Johnson v. Life & Casualty Ins. Co. of Tennessee

• Decision Date: 11 July 1939
• Docket Number: 14913.
• Parties: JOHNSON v. LIFE & CASUALTY INS. CO. OF TENNESSEE.
• Court: South Carolina Supreme Court

3 S.E.2d 805

191 S.C. 96

JOHNSON v. LIFE & CASUALTY INS. CO. OF TENNESSEE.

No. 14913.

Supreme Court of South Carolina

July 11, 1939

The order of Judge Lide follows:

This case was tried before the undersigned, as Presiding Judge and a jury, at the October, 1938, term of the Court of Common Pleas for Anderson County, and resulted in a verdict for the plaintiff. A motion was duly made by the defendant at the proper time for a directed verdict in its favor, which was then refused, but with the consent of counsel for the respective parties the Court reserved his final decision thereon. Hence the motion was reargued before me fully during the November, 1938, General Sessions term for Anderson County, to wit, on November 28th, and the matter has had my careful consideration.

This action was brought by Ida Johnson as the beneficiary to recover the face value of a policy of insurance issued by the defendant, to wit, the sum of $400, with interest, on the life of the plaintiff's son, Bramlett Johnson. The policy was dated May 3, 1937, and Bramlett Johnson, the insured died on June 8, 1938. The issuance of the policy and the payment of the premiums thereon were admitted.

The defendant sets up in its answer by way of affirmative defense the provisions contained in the policy designated as " Limitation of Insurance", which copied from the policy are as follows: "Limitation of Insurance.--Within two years from date of issuance of this policy, the liability of the Company under same shall be limited, under the following conditions, to the return of premiums paid thereon: (1) If the Insured was not in sound health upon the date of issuance and delivery of this policy or if the Insured before its date had Tuberculosis, or Diabetes, or Cancer, or Chronic Bronchitis, or disease of the heart or blood vessels, or disease of Kidneys, or Cirrohosis of the Liver; or (2) if the Insured shall die by his own hands, whether sane or insane or as a result of acts committed by him while in the commission of or as a punishment for some act in violation of law, or from the malicious or unlawful act of anyone who is a beneficiary hereunder; or (3) if insured is pregnant at date of issuance of policy, and death results from such pregnancy. Knowledge of the agent shall not be taken to be knowledge of the Company. Where the Statute of the State in which this policy is written contains a different provision on this subject than the above, the language of such Statute shall be substituted to the extent of this difference for this clause, but no further."

The answer properly alleged the tender of the premiums which had been paid.

And the motion of the defendant for a directed verdict also relies upon the above quoted provisions of the policy, and further says: "And the uncontradicted testimony showed that the insured was not in sound health on the date of the issuance and delivery of the policy and the testimony further demonstrates that within two years from the date of the issuance of the policy the insured suffered from heart trouble and disease of the kidneys, from which he died."

The attending physician's certificate of death states that the cause of death was "nephritis--(Bright's Disease)". And the evidence is clear that prior to the issuance of the policy one of the insured's kidneys had been removed, and that there is close association between kidney disease and heart trouble.

It was, however, my opinion during the course of the trial that the case should be submitted to the jury on the question of waiver, and after mature reflection I am of the same opinion, and I think the verdict was well sustained by the evidence.

It is very earnestly contended by counsel for the defendant that there can be no question of waiver in a case of this kind, and that in the instant cause the Company did nothing which would constitute or be evidence of waiver of the above quoted provisions of the policy, and that the Company did nothing to cause the insured or the beneficiary to change their position or status. Quoting from counsel's well prepared memorandum they say: "They insured him, but said, in effect, 'Though we know of your condition, we will insure you, but our liability under the policy is limited for a period of two years from the date of the policy, if you are not in sound health or if, before date of the policy, you had disease of the heart or disease of the kidneys."'

The limitation of insurance contained in the policy is of course a valid provision, but, reduced to its simplest terms, where the insured before the date of the issuance of the policy had a disease of the kidneys, the insurance is contingent upon the insured's living two years after the date of the issuance of the policy; and until the two years has elapsed there is no insurance; and there being no insurance the premiums paid will be returned. Stating it another way, the insurance will be forfeited if death occurs within the period of two years.

Certainly such a provision of an insurance policy may be waived by the insurer. And an examination of the testimony in this case will show that there was ample evidence of waiver. The plaintiff testified that certain agents of the company, to wit: Messrs. Herring and Blackwell, called at her house on May 3, 1937, the date of this very policy, for the purpose of collecting insurance on other policies held by members of her family with the defendant company, and that on this occasion one of these agents brought up the subject of writing insurance on other members of the family. I quote the following from the transcript of Mrs. Johnson's testimony:

"Q. All right, how did the subject of this policy come up? A. Well, I paid for the insurance, and he says, 'Don't you all want me to write some insurance on the rest of you?' I says, no, sir, we are carrying all the insurance we are able to, except Bramlett, and he hasn't got any, only a paid-up policy. And he says, 'I don't see why you haven't got one on him.' I says, well, they turned him down when he had his kidney removed and wouldn't insure him. He says, 'Well, he's at work now, able to do work, running thirty-six looms; I don't see why he can't get insurance. ***' (There was an interruption at this point.)

"Q. All right, you may proceed now. What did he say about it? A. He says, 'I don't see why, he is working every day and all down here in the mill,' says, 'I don't see why he can't get any insurance;' says, 'I'll write you up one for him.' And I says, all right.

"Q. And what did he do then? A. He wrote it up and, he says, 'When you get your policy back, Mrs. Johnson, you pay your premium and it will be in full benefit.' And that's about all he said.

"Q. Now, did you or not pay any premium to Mr. Blackwell then and there on this policy? A. I didn't pay him anything until the policy came back.

"Q. When did it come back? A. In about two weeks.

"Q. Who brought it back? A. Mr. Herring.

"Q. Did you pay him a premium? A. I give him twenty-five cents when he brought the policy."

This testimony definitely shows that the agents of the company were informed that Bramlett Johnson, the insured had previously suffered from kidney disease, but that notwithstanding this fact, it was stated by one of these agents that the policy would be issued and that when it was delivered it would be in full benefit. Hence the plaintiff and the insured were fully justified in believing that the policy represented a present...