Batchelor v. American Health Ins. Co.

• Citation: 107 S.E.2d 36,234 S.C. 103
• Decision Date: 05 February 1959
• Docket Number: No. 17496,17496
• Parties: Thurman BATCHELOR, Appellant, v. AMERICAN HEALTH INSURANCE COMPANY, Respondent.
• Court: South Carolina Supreme Court

Page 36

107 S.E.2d 36

234 S.C. 103

Thurman BATCHELOR, Appellant, v. AMERICAN HEALTH INSURANCE COMPANY, Respondent.

No. 17496.

Supreme Court of South Carolina.

Feb. 5, 1959.

Rogers W. Kirven, Florence, for appellant.

Willcox, Hardee, Houck & Palmer, W. Laurier O'Farrell, Florence, for respondent.

MOSS, Justice.

American Health Insurance Company, the respondent herein, did, on April 9, 1957, issue and deliver to Thurman W. Batchelor, the appellant herein, a 'Hospital Expense Policy' by the terms of which it agreed to insure the appellant against hospital and doctor expenses, within the limitations of the policy, incurred as a result of an accident. The complaint alleges that while the policy was in force and effect, the appellant, on April 29, 1957, while riding in a private automobile, was injured, causing hospital and doctor expenses in the amount of $1,077.21. It is alleged that the appellant is entitled to recover under the terms of the aforesaid policy the sum of $1,000.

The respondent, by its amended answer, admitted the execution and delivery of the aforesaid policy. It defended on the ground that the appellant had made false representations in his application to the respondent in answers to questions concerning other insurance. The respondent also alleged that the appellant had obtained numerous other policies of hospital insurance, which together would provide benefits in an amount greatly in excess of his earnings, thereby making it profitable for the appellant to become hospitalized. The respondent also asserts that the obtaining of this and numerous other policies constitutes a wagering contract and was contrary to public policy. The respondent made tender of the premiums and prayed judgment for the rescission of the policy contract.

This action was tried before the Honorable W. T. McGowan, Jr., Presiding Judge of the Florence County Court and a jury, at the 1958 May term of said Court, and resulted in a directed verdict in favor of the respondent on the ground that the obtaining of the policy involved in this action, and the other policies, constitutes a wagering contract, and that such was contrary to the public policy of this State. The appellant made an unsuccessful motion for a new trial. The case is before this Court upon due notice of intention to appeal. The exceptions of the appellant challenges the ruling of the trial Judge, and asserts that there was error in directing the verdict for the respondent on the ground that when the appellant obtained this, and other hospital insurance policies, that such constitutes a scheme or venture to enter into wagering contracts, which was contrary to public policy.

The testimony shows that the appellant had a gross weekly income of $65 and take home pay of $53 from his employment with Armour & Company. The testimony shows that in June 1952, upon application of the mother of the appellant, a family group hospital and surgical expense policy was issued by the Reserve Life Insurance Company. In January 1954, John Hancock Mutual Life Insurance Company also issued upon application of Armour & Company, the employer of the appellant, without expense to him, a hospital expense and surgical operation policy. It also appears that between March 25, 1957 and May 1, 1957, the appellant purchased eight other policies covering either hospital and surgical expenses or hospital expenses only. The respondent asserts that a calculation of the benefits provided by the various policies shows that if the appellant was hospitalized he would receive approximately the sum of $745 per week, plus additional benefits for certain medical and hospital charges. It also asserts that since there is such a great disproportion between the amount that could be recovered under the various contracts of insurance and the loss which could be sustained, that the only reasonable inference to be drawn therefrom is that the appellant was engaged in a scheme or venture which made of all the insurance agreements wagering contracts and that such were void as being against public policy.

It appears from the testimony that L. C. Whitlock, an agent of the respondent, contacted the appellant and sold him the policy in question. It appears from the testimony of this agent that he solicited the appellant upon the suggestion of one Gerald Windham, who was an agent for Interstate Life Insurance Company, and who had also sold the appellant a hospital policy. This agent testified that the appellant told him that he had hospital insurance with John Hancock Insurance Company, this being the policy issued upon application of Armour & Company. The appellant testified of his conversation with the agent of the respondent when he was solicited for the policy here in question:

'Q. Tell what further conversation you had with Mr. Whitlock at that time? A. Well, I told him I didn't need any insurance that I had all the insurance I needed, and he says, he told me I never could have too much insurance, he said that if you have an accident or something who would pay your bills when you were laid out of work, so we discussed the insurance and I told him I had several other policies, and also had a group policy where I worked and he asked me who I had the group with and I told him I had it with John Hancock, and he said he was going to write it up and for me to give him a $5.00 deposit and if he could get it through he would bring the policy back to me.

'Q. Now, you told him you had other insurance other than the John Hancock insurance? A. Yes, sir; I told hom I had several other policies.

'Q. He knew that Gerald Windham had sold you the Interstate, didn't he? A. He said Gerald told him he had already sold me a policy.'

This court has held that everyone has an insurable interest in his own life. Ellison v. Independent Life & Accident Ins. Co., 216 S.C. 475, 58 S.E.2d 890, 29 Am.Jur., Insurance, para. 355, at page 312. Hence, the appellant in this case had a right to insure himself against such hospital, medical and aurgical expenses as he might incur in the event of injury. The respondent, in its brief, admits that no individual policy, standing alone, would be considered a wagering contract, but it asserts that when a series of policies are obtained in a very short time, which together provide benefits grossly out of proportion to the risk involved, a scheme or plan to engage in a wagering or gambling venture becomes apparent.

In Weeks v. New York Life Ins. Co., 128 S.C. 223, 122 S.E. 586, 587, 35 A.L.R. 1482, this Court said:

'Public policy has been aptly described by one of our judges as 'a wide domain of shifting sands.' Gage, J., in McKendree v. Southern State Life Insurance Co., 112 S.C. 335, 99 S.E. 806. The term in itself imports something that is uncertain and fluctuating, varying, with the changing economic needs, social customs, and moral aspirations of a people. Story on Contracts (5th Ed.) [(3)], 675; 23 A. & E. Ency. (2d Ed.), 456. For that reason it has frequently been said that the expressive (expression) public policy is not susceptible of exact definition. But for purposes of juridical application it may be regarded as well settled that a state has no public policy, properly cognizable by the courts, which is not derived or derivable by clear implication from the established law of the state, as found in its Constitution, statutes, and judicial decisions.'

In the case of Grant v. Butt, 198 S.C. 298, 17 S.E.2d 689, 693, this Court adopted as its judgment an order of the Special Circuit Judge, who was the Honorable George Bell Timmerman, now a distinguished United States District Judge, and approved the following pronouncement:

'It seems to be well established in this State that contracts having for their object anything that is obnoxious to the principles of the common law, or contrary to statutory enactments or constitutional...