Able v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 09 March 1938
• Docket Number: 14636.
• Citation: 195 S.E. 652,186 S.C. 381
• Parties: ABLE v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES et al.
• Court: South Carolina Supreme Court

195 S.E. 652

186 S.C. 381

ABLE v. EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES et al.

No. 14636.

Supreme Court of South Carolina

March 9, 1938

Appeal from Richland County Court; A. W. Holman, Judge.

Action by Henry Able against the Standard Oil Company of New Jersey and another, founded on an alleged fraud practiced upon plaintiff, a former employee of defendant, in obtaining plaintiff's signature to an agreement whereby certain disability benefits under an insurance policy were waived. Judgment for plaintiff, and defendants appeal.

Reversed and remanded, with directions.

Thomas Lumpkin & Cain and Benet, Shand & McGowan, all of Columbia for appellants.

D. M Winter and U. L. Rast, both of Columbia, for respondent.

BONHAM Justice.

Since the parties in the record style themselves plaintiff and defendants-the one plaintiff-respondent, the others defendants-appellants-it will simplify matters if we designate them plaintiff and defendants in this opinion.

The action is founded upon allegations of fraud and deceit practiced on the plaintiff by the defendants.

The burden of the complaint is: That plaintiff was more than twenty years in the employ of the defendant Standard Oil Company at Columbia. In accordance with its custom, this defendant carried a plan of insurance whereby its employees were insured for life and against sickness, disability, and permanent and total disability. About 1932 this defendant changed its plan of insurance on its employees, and entered into an agreement with its codefendant, the Equitable Life Assurance Society, for insurance on its employees, and pursuant to that agreement an insurance certificate was issued by the insurance company to the plaintiff, which certificate embodied the contract between the plaintiff and the insurance company. (Italics ours.)

That the said plan was effected for the benefit of Standard Oil Company, for the purpose of relieving it from its insurance liability to its employees, including this plaintiff. That deductions from the wages of plaintiff were taken by the defendant Standard Oil Company to pay the premiums on his insurance. That plaintiff's certificate, which remained in his possession unchanged, was in the sum of $2,000 and continued to be in full force and effect. About July, 1934, the defendants obtained plaintiff's signature to a paper purporting to be an agreement waiving disability benefits under the contract of insurance, and consenting to changes therein, but plaintiff has no knowledge of signing an instrument of this nature, and his signature thereto was obtained by fraudulent and deceptive means and by overreaching and coercing plaintiff to sign the same, and he had no knowledge of the contents thereof, and there was no consideration therefor. That the acts of defendants hereabout "were deliberate, intentional, fraudulent and unlawful, and parts of a design, plan and scheme to cheat, swindle, defraud, rob and chisel plaintiff out of his rights, protection, privileges, advantages and other vested interests in and under said policy." The demand is for $3,000 damages, actual and punitive.

