 231, the following is found:

'It is a general rule that a policy of life insurance taken out without the knowledge or consent of the insured person is against public policy and unenforceable. A wife, for example, cannot be permitted to obtain insurance on the life of her husband without his knowledge and consent; such a practice, it has been deemed, might be a fruitful source of crime.' (Emphasis added)

The law thus seems to be well recognized in this State that a policy of insurance taken out on the life of another without his knowledge or consent is void and against public policy in that it might be a fruitful source of crime. Therefore, if the allegations of the Complaint are true and on Demurrer they must be taken as true, the Defendant company knowingly issued a policy of insurance on the life of Plaintiff which was void, contrary to public policy, and which might lead to an attempt upon his life.

Defendant does not contest the law as set forth above but contends that such a set of circumstances does not give rise to a cause of action in tort for damages alleged to have been sustained by Plaintiff as a result of the issuance of such policy. It cites as authority for this contention Holloman v. Life Ins. Co. of Va., supra. That case does not support Defendant's position. It is true that the Court there said:

'We have not found any authority, however, for the view that the issuance of a policy of life insurance without the consent of the insured would give rise to a cause of action in tort in favor of the insured person.'

Then the opinion continues with the real reason for the holding of the Court:

'But even if this might be true under some exceptional circumstances, we find nothing in the complaint here from which damages to the plaintiff could...