Cooley v. Metropolitan Life Ins. Co.

• Citation: 150 S.E. 793,153 S.C. 280
• Decision Date: 12 December 1929
• Docket Number: 12783.
• Parties: COOLEY v. METROPOLITAN LIFE INS. CO.
• Court: United States State Supreme Court of South Carolina

150 S.E. 793

153 S.C. 280

COOLEY v. METROPOLITAN LIFE INS. CO.

No. 12783.

Supreme Court of South Carolina

December 12, 1929

Appeal from Common Pleas Circuit Court of Anderson County; W.H Townsend, Judge.

Action by Mamie Cooley against the Metropolitan Life Insurance Company. Judgment for defendant, and plaintiff appeals. Affirmed.

The exceptions ordered to be reported are as follows:

"I. Error of the court in directing a verdict for the defendant insurance company when the evidence was undisputed that the company waived medical examination, and issued the policy on the representations of insured and the inspection of their agent. It is respectfully submitted that a waiver of medical examination waived all that such examination would have revealed except fraudulent misrepresentations of material facts known to insured, and it is highly unjust to waive the examination and yet rely upon facts that only an examination could reveal.

"II. Error of the court in refusing to direct a verdict for the plaintiff for $500.00 and interest, after holding that insured did not know she had cancer and conceding that no fraud was practiced on insurance company. It is submitted that sound health is a matter of opinion and honestly expressed should not be the ground for forfeiture.

"III. Error in refusing to submit the case to the jury on the question of waiver or of sound health of the person procuring the insurance. It is conceded that it required a medical expert to know that insured had cancer, and when the company waived such expert examination they ought not to be permitted to rely upon a condition that both the contracting parties knew nothing about.

"IV. Error of the court in directing a verdict on the ground of the non delivery of policy when this was not contested either in the pleadings or the evidence. The answer admits execution and delivery of the policy and the company has never denied that it was issued and delivered."

Leon L. Rice, of Anderson, for appellant.

Watkins & Prince, of Anderson, and Haynsworth & Haynsworth, of Greenville, for respondent.

COTHRAN J.

This is an action upon a policy of insurance in the sum of $500, alleged in the complaint and admitted in the answer to have been issued by the company and delivered to the insured, on March 1, 1928, upon the life of Emma Smith, and payable, in the event of her death, to her daughter, the plaintiff Mamie Cooley.

The defense of the company was that at the time of the application, and at the time of the payment of the premium, and at the time of the issuance and delivery of the policy, the insured was suffering from a malignant cancer, for which she had been treated constantly by physicians for at least ten months prior thereto, and from which she died in less than ten days thereafter.

The testimony abundantly established the following facts which appear in the statement of facts in the transcript of record, admitted on all sides:

During the spring and summer of 1927, nearly a year before the date of the policy, March 1, 1928, the insured was living at Belton, S.C. In May, 1927, she consulted Dr. Young at Anderson. He diagnosed her ailment as cancer, but did not communicate his opinion to her. At Dr. Young's suggestion, she was examined by Dr. Wrenn, an X-ray specialist, who reached the same diagnosis, but who, like Dr. Young, did not disclose it to Mrs. Smith. He found that the disease had made such headway that a cure was impossible. This was nearly a year before the date of the policy. The fact that neither physician acquainted Mrs. Smith with the fatal nature of her disease could not alter the fact that ten months before her application she was suffering from cancer. During the remainder of the year she made constant visits to the hospital at Anderson for treatment. In the fall she moved from Belton to Williamston, which is only a few miles from Pelzer. Dr. Martin of Pelzer was called in at some time in January, 1928, a little more than a month before the date of her application for insurance. He diagnosed her trouble as cancer, and, like the other physicians who did not care to add the certainty of impending death to her physical suffering, withheld the information from her. She became ill on March 2d, the day after the date of the policy, and died on the 9th, a week later, unquestionably of cancer. Proofs of death were forwarded to the company. They disclosed the cause of her death as cancer. The company promptly declared the policy void, denied liability, and tendered a return of the premium which had been paid. This was declined.

