Keller v. Provident Life & Acc. Ins. Co.

• Decision Date: 08 September 1948
• Docket Number: 16126.
• Citation: 49 S.E.2d 577,213 S.C. 339
• Parties: KELLER v. PROVIDENT LIFE & ACCIDENT INS. CO.
• Court: South Carolina Supreme Court

49 S.E.2d 577

213 S.C. 339

KELLER v. PROVIDENT LIFE & ACCIDENT INS. CO.

No. 16126.

Supreme Court of South Carolina

September 8, 1948

[Copyrighted Material Omitted]

Haynsworth & Haynsworth, of Greenville, for appellant.

John C. Henry, of Greenville, for respondent.

OXNER Justice.

On March 3, 1948, an opinion was filed affirming the judgment of the Court below. Appellant filed a petition for a rehearing which was granted. This opinion will be substituted for the opinion heretofore filed.

On April 4, 1941, respondent, a resident of Greenville, South Carolina, who was then employed by the Southern Railway Company as a fireman and later promoted to the position of engineer, applied to appellant, Provident Life and Accident Insurance Company, for a policy of life, health and accident insurance. The application was executed at Greenville and witnessed by H. H. Robinson, the soliciting agent. It was stated therein that if approved and accepted by appellant at its home office in Chattanooga, Tennessee, the insurance was to become effective on May 1, 1941. At the same time respondent also signed and delivered to this agent an order on a printed form prepared by appellant, directed to the paymaster of the Southern Railway Company, requesting his employer to deduct from his wages and pay to appellant each month, beginning with May, 1941, the sum of $6.10 to cover the premium on the policy to be issued. It was stipulated in this pay order that it was executed subject to the terms and conditions of the policy applied for and was made a part of respondent's application for insurance. The deductions requested were regularly made by the Railway Company from May, 1941, through February, 1946, at which time respondent requested his employer to discontinue any further payments to appellant.

This suit was brought to recover the sum of $353.80, which represents the aggregate amount deducted from respondent's wages and remitted to appellant from May, 1941, through February, 1946. Respondent alleged in his complaint that after making the application heretofore mentioned, he was never notified whether it was accepted or rejected; that he never received a policy; that after hearing nothing from appellant for a long period of time, he concluded that his application had been rejected; and that notwithstanding the foregoing circumstances, appellant collected from his employer, without authority and without his knowledge or consent, the sum of $353.80, for which amount it was indebted to him 'as money had and received', together with interest thereon from April 4, 1946. Appellant admitted in its answer receiving the payments sought to be recovered but denied any liability to respondent therefor, and alleged that, in accordance with the application, it duly issued a policy of insurance bearing date May 1, 1941 and mailed same to respondent on April 18, 1941. It was further alleged that said policy was in full force and effect from the date thereof until February, 1946, at which time respondent requested that no further deductions be made from his wages and the policy was cancelled.

The trial resulted in a verdict for respondent in the sum of $262.30, which represented the amount deducted from respondent's wages from May 1, 1941, through November, 1944. At the conclusion of the testimony, appellant made a motion for a directed verdict which was overruled. Following the publication of the verdict, appellant moved for judgment non obstante veredicto. This motion was likewise refused. From the judgment entered on the verdict of the jury, appellant has appealed upon exceptions which challenge the correctness of the Court's rulings in refusing the motions mentioned.

The testimony offered at the trial will now be briefly summarized.

Respondent testified that he heard nothing from appellant with respect to the acceptance or rejection of his application and, in fact, never received any communication whatsoever from appellant after the filing of the application until after five years later when this controversy arose. He testified that no insurance policy was ever received and this was corroborated by his wife who said that she was very much interested in the mail on account of having a son in the Navy and it was her daily custom to get it from the box on the porch of their residence. It is undisputed that no premium receipts were ever mailed or otherwise delivered to respondent. He stated that about thirty days after signing the application, he saw Robinson, the soliciting agent, in Greenville and told him that he had not received the policy, to which Robinson replied that 'he would write the Company', but he never saw Robinson again and received no communication from either him or the Company. Respondent further testified that after more than a year had passed and concluding that his application had been rejected, he obtained from another company on June 26, 1942, a health and accident policy. He said that he filed claims under this policy for illnesses suffered in September, 1942, and January, 1943, but that he filed no claims with appellant because he did not think he was insured by it.

During the latter part of January or early part of February, 1946, respondent noted a 'big shortage' in his pay check and went to the local timekeeper of the railway company for an explanation and then learned, for the first time according to his testimony, that the Insurance Company had been collecting $6.10 monthly from his wages. The Railway Company called to his attention the fact that he had signed an order about five years previously authorizing this deduction, which respondent says he had entirely forgotten. The timekeeper testified that he expressed great surprise upon learning that these deductions were being made. Respondent immediately requested the Railway Company to make no further payments and demanded that appellant return the amounts collected.

Prior to December, 1944, the employees of the South Railway Company were not furnished a statement of the deductions from their wages. They only received a check for the balance due without notation of any kind. However, beginning in December, 1944, and continuing monthly thereafter, the Company furnished its employees on a separate slip with each pay check a payroll deduction and earnings statement. Respondent's statements showed, along with other items, a deduction each month of $6.10 which was paid to appellant. It appears that the amount of his monthly or semi-monthly earnings varied, depending upon the class of service and the frequency and length of the trips made by him; and subject to various deductions, such as withholding tax and railroad retirement benefits. In fact, the payroll deduction statement listed ninety-seven separate items, but only a few of these affected respondent. The deductions noted on the slip are identified by code numbers. For instance, opposite the item of $6.10 appears the code number 19. Against this number on the back of the statement is the name of the appellant. Respondent testified that he assumed that the amount of his pay checks was correct. He was paid on the 15th and 30th day of each month. He stated that having concluded that his application had been rejected and having forgotten all about signing the pay order, it never occurred to him to examine the numerous items indicated by the code numbers on the back of the earnings statement.

The assistant manager of appellant's railroad department testified (by deposition) that respondent's application was received at the home office on April 7, 1941 and in accordance therewith, a policy was issued and mailed to respondent on April 18, 1941. He stated that the envelope was duly stamped and directed to the address at Greenville, South Carolina, as given in the application and that the envelope bore a notice requiring its return to appellant at Chattanooga if not delivered within five days, but it was never returned. Apparently this witness was not testifying from personal knowledge but from the records of the Company and the general routine usually followed in the office. Appellant introduced in evidence an alleged duplicate of the policy claimed to have been issued which purports to be countersigned by H. H. Robinson, 'authorized agent'. He was the same agent who solicited and witnessed the application.

Appellant's motion for a directed verdict was upon the ground that the testimony conclusively showed that during the period in controversy respondent was insured and the premiums collected earned and that respondent knew or should have known of the deductions complained of and is now estopped to deny such knowledge. The motion for judgment non obstante veredicto was made upon the ground that the verdict of the jury established the fact that respondent had knowledge of the situation commencing December, 1944, when the railroad initiated a system of sending monthly to each employee the payroll deductions and earnings statement. It is said that this precluded respondent on the theory of ratification, waiver and laches from any attempt to rescind the insurance contract or recoup any loss, because he made no effort to effectuate such rescission until February, 1946, more than fourteen months later. In support of the last motion, it is argued that there was a completed contract of insurance in 1941 and that in December, 1944, the time fixed by the jury when respondent knew or should have known that appellant was collecting premiums, respondent had the option of either ratifying the contract or disaffirming it, but if he chose to rescind, it was incumbent upon him to promptly do so. The suggestion is further made that the effect of the verdict of the jury was to permit partial rescission which could not be allowed in view...