Dyson v. Commonwealth Life Ins. Co. of Louisville, Ky.

• Decision Date: 04 June 1935
• Docket Number: 14078.
• Citation: 180 S.E. 475,176 S.C. 411
• Parties: DYSON v. COMMONWEALTH LIFE INS. CO. OF LOUISVILLE, KY.
• Court: South Carolina Supreme Court

180 S.E. 475

176 S.C. 411

DYSON v. COMMONWEALTH LIFE INS. CO. OF LOUISVILLE, KY.

No. 14078.

Supreme Court of South Carolina

June 4, 1935

Appeal from Common Pleas Circuit Court of Spartanburg County; E. C Dennis, Judge.

Action by Neal V. Dyson against the Commonwealth Life Insurance Company of Louisville, Ky. Judgment for plaintiff, and defendant appeals.

Affirmed.

Carlisle Brown & Carlisle, of Spartanburg, for appellant.

E. W Johnson and Lyles & Daniel, all of Spartanburg, for respondent.

FISHBURNE Justice.

On February 16, 1931, the Commonwealth Life Insurance Company, in consideration of the payment of the weekly premium therein provided, issued what is known as an Industrial Insurance Policy or contract on the life of Vander Dyson, the plaintiff's son, numbered 1,047,067, agreeing to pay to the plaintiff, the beneficiary named therein, the sum of $250 upon the death of the insured.

Vander Dyson, the insured, died on January 21, 1932, and this policy, together with a receipt signed by B. S. Moore, the defendant's agent, dated December 11, 1931, for $1.25, were found among his effects. This receipt was given for the payment of premiums, and the agent had written thereon in pencil, "Paid in full five weeks." As will be hereafter shown, it was a disputed issue as to which policy contract this receipt applied.

Plaintiff personally notified the defendant, at its local office in Spartanburg, through its district superintendent, D. T. Riddle, of the death of the insured, and presented to him the policy and the above receipt, and demanded payment of the policy. Payment was refused upon the ground that the policy had lapsed, and with the further alleged statement that the receipt showing payment of premiums did not apply to this policy, but referred to another policy for which the insured had made application prior to his death. Plaintiff, in the two trials hereafter adverted to, denied that this statement was made to him, and testified that he knew nothing of the existence of any other policy on the life of the insured until the witnesses, Riddle and Moore, for the defendant, so testified at the trial in the county court. It is in evidence that the company offered to return the $1.25 covered by the receipt. Many of the allegations of fraud in the instant case are predicated upon this alleged suppression and concealment, and the testimony adduced at both trials is widely divergent.

Thereafter, on April 19, 1932, plaintiff brought suit against the defendant in the county court of Spartanburg county to recover the sum of $250 on policy No. 1,047,067. As a bar to recovery, defendant, in its answer, alleged that the policy had lapsed, but made no reference to the existence of any other policy. The cause was heard at Spartanburg on December 1, 1932, and at the trial plaintiff introduced in evidence the aforementioned policy and the receipt of December 11, 1931, contending that the receipt represented payment on this policy, and on no other, and that if so applied, the policy would have been in force until the date of Vander Dyson's death. In that trial the defendant established its defense by the testimony of two witnesses: B. S. Moore, its former agent and superintendent, but who was not in its employ at the date of the trial, and D. T. Riddle, who was then, and throughout the period covered by this litigation, its district superintendent. The jury returned a verdict for the defendant, from which no appeal was taken.

The evidence of these two witnesses was offered by the defendant to prove that the policy upon which the action was based had lapsed; that the premium receipt dated December 11, 1931, referred to another policy issued by the defendant to the insured, and their testimony tended to prove specifically the existence of such other policy.

Thereafter, on May 5, 1933, the plaintiff commenced a second action against the defendant, which is the case here now on appeal, for the recovery of damages, actual and punitive, for the alleged fraudulent breach of a policy contract of life insurance issued during the fall of the year 1931, and based upon the receipt showing premium payments, dated December 11, 1931. After reciting the issuance of the policy first sued upon, the death of the insured, Vander Dyson, the presentation of the said policy, and the receipt of the defendant for payment, and its refusal to pay upon the ground that the policy was lapsed, and the company's alleged claim that its only obligation to the plaintiff was the return of the $1.25 represented by the receipt, plaintiff alleges, in paragraph 6: "That persisting further, and to advance its scheme and purpose to fraudulently breach its contract with the plaintiff, and to deprive him of his rights thereunder, and to subject him to the delay and expense of litigation, the defendant, instead of informing plaintiff that there was another policy than the one in his possession, to which the premium represented by the receipt applied, and which was in force at the time of his son's death,-continued its fraudulent suppression of its knowledge of the contract, and the plaintiff's rights thereunder, up to the trial of a suit brought on the policy that plaintiff had in his possession."

