Outlaw v. Calhoun Life Ins. Co.

• Decision Date: 01 May 1961
• Docket Number: No. 17772,17772
• Citation: 238 S.C. 199,119 S.E.2d 685
• Court: South Carolina Supreme Court
• Parties: Annie OUTLAW, Respondent, v. CALHOUN LIFE INSURANCE COMPANY, Appellant.

Page 685

119 S.E.2d 685

238 S.C. 199

Annie OUTLAW, Respondent, v. CALHOUN LIFE INSURANCE COMPANY, Appellant.

No. 17772.

Supreme Court of South Carolina.

May 1, 1961.

John Gregg McMaster, Columbia, for appellant.

Donald H. Holland, Murchison, West & Marshall, Camden, for respondent.

TAYLOR, Acting Chief Justice.

This appeal arises out of an action for fraud and deceit in inducing respondent, Annie Outlaw, to execute to defendant, Calhoun Life Insurance Company, a final release and discharge of obligation and liability under an insurance policy issued by the defendant upon the life of plaintiff's son, Stephen L. Edenfield.

Plaintiff alleged in her complaint that defendant had issued its policy on the life of her son, Stephen L. Edenfield, in which she was the beneficiary and which provided for payment of $409 in the event of insured's death and $818 should he die by accidental means; that her son met death by accidental means in July, 1958; that the agents of the defendant by overreaching, deceit, and fraud procured from her a final release by giving her the impression that she was executing a receipt for the full amount due under the policy for the accidental death of her insured son; that after executing the release she saw for the first time that the draft was for $409 instead of $818. Plaintiff demanded judgment for actual and punitive damages.

The defendant answered by generally denying all allegations except those specifically admitted. It was further alleged by way of answer that an investigation disclosed that the insured son was intoxicated on July 23, 1958, when he fell from a moving automobile and sustained the injuries from which he subsequently died on July 26, 1958; and that under the terms of the policy, accidental death benefits were not payable if death resulted from injuries sustained while intoxicated; that these facts were made known to the plaintiff who was only entitled to $409 which had been paid.

Upon trial, the jury awarded plaintiff $409, actual damages, and $3,000, punitive damages. Timely motions were made for a nonsuit and judgment n. o. v.

This case has previously been before this Court by way of appeal from an Order overruling defendant's demurrer, see Outlaw v. Calhoun Life Insurance Company, 236 S.C. 272, 113 S.E.2d 817, 818, in which this Court stated:

'In an action for fraud and deceit, the plaintiff, in order to state a good cause of action, must allege (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity; (5) his intent that it should be acted upon by the person; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) and his consequent and proximate injury. Jones v. Cooper, 234 S.C. 477, 109 S.E.2d 5, and Mishoe v. General Motors Acceptance Corporation, 234 S.C. 182, 107 S.E.2d 43.'

One who charges another with fraud and deceit as a basis for a cause of action must establish such by clear, cogent, and convincing evidence, Griggs v. Griggs, 199 S.C. 295, 19 S.E.2d 477; and the failure to prove any of the elements necessary to support an action for fraud and deceit will prevent recovery, Able v. Equitable Life Assur. Society, 186 S.C. 381, 195 S.E. 652; Mishoe v. General Motors Acceptance Corporation, supra.

Respondent, 78 years of age, stated that she has a faith grade education and had been doing sewing 'to help out.' That approximately one month after her son's death, on the 8th of September, a Mr. Baxley and a Mr. Catoe, representatives of the Calhoun Life Insurance Co., came to see her at her home. Mr. Baxley stated: 'I have got here with your check at last' and placed the check upon a table, face down, with his hat over it. The release was placed upon the table, face up, with the statement: 'Now, this is showing that you are getting your check'; and plaintiff signed the release where indicated and was given the check. Thereafter, she discovered that the check was for $409 and not for $818 as it would have been in case of double indemnity; that she called this to the attention of Mr. Baxley and he replied: 'He was drunk'; that she offered to return the check but he refused; that she had no other conversation with him before signing; that she could read but made no attempt to do so before signing the release or to have either of the other three persons present, including her niece, do so or to explain it to her. Plaintiff testified that the check was under Baxley's hat, but she at no time testified that the release, which plainly set forth the amount as being $409 and which she signed, was obscured in any way or that any false statements were made by defendant's agents to induce her to sign. On the contrary, she testified she signed it without reading it and asked no questions thereabout 'because I thought he was a gentleman.' After defendant's representatives, Baxley and Catoe, left, she carried the check to the kitchen where she showed it to her niece. Plaintiff at no time testified that any false representation had been made by defendant's agents to induce her to sign. From her own testimony, she signed of her own accord. She accepted the check on September 8, 1958, endorsed and deposited it shortly thereafter in the Building and Loan in Camden, where it remained until more than three months later, December 16, 1958. On December 18, 1958, she offered to return the money to the defendant company by way of a Building and Loan check in the amount of $409. We are of opinion that plaintiff failed to prove by clear, cogent, and convincing evidence that defendant's representatives knowingly made false representations to plaintiff with the intent that she act thereon to her injury. The only representation they made was 'Now, this is showing that you are getting your check,' which was not a false representation as the signed instrument was denominated 'Claimants Receipt and Release.'

In the first appeal in this case, this Court stated that 'We adhere to the rule that one cannot complain of fraud in the misrepresentation of the contents of a written instrument signed by her, when the truth could have been ascertained by reading the instrument, and one entering into a written contract should read it and avail herself of every opportunity to understand its content and meaning.'

The testimony of plaintiff's niece varied in some particulars from that of plaintiff; but plaintiff's case, based upon fraud and deceit, must stand or fall upon the facts as she conceived them to be and not that of some third party.

Appellant also charges error in that the trial Judge charged the jury that 'the defendant must also prove to you that if, at the time of the accident, the deceased was intoxicated, that the intoxication of the deceased must have been the direct and proximate cause of the death of the deceased, and those things must be proved by the defendant by the greater weight or preponderance of the evidence.' The provision of the policy with respect thereto appears as follows: 'The agreement to pay accidental death benefits hereunder shall be null and void if death shall have resulted from bodily injuries sustained by insured while intoxicated * * *.'

Appellant specially objects to that portion of the charge which requires it to show that the intoxication of deceased was the direct and proximate cause of the death of the insured.

This identical question has not heretofore been before this Court; however, the reasoning of the Court employed in interpreting the effect of other provisions of insurance policies will shed some light upon the question.

Sec. 37-471.25, Code of Laws of South Carolina, 1952, 1960 Cumulative Supplement, which deals with insurance provision as to intoxicants and narcotics, subject to Secs. 37-471.3 and 37-471.26, states:

'Intoxicants And Narcotics. The insurer shall not be liable for any loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.'

In Deadwyler v. Grand Lodge K. of P. Etc., 131 S.C. 335, 126 S.E. 437, this Court refused to give a strict construction to the provision in an insurance policy which provided: 'Any member meeting death as a result of intemperance or immoral conduct, or by suicide, shall not be entitled to the benefit provided in case of death.' The Court concluded in effect that where a set of facts is susceptible of more than one interpretation, the policy should be construed for the benefit of the insured, and sustained a directed verdict for p...