Kinard v. United Ins. Co. of America

• Decision Date: 09 November 1960
• Docket Number: No. 17711,17711
• Citation: 116 S.E.2d 906,237 S.C. 266
• Parties: Mattie KINARD, Respondent, v. UNITED INSURANCE COMPANY OF AMERICA, Appellant.
• Court: South Carolina Supreme Court

Page 906

116 S.E.2d 906

237 S.C. 266

Mattie KINARD, Respondent, v. UNITED INSURANCE COMPANY OF AMERICA, Appellant.

No. 17711.

Supreme Court of South Carolina.

Nov. 9, 1960.

Watkins, Vandiver, Freeman & Kirven, Anderson, for appellant.

Justin A. Bridges, Eston W. Page, Laurens, for respondent.

STUKES, Chief Justice.

This is an appeal from a judgment on an insurance policy. It was tried as an action for fraudulent breach of contract accompanied by a fraudulent act, and resulted in verdict for plaintiff for $200 actual damages and $1,300 punitive damages.

The complaint alleged the issuance to plaintiff's husband on October 13, 1947 of the policy which provided life insurance of $200, with plaintiff as beneficiary, and a weekly sick or accident benefit of $10, with further provision for waiver of premiums, on certain conditions, for permanent and total disability. In 1953 the plaintiff became so disabled and gave repeated notices thereof to defendant which nevertheless continued to demand payment of premiums until September 1957 when, without warning or notice, it violated its established custom of calling at the home of the insured to collect the premiums; the insured died on January 11, 1958; plaintiff as beneficiary filed proof thereof but defendant refused payment of the death benefit and informed plaintiff that the policy had been cancelled in September 1957; the cancellation was fraudulent and with knowledge of the physical condition of the insured which entitled him to waiver of the premiums; defendant's agent acted fraudulently and with intent to cheat by (1) continuing to demand and collect premiums for four years with the foregoing knowledge, (2) wilfully refusing to waive the premiums as provided by the policy, (3) in following for eleven years the custom of collecting the premiums at the home of the insured, who was a completely illiterate person, and then breaking the custom without notice or warning and thereafter cancelling the policy in order to defraud the plaintiff, who was the death beneficiary, and (4) collecting the premiums until it became apparent from the claims filed and from the agent's observation that the insured was near death, then breaking the custom of collecting in order to cancel the policy and avoid payment of the death claim. The concluding paragraph of the complaint is that by reason of the wrongful and fraudulent breach of the contract and deliberate acts of fraud, cheating and wrongdoing, the plaintiff has been damaged, etc.

The defendant answered by way of general denial, admitted that it had paid claims for disability under the policy but alleged that it was cancelled in 1957 upon the insured's failure and refusal to continue to pay the premiums.

The transcript of record was settled by the trial judge, from which there was no appeal. In the statement it is recited that upon motion of defendant to require the plaintiff to elect between inconsistent causes of action, plaintiff stated her position to be that the complaint stated only one cause of action, to wit, wrongful and fraudulent cancellation of the policy, constituting a breach of contract, accompanied by a fraudulent act. Defendant then moved to strike from the complaint allegations pertaining to fraud and deceit and allegations pertaining to benefits under the contract. Plaintiff's counsel stated that it was not his contention that the policy was in force at the time of the death of the insured but that it was in force at the time of the cancellation in 1957. Whereupon the court denied defendant's motion and the case proceeded to trial.

Contrary to the foregoing statement, defendant's first point on appeal is that plaintiff was allowed to proceed on two or more inconsistent theories of law. This is negated by the above statement and needs little or no discussion. The case was tried upon the theory of fraudulent breach of contract, accompanied by fraudulent act or acts, and the evidence, of which a minimal amount will be stated, because of the necessity for new trial, tended to establish the cause of action. It may be added that the medical and other testimony supported the conclusion that the insured was totally and permanently disabled when defendant cancelled the policy; but that was, and will be on new trial, a question for the jury. The latter observation is also applicable to plaintiff's claim of wilful and fraudulent breach of the long established custom of calling at the home of the insured for collection of the premiums. Simmons v. Service Life & Health Ins. Co., 223 S.C. 407, 76 S.E.2d 288; Hutcherson v. Pilgrim Health & Life Ins. Co., 227 S.C. 239, 87 S.E.2d 685. The plaintiff is illiterate, as was the insured.

Under this first point appellant also argues error on the part of the court in denying motion to strike allegations of the complaint which it is contended were pertinent only to an action for fraud and deceit, for which there are cited Mikell v. McCreery-Pressley Co., 105 S.C. 25, 89 S.E. 467; Lawson v. Metropolitan Life Ins. Co., 169 S.C. 540, 169 S.E. 430; Collopy v. Citizens Bank of Carlington, 223 S.C. 493, 77 S.E.2d 215; and Blackman v. Independent L. & A. Ins. Co., 229 S.C. 54, 91 S.E.2d 709. However, we find none of them applicable to the case and complaint at hand. Rather, the complaint is within Green v. Industrial Life & H. Ins. Co., 199 S.C. 262, 18 S.E.2d 873, 876, where the motives and acts were described as 'wicked,' 'unlawful,' 'cheating,' 'fraudulent,' etc., and we said and held: 'These allegations may be regarded as bearing on the issue as to whether such breach was accompanied by fraudulent acts.' And so here, they are taken to be descriptive of the alleged fraudulent acts which accompanied the alleged breach of contract.

The motion did not specify the portions of the complaint which appellant would strike, which...