Hudson v. Reserve Life Ins. Co.

• Decision Date: 28 April 1965
• Docket Number: No. 18340,18340
• Citation: Hudson v. Reserve Life Ins. Co., 245 S.C. 615, 141 S.E.2d 926 (S.C. 1965)
• Court: South Carolina Supreme Court
• Parties: Rebert V. HUDSON, Appellant, v. RESERVE LIFE INSURANCE COMPANY, Respondent.

Page 926

141 S.E.2d 926

245 S.C. 615

Rebert V. HUDSON, Appellant, v.RESERVE LIFE INSURANCE COMPANY, Respondent.

No. 18340.

Supreme Court of South Carolina.

April 28, 1965.

Lumpkin, Kemmerlin & Medlock, Columbia, for appellant.

Joseph L. Nettles, Columbia, for respondent.

BRAILSFORD, Justice.

The parties agree that the sole question involved on this appeal is whether Section 2, (c), item 2 of Act #829 of the General Assembly of South Carolina for 1956, which is codified as Section 37-474, Code of Laws 1962, applies to a policy of accident and health insurance, issued by respondent to appellant on December 28, 1954, for an initial term of two months, and which, by virtue of the payment of successive premiums as provided by the policy, was of force on April 10, 1961, when a covered loss occurred.

The Code section is a part of Title 37,Chapter 6, relating to accident and health insurance, and provides that 'each such policy delivered or issued for delivery to any person in this State shall contain the provisions specified in this section,' including:

'(2) A provision as follows:

'TIME LIMIT ON CERTAIN DEFENSES: (a) After two years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or desability, as defined in the policy, commencing after the expiration of such two-year period.'

It is conceded that the Act of 1956 was prospective in its operation, and, therefore, inapplicable to contracts which were in existence at the time of its adoption.This concession would resolve the issue but for appellant's contention that a new contract arose upon the payment and acceptance of each renewal premium; hence, the quoted provision of the statute became a part of the policy upon its renewal for an additional term after the approval of the Act on March 31, 1956.This raises the question of whether the insurance in force after the payment and acceptance of each renewal premium was a new and independent contract or an extension or continuation of the original contract.The answer to this question depends upon the intention of the parties as expressed in the writing.Am.Jur., Insurance, Section 357, 44 C.J.S.Insurance§ 283.We think it clear from the terms of the policy that the parties contemplated continuous insurance, rather than successive independent contracts.

The policy acknowledged an 'initial payment' of $9.00, which kept the insurance in force for the 'initial term' of two months.Thereafter, the 'monthly premium' was $1,50, with the privilege of paying 'renewal premiums' monthly or quarterly, semi-annually or annually at slightly reduced rates.

The insuring agreement...