The answer of the insurance company admits its corporate capacity; alleges that it has no knowledge nor information as to the things alleged in paragraph 2 of the complaint; therefore denies them. Answering paragraph 3, it admits that it issued and delivered to Standard Oil Company its group policy of insurance No. 3714, dated January 1, 1932, whereby it agreed to insure the lives of all the employees of said company who shall have made written application therefor, and such group policy was issued, delivered, and accepted subject to the terms and conditions thereof; that pursuant to application it issued its individual certificate, as provided for in group policy No. 3714, S.C. 145, in the sum of $2,000, dated January 1, 1932, to the plaintiff herein; that said certificate was delivered to and accepted by him subject in all respects to the terms, conditions, and limitations thereof, as well as to the terms, conditions, and limitations of the group policy. Defendant admits that the said certificate and group policy provided for the payment to plaintiff of certain benefits if he became disabled within the times, definitions, and provisions of said certificate and group policy, and gave notice thereof within the time and in the manner provided for in such certificate and group policy; defendant craves reference to the original certificate and group policy. That the amount of the certificate was, in the exercise of the right reserved therein, reduced as of July 1, 1933, from $2,000 to $1,000, pursuant to the request and instructions from said Standard Oil Company; that as of July 1, 1934, the amount of said certificate was increased from $1,000 to $2,000, but the certificate issued to evidence the insurance thus granted did not contain total and permanent disability benefit provisions, and the certificate terminated as of July 31, 1935, when the plaintiff ceased to be in the employ of Standard Oil Company. It denies the allegations contained in paragraph 4, and, for answer, alleges that effective July 1, 1934, the group policy of insurance was amended so as to eliminate the disability benefit provision thereof as contained in the certificates issued thereunder, including that issued to plaintiff; and on July 7, the plaintiff executed an instrument in writing acknowledging the receipt of a booklet containing the group life insurance plan of Standard Oil Company (of New Jersey), as amended, effective July 1, 1934, to provide, among other things, for the elimination of the total and permanent disability benefit provisions thereof, and agreed that said acknowledgment shall constitute his acceptance of the terms of such amended plan. Further, that the amendment to the group policy and the certificate thereunder was made in accordance with the rights therein reserved, and that plaintiff freely, voluntarily, and of his own volition, with full knowledge of all facts, acknowledged and agreed to such amendment. Denies specifically that either of the defendants induced the execution of said acknowledgment by fraudulent or deceptive practices.

Denies each and every allegation of the complaint not above admitted.

Denies upon information and belief that, even if plaintiff is now totally and permanently disabled, such disability did not have its onset until long after the termination and cancellation of the disability provisions contained in the group policy and certificate of insurance, and, further, that plaintiff gave no notice of such alleged disability, nor furnished any proofs thereof until more than one year after the alleged onset of such disability, and the cancellation of the disability benefit provisions. Denies that plaintiff while in the employ of Standard Oil Company, and while said certificate was in force, was so disabled by bodily injury or disease as to entitle him to the payment of any sum by this defendant.

For a second defense: that heretofore plaintiff brought action in the county court for Richland county against this defendant to recover for total and permanent disability, claiming under the certificate of insurance upon which the present action is founded. That on the trial of that case he admitted the execution and delivery of the instrument acknowledging and acquiescing in the elimination of the total and permanent disability provisions from his certificate. He thereupon moved the court for a voluntary nonsuit, which motion was granted. That the costs of that suit were taxed against plaintiff and have not been paid. This defendant pleads that the failure of plaintiff to pay these costs estops him from further prosecuting this action against it, and is a bar to his action against it.

The defendant Standard Oil Company, for answer, says: It admits paragraph 1, and so much of paragraph 2 of the complaint as alleges that plaintiff was employed by it for a period of more than twenty years; admits that in the year 1932 it entered into a contract with the defendant Equitable Life Assurance Society for the insurance of its employees, pursuant to which a certificate was issued to this plaintiff by said society. Defendant demands the production of said certificate and the amendments thereto for the terms of the contract between plaintiff and Equitable Life Assurance Society. Defendant denies that said insurance was taken out for the benefit of this defendant, and to relieve it of any insurance liability to its employees, but, on the contrary, alleges that said insurance was taken out for the benefit of its employees, and while said employees, including this plaintiff, paid a part of the premium for this insurance, this defendant paid a part thereof, which premiums were paid to the society for the issuance of the said insurance, and for which this defendant received no benefit other than the insurance of its employees.

Answering paragraph 4, defendant admits that in July, 1934, the plaintiff signed an instrument in writing waiving disability benefits under the contract of insurance and consenting to certain changes therein; but denies that said signature of the plaintiff was obtained by any fraud or overreaching, but alleges that it was signed by the plaintiff with full knowledge of its contents. Defendant further denies that said changes were made without consideration to the plaintiff, and denies that plaintiff was at that time, or any other time, entitled to any disability benefits under said policy of insurance.

Answering paragraph 5, defendant denies that changes made in the policy were without the knowledge and consent of plaintiff, but alleges that plaintiff was fully informed thereof; and that such changes as were made, were made...