Cain v. United Ins. Co.

• Decision Date: 05 March 1958
• Docket Number: No. 17397,17397
• Parties: Janie M. CAIN, Appellant, v. UNITED INSURANCE COMPANY, Respondent.
• Court: South Carolina Supreme Court

Page 360

102 S.E.2d 360

232 S.C. 397

Janie M. CAIN, Appellant, v. UNITED INSURANCE COMPANY, Respondent.

No. 17397.

Supreme Court of South Carolina.

March 5, 1958.

James Hugh McFaddin, Manning, for appellant.

John G. Dinkins, Manning, for respondent.

OXNER, Justice.

On March 9, 1953, the United Insurance Company issued a policy insuring the life of Thomas J. Cain for $240 in which his wife, Janie M. Cain, was designated as the beneficiary. The insured died on July 19, 1953. The Company denied liability upon the ground that the policy was procured by fraudulent misrepresentations. Thereafter this action was brought by the beneficiary to recover actual and punitive damages for an alleged fraudulent breach of the insurance contract. The trial resulted in a verdict for plaintiff for $240 actual damages and $1,750 punitive damages. The presiding Judge later concluded that he erred in not granted defendant's motion for a directed verdict upon the ground that the policy was obtained by false representations in the application. He accordingly set aside the verdict of the jury and directed that judgment be entered in favor of the defendant.

The application for the policy was taken by two agents for the Company at the home of the insured on March 4, 1953. The questions were read to the insured by one of the agents and answers inserted as given by him. After the application was completed, the insured instructed his daughter, Gwendolyn, to sign his name to it.

The Company contends that the answers to the following questions were false and made with intent to deceive:

'8. Are you in good health?

'Yes.

'9. How many times have you been confined to the house or hospital by sickness, disabled by accident or received medical, surgical or clinic treatment within the past two years? (State dates and nature of disability.)

'None.'

The policy was issued without medical examination in reliance upon the information given in the application. About four and a half months later insured died in Columbia at the Veterans Hospital. In due course proof of death was filed by the beneficiary. Included was a statement by Dr. Robert W. Houseal, Chief, Professional Services at the Veterans Hospital, which gave as the cause of death 'cerebral hemorrhage due to hypertensive cardiovascular disease.' The medical history in this statement further disclosed that insured was admitted to the Veterans Hospital on September 17, 1952, and discharged November 8, 1952, receiving treatment for disease of the heart, and was also confined in the same hospital for heart disease from March 29, 1951 to April 13, 1951.

Upon receipt of the foregoing information, the manager of the district office at Florence promptly instructed the agent to deny liability and refund the premiums. In accordance with this instruction, the agent called at the Cain home on October 14, 1953 and refunded all premiums paid, amounting to $10, to the beneficiary's daughter, Gwendolyn Cain, then about 25 years of age, and the person who usually paid the premiums on this and other policies which the Company carried on various members of the Cain family. The beneficiary is a school teacher and was rarely at home when the agent called.

There is no evidence that when the Company issued this policy it had any knowledge or reason to believe that the insured had heart trouble or had ever been confined in the Veterans Hospital for this or any other disease. It is also clear that the application would not have been accepted had the true facts been disclosed. The only reasonable...