After the testimony was all in, each side moved for a directed verdict; the plaintiff for the full amount of the policy with interest; the defendant for a verdict in favor of the plaintiff for the amount of the premium paid with interest. His honor, Judge Townsend, granted the defendant's motion, ruling as follows:

"This receipt states the contract between the parties, made at the time of the application for the insurance, and bases the right of the plaintiff to recover upon the condition that Mrs. Emma Smith, the insured, was in sound health at the time the application was made. Now, it appears from the uncontradicted evidence in this case that Mrs. Smith died before the Policy was delivered and within less than a month after the application was made for the policy, from cancer, a disease which existed at the time the application was made and was then in an advanced stage, although its existence at that time and up to the time of her death was unknown both to her and to the insurance company. This being the only conclusion that can reasonably be drawn from the uncontradicted evidence, it seems to me that there is no question to submit to the jury, but that it is my duty to direct you to find a verdict in favor of the defendant.

"The direction of a verdict, it seems to me, is also proper in favor of the plaintiff, only, for the return of the amount of the premium which had been paid to the Company at the time of the application. This conclusion is strengthened by the conditions in the Policy, that 'if the insured, Mrs. Smith, had been treated by a doctor for any serious disease within the space of two years before the date of the policy, then the liability of the Company should be restricted or reduced to the return of the premiums which had been paid the Company."

From this order and the judgment entered upon the verdict so directed, the plaintiff has appealed.

There is a minor controversy in the case whether the policy was ever actually delivered to the insured. I think that as the action was based upon the policy which the complaint alleges was issued and delivered on March 1, 1928, and the answer admits that fact, it is open to neither party to contest the fact, and I will consider it as admitted.

Taking the application then, along with the receipt and with the policy, there does not appear the shadow of a doubt, in my mind, that the company was entitled to deny its liability upon the policy, and that his honor, Judge Townsend, was right in directing a verdict for the plaintiff, for the amount of the premium paid with interest.

The receipt contains the following:

"No obligation is incurred by said Company, by reason of this deposit, unless and until a Policy is issued upon said application, and unless at the date and delivery of said policy the Life proposed is alive and in sound health. *** No obligation is assumed by the Company unless the application is so approved and the Life proposed is now in sound health."

In reference to the application, the transcript in the "statement of facts and testimony" declares: "In the application Mrs. Smith stated that she had never had cancer, was then in sound health, had not been under the care of any physician for three years and had never been under treatment in any dispensary or hospital."

In the policy it is specifically provided under the heading "Conditions": "If (1) the Insured is not alive or is not in sound health on the date hereof; or if (2) the Insured has within two years before the date hereof, been attended by a physician for any serious disease or complaint, or, before said date, has had cancer, or disease of the heart, liver, or kidneys, then, in any such case, the Company may declare this Policy void, and the liability of the Company, in the case of any such declaration or in the case of any claim under this Policy, shall be limited to the return of premiums paid on the Policy."

It is established by the overwhelming evidence in the case, in fact it is conceded by the plaintiff:

1. That the insured was afflicted with cancer, and had been a sufferer from that dread and fatal malady for at least ten months before the date of the policy; that she died within less than ten days thereafter from that cause; she could not possibly have been in "sound health" at the date of the policy.

2. That within less than a year before the date of the policy, she had been attended by at least three physicians, all of whom diagnosed the case as one of cancer; and had received repeated treatments in the Anderson Hospital for that disease.

I cannot discern, either in the exceptions of the plaintiff, any valid, or even plausible, reason why the defendant company should be denied the conventional rights which it has secured; by that term I mean the rights which it has secured by the contract (which is evidenced by the premium receipt, the application signed by the insured, and the policy), unless it be decreed by this court that a different rule should be applied to contracts of insurance, from that which obtains in the interpretation of every other form of contract; this would be manifestly unjust.

By the exceptions the beneficiary of the policy...