Green v. Industrial Life & Health Ins. Co.

• Decision Date: 24 February 1942
• Docket Number: 15378.
• Parties: GREEN v. INDUSTRIAL LIFE & HEALTH INS. CO. et al.
• Court: South Carolina Supreme Court

18 S.E.2d 873

199 S.C. 262

GREEN v. INDUSTRIAL LIFE & HEALTH INS. CO. et al.

No. 15378.

Supreme Court of South Carolina

February 24, 1942

Tobias & Turner, of Columbia, and Shepard K. Nash, of Sumter for appellant.

A S. Merrimon and L. D. Jennings, both of Sumter, for respondent.

G DEWEY OXNER, Acting Associate Justice.

This action was instituted in the Court of Common Pleas for Sumter County by Jack T. Green, respondent, against the Industrial Life & Health Insurance Company, appellant, and one H. Q Jones for the purpose of recovering damages against both in the sum of $25,000. Within due time, appellant filed a petition and bond for removal of the cause to the United States District Court on the ground of separable controversy and diversity of citizenship. Respondent and Jones are residents of this State. Appellant is a non-resident corporation, organized and existing under the laws of the State of Georgia. The Circuit Judge refused appellant's motion for an order transferring the cause to the United States District Court, from which order this appeal is taken.

There are four exceptions, but there is only one question involved, namely: Does the complaint present a separable controversy entitling the non-resident defendant to remove the cause to the United States District Court?

Appellant, while not undertaking to construe the complaint, urges that it could only be construed as an action either for conspiracy or for breach of contract with fraudulent intent. On either theory appellant contends a separable controversy is presented. Respondent contends that neither of these constructions is correct and that the only cause of action stated is one for fraud and deceit. The learned Circuit Judge passed a short, formal order in which he did not undertake to construe the complaint.

To determine whether a separable controversy is presented, we must look to the allegations of the complaint. We shall refer to the parties as they appeared in the Court below and, for the sake of brevity, to the appellant, Industrial Life & Health Insurance Company, as "Insurance Company."

In analyzing the complaint, paragraphs one to five, inclusive, will be grouped together.

In these paragraphs it is alleged that the Insurance Company is engaged in selling industrial, life, health and accident insurance contracts in Sumter County, State of South Carolina, having as District Superintendent H. Q. Jones, a resident of said County and State; that for a number of years plaintiff had been employed by the Insurance Company as a soliciting agent in Sumter County, during which period, by reason of his long experience, industry and ability, he had built up a large business, splendid good will and was earning in commissions around $55 per week; and that under the terms of this employment either plaintiff or the Company had a right to terminate same at will.

Plaintiff further alleges that, under a group policy carried by the Insurance Company with the Aetna Life Insurance Company, his life was insured for $4,000 and that he was also insured against accident in the same Company for a like amount, which policies contained a provision that the insurance would cease upon termination of plaintiff's employment with the Insurance Company; that the premiums on these two policies, aggregating $3.60 per month, were collected by his employer and by it remitted to the Aetna Life Insurance Company; and that plaintiff also had a small health insurance policy with his employer, the Insurance Company.

It is further alleged in these paragraphs that the defendants, prompted by a desire to take over plaintiff's business, terminate his employment, and employ in his stead a brother of defendant Jones, and to avoid plaintiff going in business in competition with defendants, on June 24, 1940, made the following proposal to the plaintiff: If the plaintiff would retire from the insurance business and not reenter same at any time in the future, the Insurance Company would pay to the plaintiff for the remainder of his life a pension of $15 per week, the first payment to commence the following week. As a further consideration, the Insurance Company would agree, upon payment to it weekly of the premiums aggregating $3.60, to keep in force his policies with the Aetna Life Insurance Company under an arrangement which it represented it had with the Aetna. It is further alleged that plaintiff accepted said proposal and entered into an agreement accordingly.

