Pilot Life Ins. Co. v. Cudd

• Decision Date: 29 December 1945
• Docket Number: 15791.
• Citation: 36 S.E.2d 860,208 S.C. 6
• Parties: PILOT LIFE INS. CO. v. CUDD.
• Court: South Carolina Supreme Court

36 S.E.2d 860

208 S.C. 6

PILOT LIFE INS. CO. v. CUDD.

No. 15791.

Supreme Court of South Carolina

December 29, 1945

Carlisle, Brown & Carlisle, of Spartanburg, for appellant.

Osborne Butler & Moore, of Spartanburg, and Smith, Wharton &amp Jordon, of Greensboro, for respondent.

TAYLOR, Justice.

This action was commenced in the Spartanburg County Common Pleas Court in March, 1944, by the service of summons and complaint. Plaintiff seeks to recover on the ground of alleged mistake, as alleged in the complaint, the sum of $1,013.36, paid to defendant as beneficiary under a policy on the life of her nephew and foster son, Lewis Edward Cudd, of which the sum of $1,000 was death benefit and $13.36 was premium refund.

Defendant answered, admitting the payment, denying mistake, and alleging that the payment was voluntary and was in the nature of a compromise settlement by plaintiff, as set forth in the answer.

The cause came on for trial on January 16, 1945, before Honorable William H. Grimball, presiding Circuit Judge, and a jury.

At the conclusion of all the evidence, motion was made for judgment in favor of each party. After argument his Honor directed a verdict in plaintiff's favor for $1,013.36. Later during the term, his Honor filed an order granting judgment for plaintiff accordingly, and judgment has been duly entered in favor of plaintiff thereon.

In due time defendant served notice of intention to appeal to the Supreme Court from the rulings, orders, decrees, and judgments of the presiding Judge and the cause now comes before this Court on the transcript of record and exceptions which for all practical purposes raise the following issues:

(1) Was such payment a material mistake of fact or error of judgment on the part of the company?

(2) Was such payment a voluntary one?

(3) Was such payment a compromise settlement by plaintiff?

The respondent, Pilot Life Insurance Company, issued its policy dated April 12, 1936, for $1000 on the life of Lewis Edward Cudd, naming the insured's aunt and adopted mother as beneficiary; on or about November 18, 1942, the insured sailed from Ceylon as a member of the Merchant Marine aboard the American Export Lines vessel, Swaokla; on January 16 1943, Elizabeth Blackwell Cudd who was married to the insured in April, 1942, received the following letter from the War Shipping Administration:

'War Shipping Administration

'99 John Street

'New York, N. Y.

'January 15th, 1943

'Mrs. Elizabeth Cudd

'111 West 16th Str.

'New York City

'Re: SA-Lewis E. Cudd

'Dear Madam:

'This letter will advise you that the above-named member of the crew of the indicated vessel has been reported missing as a result of enemy action.

'There was war risk insurance effective upon his life. This office is in possession of documentary evidence that you were designated as the beneficiary of this insurance. In order to facilitate the payment thereof, if and when it is determined to be due and payable, a questionaire is herewith enclosed for your completion and return to this office with the documents checked on page 5 thereof. A certified copy of an English translation should, if necessary accompany the documents requested.

'Your prompt attention to this matter will be appreciated.

'Yours very truly,

'(s) E. A. Bloomquist

'Chief Adjuster

'Division of Wartime Insurance' On January 21, 1943, she received the following telegram from the Navy Department:

'The Navy Department deeply regrets to inform you that your husband, Lewis Edward Cudd, is missing and presumed lost following action in the performance of his duty and in the service of his country. The Coast Guard appreciates your great anxiety and will furnish you further information promptly when received. To prevent possible aid to our enemies please do not divulge the name of his ship----

'Vice-Admiral R. R. Waesche, Commandant,

'U. S. Coast Guard.'

On February 9, 1943, the Maritime War Emergency Board issued the following Certificate of Presumptive Death:

'Maritime War Emergency Board

'Washington, D. C.

'Certificate of Presumptive Death

'Form A

'I hereby certify that the Maritime War Emergency Board has found that Lewis Edward Cudd with the rating of 2nd Cook and Baker is presumed to have died on or about November 28, 1942, as a result of a cause specified in the applicable Decisions of the Maritime War Emergency Board; and that under date of February 9, 1943, the Martime Emergency Board duly made and entered its Order declaring said person presumptively dead in accordance with the provisions of its applicable Decisions and authorized the Secretary of the Board to issue a Certificate of Presumptive Death of said person.

