Henderson v. Capital Life & Health Ins. Co.

• Decision Date: 26 January 1942
• Docket Number: 15356.
• Citation: 18 S.E.2d 605,199 S.C. 100
• Parties: HENDERSON v. CAPITAL LIFE & HEALTH INS. CO.
• Court: South Carolina Supreme Court

18 S.E.2d 605

199 S.C. 100

HENDERSON v. CAPITAL LIFE & HEALTH INS. CO.

No. 15356.

Supreme Court of South Carolina

January 26, 1942

Appeal from Common Pleas Court, of Bamberg County; G. Dewey Oxner Judge.

Action for alleged fraudulent breach of life insurance contract by Alice Henderson against Capital Life and Health Insurance Company. From a judgment for the plaintiff, defendant appeals.

The order of Judge Oxner directed to be reported follows:

This is an action for alleged fraudulent breach of contract alleged to have been accompanied by fraudulent acts. The jury returned a verdict in favor of the plaintiff for both actual and punitive damages. A motion for new trial was marked "heard" and the motion heard on written arguments which have just been filed.

The motion is based upon eighteen grounds. The first ten grounds relate to alleged error in refusing to grant a nonsuit and directed verdict. This necessitates a review of the testimony. I shall not endeavor to cover all the testimony but the substance of the pertinent portions thereof.

The plaintiff is a colored woman, without education, who lives in Bamberg County and has a rather large family. She carried insurance on herself, her husband and a number of her children. The money for the premiums was furnished, in part at least, by her husband, but she seems to have had principal charge of the matter of making payments. While thus carrying insurance on certain members of her household, during the latter part of April or early in May, 1940, application was made for a policy on the life of her son, William Henderson Jr.

She was already carrying certain other policies with the defendant and she testifies that on numerous occasions the agent, Boylston, would advance premium payments for her and she would reimburse him on the next trip. When the application for the policy of $116 on the life of William Henderson, Jr., was made, no premium was paid at the time said application was taken by the agent, Boylston. Pursuant to this application, the policy in controversy on the life of William Henderson, for $116, was issued by the defendant on May 6, 1940. A week or two later Boylston, the agent, having had said policy delivered to him by the Company, went to the home of the plaintiff. According to the plaintiff's testimony, when Boylston came, she was not at the house but was away in the field hoeing cotton. Her husband advised Boylston to that effect and stated that if Boylston would wait a little while that the plaintiff would return and pay for the policy. The husband stated that the money was in the house but apparently did not know where it was. Boylston told the husband of the plaintiff that he was in a hurry and for him to tell the plaintiff to put the money in an envelope and he would get it on his next trip. Boylston left with the husband the policy in controversy and the receipt book. And, in effect stated that the policy was then in force. The husband offered to bring the money to Boylston the following Saturday in Bamberg, but Boylston preferred to collect the money on his next trip to the plaintiff's home. According to the testimony of the husband, he asked Boylston what would be the situation if anything should happen and Boylston replied that he always took care of the plaintiff, paid her premiums and she paid him on his next trip. According to the plaintiff's testimony, there were no conditions whatsoever attached to the delivery of said policy and receipt book and Boylston was to collect the premium on the next trip. The testimony of the plaintiff tended to show that there was no agreement whatsoever or condition that the policy was not to be effective until the insured was seen by the agent or until the first premium was paid.

According to the testimony of the defendant, on this occasion the plaintiff's husband stated that the insured was not there and Boylston stated that they must be sure to have the boy there on the next trip together with the money to pay the premium. Further, that the policy and receipt book were left at the plaintiff's home to enable the plaintiff and other members of her family to read the policy to see just exactly what they were getting. In his testimony, Boylston denied that there was any agreement to extend credit for the premium or that the policy was to be immediately effective.

The insured died on or about May 27, 1940, or a week or two after the policy was left at the plaintiff's home. He appeared to be in good health on Saturday and died the next day in a hospital in Orangeburg. The first news of his death came the following Monday and was first learned by the plaintiff's husband. According to plaintiff's testimony, the husband after learning of the death of the insured, went to the home of Boylston to obtain the insurance money to pay burial expenses. According to this testimony, Boylston, when first advised of the insured's death, stated that he would get blanks for the plaintiff to sign in order to get the insurance money; that Boylston then went back into his home and upon returning stated that the insurance was not in force because the initial payment was never made. Boylston was reminded of his alleged agreement that the policy was to be immediately effective and that the initial payment might be paid upon the next trip, whereupon Boylston stated that he was sorry the down payment had not been made but that such an agreement to extend credit for the premium was against the law.

According to the defendant's testimony, on this occasion plaintiff's husband stated that he wanted to pay the insurance premium and that the insured was dead, whereupon Boylston stated that he was very sorry but the policy was not in force because the premium had not been paid.

It is undisputed that immediately after the foregoing conversation Boylston went to the home of the plaintiff, at which time the plaintiff and her children did not know of the insured's death. According to testimony of the plaintiff, Boylston came to her home, advised them of the death of the insured, denied he had seen her husband and demanded the policy in controversy. At that time the plaintiff and other members of her family were greatly grieved over the death of the insured and upon inquiring of Boylston about the payment of the insurance money, Boylston said he was going to the headquarters of the insurance company, would do all he could to get the money and would be back that night. Boylston, on this occasion, took the policy and the receipt book which have never been returned.

Boylston, in his testimony, stated that he knew the policy was not effective and that he went to the home of the plaintiff to secure the policy and receipt book because it was not in force. That he told the plaintiff at the time he took the policy and the receipt book that she would not get any money because the premium had not been paid and that he carried the policy and receipt book to Columbia and placed them in a drawer where they remained for several months. Boylston denied that upon taking the policy, he promised to do all he could to collect the money and, on cross-examination, stated that he had to leave the policy in Columbia for the insured was dead and no money would ever be paid on the policy and he would have to report it to the home office. On cross-examination, Boylston was asked why as soon as he heard of the death of the insured, he went to the home of the plaintiff and took the policy. He replied that this was done because nothing had been paid on the policy and he had to report it back to the Company.

Sometime later the matter was turned over to counsel for the plaintiff, who on June 25, 1940, demanded the policy. A further demand was made by counsel for the plaintiff on July 1, 1940. Several other demands were made and the policy not being returned, this suit was instituted on July 15, 1940. The policy was produced by the defendant upon notice on the trial of the case. According to the defendant's testimony, the policy was misplaced and could not be produced.

In its answer, the defendant contended that the policy was not to be effective until its agent saw the insured and ascertained that he was insurable and would not be effective until the initial premium was paid. It was further contended by the defendant that the policy was without consideration.

It is urged by the defendant that under the testimony the policy was never effective for the foregoing reasons. The policy contained the following provision: "In consideration of the payment of ten cents, weekly in advance, each Monday hereafter, insures William Henderson, Jr. ***. this policy is in full benefit from the date it is issued and delivered."

The policy contained no stipulation that it was not to be effective until the initial premium was paid nor did it contain any stipulation that it was not to be effective until the agent saw the insured.

Under the foregoing testimony, I think it was a question for the jury as to whether or not said policy was valid and effective upon delivery of same to the husband of the plaintiff. Under the well settled rule, the company may waive the time and method of the payment of premium. It will be observed...