Rabb v. New York Life Ins. Co.

• Decision Date: 20 September 1917
• Docket Number: 9808.
• Citation: 93 S.E. 711,108 S.C. 137
• Parties: RABB v. NEW YORK LIFE INS. CO.
• Court: South Carolina Supreme Court

93 S.E. 711

108 S.C. 137

RABB v. NEW YORK LIFE INS. CO.

No. 9808.

Supreme Court of South Carolina

September 20, 1917

Appeal from Common Pleas Circuit Court of Charleston County; Edward McIver, Special Judge.

Action by Elva M. Rabb, as administratrix, against the New York Life Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed.

Mordecai & Gadsden & Rutledge, of Charleston, for appellant.

Hagood & Rivers, of Charleston, for respondent.

HYDRICK J.

Defendant appeals from judgment for plaintiff on two policies insuring the life of plaintiff's intestate. The defense was that the policies lapsed on August 30, 1913, for nonpayment of the quarterly premiums due July 30, 1913, 30 days grace being allowed by the policies for payment of premiums.

Plaintiff relied on waiver of the forfeiture by the acceptance of the premiums by J. W. Burmester, defendant's local soliciting agent, on October 16, 1913, the day before insured died, and while he was sick and the giving of his receipt therefor. This receipt was admitted over defendant's objection.

In his application, which was made part of the contracts, insured agreed "that the agent taking this application has no authority to make, modify, or discharge contracts, or to waive any of the company's rights or requirements." The policies contained stipulations to the same effect, and provided that "all premiums are payable on or before the date due, at the home office of the company, or to an agent of the company upon delivery of a receipt signed by the president, a vice president, a second vice president, a secretary or the treasurer of the company, and countersigned by said agent"; and that, "at any time after any default, upon written application by the insured and upon presentation at the home office of evidence of insurability satisfactory to the company, this policy may be reinstated, upon payment of arrears of premiums with interest thereon at the rate of five per centum per annum."

On July 3, 1913, the company's regular premium notices, one for each policy, were mailed to the insured, notifying him that the premiums would be due on July 30, 1913, and that payment must be made at the home office in New York, or to the company's branch office in Savannah, Ga. Thereafter, on the 8th, 15th, and 22d of August, the cashier of defendant's branch office in Savannah mailed to the insured letters calling his attention to the nonpayment of the premiums due July 30th, and notifying him that the time of grace would expire on August 30th; and, on August 30th mailed him a notice that the policies lapsed on that date for nonpayment of premiums.

Mr Burmester testified that on October 16th a Mr. Hughes, who was his nephew and a friend of the family of the insured came to his office, and brought the notices of premium to become due on October 30th, and paid him $72.66, for which he gave the receipt; that he told Mr. Hughes, at the time, that his receipt was absolutely "no good," because he had no authority to receive money or to give receipts therefor on behalf of the company; but he gave the receipt because Mr. Hughes insisted on his doing so, saying that he wanted it to show to Mr. Fleming, a brother-in-law of Mr Rabb, that he had paid the money; that he (Burmester) had solicited the policies and had taken Rabb's application therefor, and had paid to the company the first premium for Rabb on his promise to repay him later, and had kept the policies in his possession until October 16th, when he delivered them to Mr. Hughes; that, when Hughes came to his office to pay the money, he knew and told witness that Mr. Rabb was then sick (he died the next day), and Mr. Hughes asked him if the policies were in force, and witness replied that he hoped they were, but "we would have to see later." The uncontradicted evidence showed that Burmester had no authority, real or apparent, to receive the renewal premiums or to waive the forfeiture.

Defendant moved for a directed verdict on the ground that the uncontradicted evidence showed that the policies had lapsed and that there was no evidence of waiver. The court refused the motion and submitted the issue of waiver to the jury, and charged them, in effect, that, although the insurer and insured had expressly agreed, and so stipulated in their contract, that the soliciting agent had no authority to receive and receipt for renewal premiums, or to waive a forfeiture for nonpayment thereof, nevertheless the statute (sections 2712, Civil Code 1912) operated upon the contract so as to annul that provision, and impose liability upon the company for the act of the agent, notwithstanding he had no authority to do the act to the knowledge of the insured.

To ascertain the legislative intent, we may consider the original statute from which the section in question was taken, which shows clearly that the Legislature intended thereby to regulate the conduct of insurance agents, and persons who assumed to act as such, with regard to their relation to the state and the public, as well as the companies they represent; and,...