Lee v. Travelers' Ins. Co. of Hartford, Conn.

• Decision Date: 19 July 1934
• Docket Number: 13888.
• Citation: 175 S.E. 429,173 S.C. 185
• Parties: LEE v. TRAVELERS' INS. CO. OF HARTFORD, CONN.
• Court: South Carolina Supreme Court

175 S.E. 429

173 S.C. 185

LEE v. TRAVELERS' INS. CO. OF HARTFORD, CONN.

No. 13888.

Supreme Court of South Carolina

July 19, 1934

Appeal from Common Pleas Circuit Court of Greenville County; G. B Greene, Judge.

Action by Eliza H. Lee against the Travelers' Insurance Company of Hartford, Conn. Judgment for plaintiff, and defendant appeals.

Affirmed.

W. G. Sirrine, of Greenville, for appellant.

Mann & Plyler, of Greenville, for respondent.

BONHAM Justice.

January 18, 1897, the Travelers' Insurance Company issued to Joseph Lee its policy No. 90668, whereby it insured the life of Joseph Lee in the sum of $1,000, with his wife, Eliza H. Lee, as the named beneficiary. The policy was of the character known as a 20-year premium policy; that is to say, at the end of 20 years if the annual premiums have been duly paid, the policy becomes a paid-up one, and the amount of the insurance becomes payable to the named beneficiary upon the death of the insured.

In January, 1922, the company lent to Joseph Lee the sum of $526; the loan to mature January 18, 1923. The loan was made upon the security of the policy, and was evidenced by a written contract. It was not paid on maturity, but was carried on, and interest paid until January 18, 1931. The insured died September 15, 1931. Notice of the death of Joseph Lee was given the company, and upon its failure to settle the claim this action was brought.

The complaint alleges the issuance of the policy and the nature of it; the death of the insured; the notice given the company thereof; the demand for payment and the refusal and neglect of the company to make payment.

The answer of the company admits the issuance of the policy and the death of the insured; denies that it is indebted to the plaintiff in the manner and to the amount claimed; alleges that when a loan was made to Joseph Lee, the policy was thereby modified and its value decreased; that the interest was not paid when due, and Joseph Lee was entitled to receive in full settlement cash to the amount of $166.54, and the cancellation of his debt, or a paid-up policy for $240, which Joseph Lee accepted; it admits that it is due the plaintiff Eliza H. Lee the sum of $240, the amount of the paid-up policy. It admits that at the time of his death Joseph Lee held the policy referred to, and that all the premiums thereon had been paid; that Joseph Lee and Eliza H. Lee, beneficiary named in the policy, applied for and were granted a loan for $526 upon the security of the policy; that a loan agreement was made and signed by the Lees, which contained a number of stipulations with reference to the rights of the parties, and certain items modifying the policy; that Lee failed to pay the interest due January 18, 1931; that April 6, 1931, defendant notified Lee that he was in default, the thirty days of grace allowed by the contract having expired, and the defendant offered to extend the time of payment of the interest until May 6, 1931; that in the same letter it offered to increase the loan in order to pay the interest, or to pay Lee the cash equity he had in the policy if he would surrender it, and accept cancellation of the debt; that along with the letter of April 6 was an indorsement, called a "rider," which Lee was instructed to attach to his policy, which showed the cash value of the policy to be $692.54, the amount of the loan to be $526, and the amount of Lee's equity to be $166.54, and that this amount had been applied to purchase paid-up life insurance in the amount of $240; that Lee did not answer the letter and the indorsement thus sent him. That defendant has fully complied with the requirements of the various writings constituting the contract between the parties; that when Joseph Lee failed to accept any of the privileges offered to him, he waived any rights he may have had to object to the indorsement or "rider" which the company sent him; that by retaining the indorsement or "rider," he was estopped from saying that he had not accepted the method of settlement, which the company for his best interest had adopted.

The case was heard by Judge G. B. Greene and a jury.

The evidence in chief for the plaintiff consisted of the policy of insurance sued on; a letter from Travelers' Insurance Company to Joseph Lee dated March 30, 1931; also letter to Mr. Lee from the company dated April 7, 1931.

For the defendant there was introduced a letter from the company to Mr. Lee dated April 6, 1931; the "rider" or indorsement to contract 90668, and the loan contract between the company and Mr. and Mrs. Lee.

In reply the plaintiff presented Perry Lee, the son of Mr. and Mrs. Lee, who testified that, beginning with the first of January, 1931, his father continued to grow more and more feeble until his death in September, 1931; that he was unable to transact any business in the spring and summer of that year; he was unable to read over those letters at that time and make a fair decision as to what was best for his interest; that Joseph Lee never collected the cash surrender value of his policy; he never executed any deed to the company and turned in the policy; the policy was found among his papers, the rider was not attached to the policy, it was in a separate envelope with the name of Travelers' Company on it. The letter from the company was found among his papers, those papers were with it, they had never been detached, they were not signed. Plaintiff offered, also, a letter from the company to Mr. Lee dated January 12, 1931, together with unsigned surrender deed attached to policy 90668.

When all the evidence was in, counsel for defendant moved for verdict against the insurance company for the sum of $240. This is the amount of paid-up insurance which the company contends is all that is due on policy 90668.

Counsel for plaintiff made a motion for directed verdict in favor of plaintiff for the sum of $1,000, with interest at 7 per cent. from September 15, 1931, less the amount of the loan $526, with interest thereon from January 18, 1931, at 5.27 per cent.

After argument, his honor directed the jury to find a verdict for plaintiff as moved for. From the judgment entered on this verdict defendant brings appeal to this court, on ten exceptions. As we construe these exceptions, they make the following questions for determination by us:

That there was a settlement between Joseph Lee and the company on April 6, 1931, which was binding on him and his wife, the respondent.

That the company had the power under the loan agreement to take the action set forth in the letter of April 6, 1931.

Error to hold that the loan contract contained a forfeiture clause.

Error to hold that the company waived its right to insist upon the forfeiture by Lee because no tender was made of the cash value, viz., $166.54, and no notice was given to Joseph Lee.

That Lee's silence and failure to reply to the letter of April 6, 1931, was sufficient "to make a new contract of insurance with the insured so as to do away with his rights under the original policy."

That it was error to hold that the evidence showed that the insured, in January, 1931, was not able to attend to any kind of business.

We might very well rest the decision of this appeal upon the very clear and concise statement by Judge Greene of his reasons for granting the motion of plaintiff for a directed verdict; but in deference to the very earnest argument of appellant's counsel we proceed to the consideration of the issues made by the appeal.

The...