Horne v. Gulf Life Ins. Co., No. 21638

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: HARWELL; LEWIS, C. J., and NESS; LEWIS; NESS
• Citation: 277 S.C. 336,287 S.E.2d 144
• Parties: Vera HORNE, Respondent, v. GULF LIFE INSURANCE COMPANY, Appellant.
• Decision Date: 08 February 1982
• Docket Number: No. 21638

Page 144

287 S.E.2d 144 277 S.C. 336 Vera HORNE, Respondent,
v.
GULF LIFE INSURANCE COMPANY, Appellant. No. 21638. Supreme Court of South Carolina. Feb. 8, 1982.

Page 145

[277 S.C. 337] Steven C. Kirven, of Watkins, Vandiver, Kirven, Gable & Gray, Anderson, for appellant.

Richard S. Vaughan, Jr., Anderson, for respondent.

HARWELL, Justice:

In 1974 appellant issued three life insurance policies on the life of respondent's ex-husband, Marvin Horne. The insured died on June 13, 1977, and appellant paid the amount of the policy to the insured's sister whom it considered the lawfully designated beneficiary. Subsequently, respondent, claiming she was the lawful beneficiary, brought this action to recover under the policies. The case was tried before a jury. At the conclusion of all testimony, both appellant and respondent moved for a directed verdict. After determining that the facts were undisputed and the issue solely one of law, the trial judge withdrew the case from the jury. Finding that the respondent was the lawful beneficiary, the trial judge awarded her judgment for $12,000 with interest and attorney's fees. We disagree and reverse.

In August and September of 1974, appellant issued two $1,000 policies, and a $5,000 policy with a double indemnity clause on the life of Marvin Horne. The policies were issued in the presence of appellant's agent, the insured and respondent. Respondent was the named beneficiary even though the insured and respondent were divorced. However, the policy reserved to the insured the right to change the beneficiary. Appellant's agent collected the premiums on a weekly basis directly from the respondent until April 1977. At all times respondent retained possession of the policies. On April 5, 1977, Marvin Horne executed a written request to change the beneficiary to his sister with whom he was living. The policy [277 S.C. 338] terms required that the policy itself be endorsed to show the change. Because the insured did not have the policies, he requested duplicate policies:

I/We certify that a diligent search has been made for this policy, that it is lost or destroyed and I/We further certify that there has been no assignment, sale or other disposition of the policy which has

Page 146

not been recorded by Gulf Life Insurance Company.

A new policy was issued with the requested change of beneficiary. The appellant's agent informed respondent that he no longer needed to collect the premiums from her, that the insured had designated a new beneficiary, and that he would thereafter collect the premiums directly from the insured. Subsequently, the insured or the new beneficiary paid the premiums. Respondent admitted that she did not pay any premiums after the change of beneficiary. Two months after the change of beneficiary, the insured died by drowning, thereby entitling the beneficiary to the proceeds under the three policies, including the proceeds under the double indemnity clause. After the insured's death, his sister, the new beneficiary, requested the $12,000 proceeds from appellant. Appellant paid her the claim. Consequently, respondent commenced this action.

Where the insured has reserved the right in his policy to change the beneficiary, the named beneficiary does not have a vested right during the insured's lifetime. Instead, the named beneficiary has a mere expectancy; the complete control of the policy remains in the insured. Davis v. Southern Life Insurance Company, 249 S.C. 194, 153 S.E.2d 399 (1967); Swygert v. Durham Life Ins. Co., 229 S.C. 199, 92 S.E.2d 478 (1956); Davis v. Acacia Mutual Life Ins. Co., infra. In Rice v. Palmetto State Life Ins. Co., 196 S.C. 410, 13 S.E.2d 493 (1941), a mother took out a policy on the life of her...