Altman v. Standard Mut. Life Ins. Co.

• Decision Date: 15 January 1944
• Docket Number: 15611.
• Citation: 28 S.E.2d 636,204 S.C. 151
• Parties: ALTMAN v. STANDARD MUT. LIFE INS. CO.
• Court: South Carolina Supreme Court

28 S.E.2d 636

204 S.C. 151

ALTMAN v. STANDARD MUT. LIFE INS. CO.

No. 15611.

Supreme Court of South Carolina

January 15, 1944

Willcox Hardee, Houck & Wallace, of Florence, for appellant.

McEachin & Townsend, of Florence, for respondent.

FISHBURNE Justice.

On March 7, 1940, the defendant, upon the written application of Mattie Marie Altman, delivered to her a policy insuring her life in the amount of $2,000. She died on September 6, 1942 after the policy had been in force and effect for a period of more than two years, from cancer, and it appears that she suffered from this physical ailment several years prior to the issuance of the policy.

Following the death of the insured, the defendant refused to pay the amount of the insurance, upon grounds hereinafter to be discussed, and this action was thereupon brought by the beneficiary, Maxie W. Altman, resulting in a verdict in his favor for the full amount of the policy.

The appellant defended upon the ground that at the time the policy was delivered to the insured, she was suffering from an incurable cancer, which fact she fraudulently concealed. The insurance company contends, therefore, that the contract of insurance never became effective; that it is not a matter of misrepresentation, but a question of whether any contract ever existed. This contention was raised upon trial, on motion for a directed verdict, which was overruled.

In the application, which formed a part of the policy contract, it was provided that if the insured were "not alive and in good health at the time of the delivery and acceptance of the policy *** I hereby forfeit any benefits *** and hereby authorize the secretary to cancel the policy."

The policy provides: "As a condition precedent to the taking effect of this policy, this policy must be manually delivered to the Insured while alive and in good and vigorous health and free from all bodily ailments and disease at the time of the delivery of the policy and acceptance thereof by the insured."

Appellant's motion for a directed verdict was made upon the ground that the undisputed testimony showed that the insured was not in good health on the date of the application or on the date of the issuance of the policy, it being a condition precedent to the taking effect of the policy that she should be in good health at the date of its delivery.

The insurance contract contained this provision with reference to incontestability: "This policy shall be incontestable after it has been continuously in force during the life time of the insured for a period of two years from its effective date, or the date of any reinstatement thereof except (1) for nonpayment of premiums ***."

Upon the trial, the trial Judge excluded testimony tending to prove that the insured was suffering from an incurable cancer when the policy was issued and delivered, basing his ruling upon the incontestable provision of the policy, and the statutory law, Section 7986 of the 1942 Code, which reads as follows: "All life insurance companies, fraternal benefit associations or any other company, corporation or association by whatever name known, who issues a policy or certificate of insurance on the life of a person shall, after a period of two (2) years from the date of such policy or certificate of insurance, be deemed and taken to have waived any right they may have had to dispute the truth of the application for insurance, or that the assured person had made false representations shall be deemed and taken to be true ***."

We have uniformly held that the defense of fraud and misrepresentation in the application is not...