Hodge v. National Fidelity Ins. Co., 16581
| Citation | 68 S.E.2d 636,221 S.C. 33 |
| Decision Date | 14 January 1952 |
| Docket Number | No. 16581,16581 |
| Parties | HODGE v. NATIONAL FIDELITY INS. CO. |
| Court | United States State Supreme Court of South Carolina |
Roy A. Powell, Irvine F. Belser, Jr., Columbia, George D. Levy, Sumter, for appellant.
Nash & Wilson, Sumter, for respondent.
This is an action on an accident policy issued by the National Fidelity Insurance Company to D. G. Hodge on June 10, 1949, in which the insured's wife, Anna Y. Hodge, was named as beneficiary under the clause insuring against death. The question involved is whether the policy was in force at the time of insured's death on July 31, 1950. The case was tried at the April, 1951, term of the Court of Common Pleas for Sumter County. At the close of the testimony offered by the beneficiary, counsel for the insurance company stated that they would offer no testimony and moved for a directed verdict. After some discussion, it was agreed that the jury should be dismissed and all issues of law and fact decided by the Court. Thereafter in an order filed on June 29, 1951, judgment was rendered in favor of the beneficiary for the full amount of the policy with interest, from which the insurance company has appealed.
The material facts are undisputed and are substantially as follows: The Palmetto Automobile Association, hereinafter referred to as the Association, provides various services and benefits to automobile owners for which certain membership dues are charged. Among the benefits furnished each member is a policy of accident insurance, the premium being paid by the Association from a portion of the dues collected. It was arranged that appellant should write this insurance. Under an agreement entered into between the parties, the Association was appointed appellant's agent to receive and accept proposals for insurance and to collect and receipt for the premiums. Appellant agreed to pay to the Association a certain percentage of the premiums collected and allow it to participate in the profits from the business produced. The Association agreed that appellant should write all insurance furnished to its members.
D. G. Hodge became a member of the Association in June, 1949, and incident to such membership, there was issued to him by appellant an accident policy insuring against certain specified losses, including an indemnity in the sum of $1,500 for loss of life resulting from bodily injury received through accidental means. The policy also provided for certain disability and hospital benefits on account of injuries sustained in automobile accidents. It was stated in a rider that the insurance became effective on June 10, 1949, and expired at noon on June 10, 1950. The only other portions of the policy pertinent to this controversy are as follows:
'This Policy is renewable at the option of the Company only and provides indemnity for loss of life, limb, sight or time, by accidental means, to the extent herein limited and provided.
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'This policy is issued for a term of one year beginning at 12 o'clock noon, Eastern Standard Time, on the Effective Date shown in the attached rider.
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'If this policy be a renewal of an expired like policy, any indemnity becoming payable under Part A shall be in an amount larger than originally provided, as follows: first renewal--original amount plus 10%, second renewal--original amount plus 20%, third renewal--original amount plus 30%, fourth renewal--original amount plus 40% and fifth and subsequent renewals--original amount plus 50%.
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'If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the Company or by any of its duly authorized agents shall reinstate the policy, but only to cover loss resulting from accidental injury thereafter sustained.
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'The Company may cancel this policy at any time by written notice delivered to the Insured or mailed to his last address as shown by the records of the Company, together with cash or the Company's check for the unearned portion of the premiums actually paid by the insured, and such cancellation shall be without prejudice to any claim originating prior thereto.
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'This policy is issued in consideration of a paid membership in the Palmetto Automobile Association.'
It is conceded that no renewal premium was ever paid on the above policy, which according to its terms expired on June 10, 1950. It is alleged in the complaint, however, that 'said expiration date was waived by defendant corporation, the term of said policy being extended and the face amount of said policy was increased by the defendant corporation in the amount of $150.00.' In support of this allegation, respondent introduced in evidence a letter mailed to the insured on July 29, 1950, in which there was enclosed a yellow printed slip, as follows:
County: Clarendon.
D. G. Hodge
Route 1
Please make check payable to Palmetto A. A.'
There was also included in the above envelope a pink slip which read:
'Dear Member:
'Your Membership Is In Danger Of Being Cancelled!
'Yours for service,
'Palmetto Automobile Association.'
Attached to the foregoing slips were three partially completed postdated checks, payable to the Association, aggregating $12.50, the membership fee for one year.
The foregoing letter was taken from the mailbox by the insured about 2:00 P.M. on July 31, 1950. He placed the envelope unopened on a coffee table and about 6:00 P.M., four hours later, was killed in an automobile accident. The letter was subsequently found by his wife.
Mr. Raney, who stated he was the owner of the Association, testified that it was his custom to notify each member three or four weeks before his membership expired and urge renewal; that occasionally credit was extended by the use of postdated checks, but that no membership was ever renewed until the member had either paid his dues or obligated himself to do so; that when this was not done before the expiration date, the insurance policy was dated from the time payment was received or credit arrangements definitely made; that a renewal of the insurance was always evidenced by a new policy; that the policy in controversy was never renewed; and that the statement on the printed slip above mentioned to the effect that insured's policy had almost expired and that he was about to lose the benefits of his membership was sent to him through error.
The Court below concluded that appellant had waived its 'right to insist upon a forfeiture of the policy in question by its own conduct and waived the expiration date of the said policy and extended the said policy and coverage thereunder until at least August 5, 1950.' Accordingly, judgment was awarded against appellant for the sum of $1,650 and interest.
We think the pivotal question in this case is whether there was a valid contract for the renewal of the policy. As in the case of contracts generally, it is essential to the creation of a contract of insurance that there be an offer or proposal by one party and an acceptance by the other. Regardless of which party makes the offer or proposal, its acceptance by the other is necessary to the creation of the contract. Hydrick v. Rhode Island Insurance Co., 131 S.C. 8, 127 S.E. 367; Keller v. Provident Life & Accident Insurance Company, 213 S.C. 339, 49 S.E.2d 577; 44 C.J.S., Insurance, § 232. The acceptance of a proposal for insurance must be evidenced by some act that binds the party accepting. A mental resolution, that can be changed, is not sufficient. Keller v. Provident Life & Accident Insurance Co., supra; Boone v. Standard Accident Insurance Co. of Detroit, 192 Va. 672, 66 S.E.2d 530, 535.
A renewal of a term policy is in effect a new contract of insurance and must have all the essentials of a valid contract. 'Thus a renewal cannot be effected or consummated without the mutual assent of the parties and a meeting of the minds of the parties on all the essentials of the contract, and a new consideration.' 44 C.J.S., Insurance, § 283, p. 1126 and 1127. Of course, there may be an implied acceptance of an offer to renew a policy, but, as stated in Boone v. Accident...
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