'Dated May 8, 1943

'(s) Erich Nielsen,

'Secretary'

At the request of appellant the American Export Lines wrote her under date of February 26, 1943, as follows:

'Your letter of February 10th has been referred to the writer for answer. We are extremely sorry that we must report that there is very little information which we can give you in respect to the above mentioned vessel.

'Your son signed the articles of this vessel in the capacity of Second Cook and Baker. The vessel left Colombo, Ceylon, about November 18th and has not been heard from since. As she was overdue, the U. S. Coast Guard sent notices to the next of kin. Mr. Cudd gave as his next of kin at the time he signed the articles his wife, Elizabeth, of 111 West 16th Street, New York City.

'We wish we were in a position to advise you something more definite, but under the circumstances, and owing to the lack of information, it is impossible for us to do so.

'We have asked the Maritime War Emergency Board to forward to us an individual certificate of presumptive death and upon receipt of same we will have it photostated, forwarding the original and the photostat to Mrs. Cudd in order to enable her to collect whatever insurance Mr. Cudd might have carried.'

'Note: The letter is captioned 'M. V. Sawokla' and is signed by the Manager of Claims and Insurance Division under the following: 'The United States of America War Shipping Administration, America Export Lines, Inc., Agents.'

Sometime during the Spring of 1943, appellant communicated this information to the local agent of the respondent and he in turn gave such information as he had to the home office who under date of April 8, 1943, wrote American Export, Inc., advising of the existence of the policy in question and that respondent had been advised by appellant that the insured had been missing since November, 1942, and made request for 'Assistance to us in establishing proofs of death of this person or of determining his present status,' as a result of which respondent received the following reply:

'Letter to plaintiff from American Export Lines, Inc., New York, N. Y., dated April 13, 1943 as follows:

'We acknowledge receipt of your letter of April 8 in respect to your above caption.

'We wish to advise that Lewis E. Cudd was Second Cook and Baker on the M. W. Sawokla, which vessel is overdue and presumably lost, in accordance with advices received from the Navy Department. We secured from the Maritime War Emergency Board in Washington, D. C., an Individual Certificate of Presumptive Death, the original of which was forwarded to Mrs. Cudd with photostatic copies thereof so that she could use the latter in the collection of any outstanding personal insurance her husband might have carried. We presume that Mrs. Cudd has sent to you a photostatic copy of the certificate; but in the event she has not done so and has used all her copies for other insurance, we will be glad to send you a photostatic copy upon request.

'If we can be of any further assistance to Mrs. Cudd in collecting the outstanding life insurance with your company, please let us know.'

The local agent inquired of the beneficiary whether or not she had received a Certificate of Presumptive Death and learned it was in the possession of the wife, thereupon respondent communicated with the the Maritime War Emergency Board stating that it had been advised of the death of the insured and requested 'a copy of the original Certificate of Presumptive Death' and received same under date of May 8, 1943, which was based on the original order of the Board dated February 9, 1943, together with their letter advising: 'We believe this will be sufficient for you to pay the beneficiary the amount of the policy carried by you on the deceased.' As a result of this death, claims were signed and filed by the appellant. Respondent then issued its check for $1,013.36 covering the face amount of the policy plus a premium payment of $13.36 which had been paid after the date of presumptive death. This check was delivered to the beneficiary who endorsed it and received payment therefor, June 7, 1943, respondent having at the time of delivery of the check taken up the original policy.

On August 20, 1943, the U. S. Coast Guard wrote the wife, Mrs. Elizabeth Cudd; said letter being signed by Lieutenant of the Coast Guard, title 'Chief, Merchant Marine Personnel Records and Welfare Section' as follows:

'You are advised that this office is in receipt of an official report from the Prisoner of War Information Bureau through the International Red Cross, that your husband, Lewis Edward Cudd, is a prisoner of War of Japan. He is interned in the Hakodate Prisoner of War Camp located on Hokkaido Island, Japan.

'All prisoner of war communications are subject to censorship; it is, therefore, suggested that all such communications deal only with personal matters. To facilitate clearance in the Far East, communication should be either typed or hand-printed in capital letters and the envelope containing any communication to your husband should be addressed as

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