Parnell v. United Am. Ins. Co.

• Decision Date: 13 May 1965
• Docket Number: No. 18347,18347
• Citation: 246 S.C. 26,142 S.E.2d 204
• Parties: Elizabeth T. PARNELL, Appellant, v. UNITED AMERICAN INSURANCE COMPANY, Respondent.
• Court: South Carolina Supreme Court

Page 204

142 S.E.2d 204

246 S.C. 26

Elizabeth T. PARNELL, Appellant, v. UNITED AMERICAN INSURANCE COMPANY, Respondent.

No. 18347.

Supreme Court of South Carolina.

May 13, 1965.

John P. Gardner, Darlington, for appellant.

W. Laurier O'Farrell, Florence, Paul A. Sansbury, Darlington, for respondent.

BUSSEY, Justice.

This action arose out of the application for and issuance by the respondent of a 'guaranteed renewable' hospital and surgical expense policy. The plaintiff-appellant at the trial elected to proceed on the theory of an action in fraud and deceit. The jury returned a verdict for appellant for both actual and punitive damages. The trial judge thereafter granted respondent's motion for a judgment non obstante veredicto, from which order comes this appeal.

Appellant's complaint alleged that she had been defrauded and damaged as the result of certain alleged fraudulent statements made by respondent's agent while inducing her to purchase the policy; certain alleged fraudulent advertisements and representations of respondent, and the alleged wrongful, unlawful and fraudulent cancellation of the policy by the respondent.

Respondent entered a general denial and also set up as a defense certain alleged misrepresentations by appellant contained in the application for insurance, a copy of which was attached to and made a part of the policy, and that respondent had elected to rescind the policy and declare the same null and void from its inception because of the alleged false statements, and tendered to the appellant a refund of premiums paid, which refund was refused. In considering whether his Honor was correct in granting respondent's motion for judgment non obstante veredicto, it is elementary that the evidence and all inferences reasonably deducible therefrom have to be viewed in the light most favorable to appellant. We, accordingly, proceed to review the record in this light.

Appellant was solicited by an agent of the respondent, one Salyer, on or about the 6th day of April 1961. She was at the time 43 years of age, single, and had finished the tenth grade in high school. She was then employed as a representative selling Avon Products, but previously had been employed as a textile worker. Appellant did not know Salyer and when approached by him, told him that she could not get any insurance as she had been under several doctors, had been in McLeod Infirmary, where it was ascertained that she had a heart condition, had been in Duke Hospital and under the care of doctors for a kidney condition, and named the various doctors who had attended her for her several infirmities. She testified that Salyer had said, 'You let me write the policy and if it goes through, if the company passes it, you've got a policy just as long as you live that nobody can cancel it. Nothing can be done unless you refuse to pay the premiums and then you lose your policy.'

Salyer had with him at the time, and exhibited to appellant, a specimen policy identical with the one later issued, and an advertisement which gave a summary of the salient features of the policy. Both the advertisement and the policy had printed thereon in bold type the language, 'Guaranteed renewable for the life of each insured. Company cannot cancel policy.'

In the course of the transaction between Salyer and appellant, they were seated side by side. She testified that Salyer read every word of the advertisement to her and that she was looking at it as he was reading it; that he read the specimen policy to her but she did not specifically say whether she was looking at that while he was reading. She further testified that Salyer read the application to her but did not state whether such was done before or after he completed the same. She insisted that she did not see what all Salyer put down on the application which she signed without reading. She explained her failure to read such by testifying that she put implicit confidence in him, a man she had not previously known, and

'* * * because I thought he was going to tell the truth. I told him the truth and I was expecting him to write the truth. * * *

'No, sir, I did not read it because he just said, 'Sign this application, and you've got--if the company passes you, you've got your policy."

The application clearly and very plainly shows that it contains numerous answers which were admittedly not true. In response to the question as to how many times she had been confined in the hospital within the past five years, her answer was given as one; the nature of the illness, virus.

In response to the question whether she had had any other medical or surgical advice, treatment or operation in the past five years, it was stated only that she had seen Dr. Aimar in Darlington for a cold. Questions as to whether she had had heart or kidney trouble were falsely answered 'no'.

The application immediately above appellant's signature contained the following printed language:

'I hereby apply to United American Insurance Company of Dallas, Texas for a policy to be issued solely and entirely in reliance upon the written answers to the foregoing questions, and agree that it shall not be effective until a policy has been actually issued while all of the above members are alive and in sound health.'

The policy contains, inter alia, the following provision:

'ENTIRE CONTACT; CHANGES: This policy, including the endorsements and the attached papers, if any, and the application, a copy of which is attached hereto and made a part hereof, constitute the entire contract of insurance. No change in this policy shall be valid unless approved by an executive officer of the Company and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or waive any of its provisions.'

In connection with the quoted language, it should be here pointed out that appellant was the only member involved and she knew that she was not in sound health at the time. There is no suggestion on her part that any of the foregoing language was omitted from the reading of these documents to her by Salyer.

That the application contained false material statements is not denied. It is simply contended that appellant told Salyer the truth but that Salyer fraudulently inserted the false answers. This Salyer denied, contending that he wrote the answers precisely as given him by appellant. That appellant herself considered the answers to be material cannot be doubted since, according to her testimony, she considered herself uninsurable in view of the true state of her health when approached by Salyer.

The policy was actually delivered within a couple of weeks after the execution of the application, and appellant did not then read either the policy or the application which was attached thereto and made a part thereof, until the month of August 1961. In the meantime, she had been hospitalized and incurred expense in excess of one hundred dollars, for which she filed her claim. Under date of August 11, 1961, respondent wrote appellant a letter declining to pay the claim and tendering by way of refund all premiums theretofore paid by appellant. According to appellant's testimony, respondent by this letter 'canceled' her policy. The letter was not offered in evidence, but under cross-examination appellant read the following excerpt therefrom:

'It appears that there were misstatements on the application which were material to your acceptance as a risk and that a valid contract of insurance did not come into effect.'

While the appellant was no doubt unaware of any legal...