The defendant answered the complaint, admitting the formal allegations thereof, and alleged in substance that a policy of insurance was issued on November 2, 1931, on the life of plaintiff's son, with the estate of the insured as beneficiary, but that said policy was never delivered, and was not in force at the time of the death of the insured, Vander Dyson.

This cause came on for trial at the January, 1934, term of the court of common pleas for Spartanburg county, before his honor, Judge E. C. Dennis, and a jury, resulting in a verdict for the plaintiff against the defendant in the sum of $700 actual and punitive damages. The defendant made timely motions for a nonsuit, directed verdict, and a new trial, which his honor refused, and from judgment entered on the verdict has appealed to this court upon numerous exceptions appearing in the record, but in its printed argument reduces the points at issue to four questions, which we will discuss in sequence: "1. Was there error in refusing to require plaintiff to elect whether he would proceed to trial as in contract or in tort? (Exceptions 1, 11, and 13.)"

When the case was called, and before proceeding to trial, the defendant in due time made a motion, as shown by the record, to require the plaintiff to elect "whether he would proceed as in tort or as in contract on the complaint." After hearing argument, his honor, Judge Dennis, in passing upon the motion, held that the cause of action alleged in the complaint "was for a fraudulent breach of a contract, and that a fraudulent breach of a contract is a tort." We think the ruling of the circuit judge was correct. See Welborn v. Dixon, 70 S.C. 108, 49 S.E. 232, 3 Ann. Cas. 407. These exceptions are overruled.

"2. Did the Presiding Judge err in admitting in evidence, over defendant's objection, a transcript of the testimony of two of defendant's witnesses at a former trial between the same parties involving a suit on another policy of insurance? (Exceptions 2, 3 and 4.)"

This point is covered by exceptions 2 and 3, and it will make the issue clearer to quote herewith the grounds stated in exception 2, as follows:

" It is respectfully submitted that his Honor, the Presiding Judge, erred in overruling defendant's objection to the introduction in evidence by plaintiff of a transcript of the testimony of the witness, B. S. Moore, on a former trial between the parties to the action, the error being that said transcript of testimony was incompetent and inadmissible, in that

(a) The witness, B. S. Moore, was present at the trial, and could have been called as a witness by plaintiff,

(b) The testimony of the witness on the former trial could not be relied on to establish affirmatively the insurance contract alleged in the complaint,

(c) The testimony was not introduced to contradict the witness, but to prove the plaintiff's case,

(d) The issue in the previous trial being whether the policy there sued on had lapsed, and the question whether the premium represented by the receipt for $1.25 applied to a policy payable to insured's estate or to some other beneficiary not being material in the previous case, no estoppel by reason of Moore's testimony could arise against defendant upon which could be based a contract of insurance with plaintiff as beneficiary."

Exception 3 contains the identical wording of exception 2, except that the witness D. T. Riddle is referred to, and not B. S. Moore, and, too, subdivision (d), appearing in exception 2, does not appear in exception 3.

In support of the issue raised by this exception, the appellant cites the case of the State v. Rogers, 101 S.C. 280, 85 S.E. 636, 637, where the court held that the well-established rule in civil cases in this state is that the evidence of a witness who has been examined on a former trial, and where the point in issue is the same, may be introduced on a second trial: "(1) Where the witness is dead, (2) insane, (3) beyond seas, and (4) where the court is satisfied that the witness has been kept away by the contrivance of the opposite party," and in line with this well established rule calls our attention to the following cases: McCall v. Alexander, 84 S.C. 187, 65 S.E. 1021; Wells v. Drayton, 1 Nott & McC. (10 S.C. L.) 409, 411; Petrie v. Railroad Company, 29 S.C. 303, 7 S.E. 515.

The rule of evidence, however, announced in these decisions has no application here, because the evidence of Moore and Riddle, given in the former case, entered this trial through another door. It clearly appears from...