In paragraph six it is alleged that immediately upon making said agreement, plaintiff, in accordance with its terms, retired from the insurance business, turned over to the Insurance Company the business which he had built up, and assisted it in every way he could to the end that his retirement would not impair the valuable business and good will which the Insurance Company was acquiring.

Plaintiff, in paragraph seven, describes the nature of industrial insurance and points out that it is such as to require unbroken activity of the soliciting agent and renders necessary constant touch on his part with his customers. It is further pointed out that if this contact is lost for even a short period, it is difficult for such an agent to reenter the business and regain the lost patronage.

Paragraph eight of the complaint is as follows: "That being well aware of the foregoing facts, and having gotten the plaintiff out of business and having secured the business built up by the plaintiff, together with its good will and his clients and customers, and well knowing that after the lapse of a short time the plaintiff could not offer the defendants any material competition even if he should undertake to reenter business, the defendants conspired together and wilfully, wantonly and unlawfully formed the deliberate, wicked, wrongful and unlawful design and purpose, to fraudulently break the said agreement entered into by the plaintiff with the said Industrial Life and Health Insurance Company, with the intent to deprive and cheat and defraud the plaintiff of the rights and benefits to which he was entitled under the said agreement, and the different acts and things done and performed by the said defendants, and each of them, as hereinafter alleged, were all steps in the same design and conspiracy in which both of the said defendants participated and were all done and performed for the common purpose aforesaid."

In paragraph nine it is alleged that the weekly pension of $15 per week under the terms of said agreement was paid to plaintiff by the Insurance Company for a period of seven months, the last such weekly payment having been made on February 1, 1941, and that during February, 1941, plaintiff was taken ill and became entitled to $60 per month under his health policy with his former employer, the Insurance Company, for which claim was made. It is further alleged that thereupon defendant Jones, "pursuant to and in furtherance of and as a part of the said conspiracy and design and with the purpose and intention aforestated to break plaintiff's said agreement with the said Industrial Life and Health Insurance Company and to cheat and defraud the plaintiff of his rights and benefits thereunder as aforesaid, and contriving to find an excuse and pretext so to do," made the following false and fraudulent representations with the acquiescence and at the direction of the Insurance Company: (1) That plaintiff's claim for such sick benefit "conflicted with and vitiated" the agreement with the Insurance Company made on June 24, 1940, and that "said agreement and plaintiff's rights thereunder were thereby ended and terminated." (2) That plaintiff "had been on leave from his duties during the time that the said weekly payments were made to him and up to the time they were stopped, the defendants thus denying the making of said agreement." It is then alleged that plaintiff had never requested or been granted any leave of absence, nor was there ever any agreement that he should be paid during a leave of absence; and that although making said false contentions, the Insurance Company "did not offer to reinstate the plaintiff in his position after the termination of the claimed leave of absence." It is further alleged that the Insurance Company, participating in said fraudulent contentions, discontinued making the weekly pension payment of $15.00 per week and had made none since February 1, 1941.

Paragraph ten is as follows: "The plaintiff further alleges that pursuant to the said conspiracy and as a part thereof and for the purpose of carrying out their said wrongful and wicked and unlawful plan and design, the said defendants, scheming and conniving together for their joint and mutual benefit in all of their actings and doings as herein alleged, falsely and fraudulently pretended and represented that the plaintiff's said life and accident insurance was being kept in force by plaintiff's payment of the monthly premiums thereon, and the plaintiff, relying upon the said false and fraudulent representations, continued to pay to the said defendant, Jones, who with the consent and by the direction of the said Industrial Life and Health Insurance Company, accepted and received the same, the said monthly premiums of $3.60 per month on the said insurance each month as the said premiums became due, the last of said premiums paid by the plaintiff having become due and having been paid on the 3rd day of March, 1941.

That the defendants well knew that their said representations were false and that the said Industrial Life and Health Insurance Company had not caused plaintiff's said insurance to be continued in force in accordance with its said agreement, and the said false and fraudulent representations were made by the defendants to induce the...