Pitts v. New York Life Ins. Co.

• Decision Date: 12 May 1966
• Docket Number: No. 18506,18506
• Citation: 247 S.C. 545,148 S.E.2d 369
• Court: South Carolina Supreme Court
• Parties: Margaret B. PITTS, Respondent, v. NEW YORK LIFE INSURANCE COMPANY, Appellant.

Page 369

148 S.E.2d 369

247 S.C. 545

Margaret B. PITTS, Respondent, v. NEW YORK LIFE INSURANCE COMPANY, Appellant.

No. 18506.

Supreme Court of South Carolina.

May 12, 1966.

William M. Wilson, Camden, Roberts, Jennings & Thomas, Columbia, for appellant.

Murchison & West, Camden, for respondent.

LEGGE, Acting Justice.

Action by the beneficiary of a policy of insurance on the life of her husband to recover double indemnity by reason of his accidental death. The case was tried before the Honorable Clarence E. Singletary, Presiding Judge, without a jury; appeal is from his judgment in favor of the plaintiff.

On July 1, 1920, appellant insured the life of Reuben B. Pitts under a ten-year term policy for $10,000, or $20,000 in the event that his death should result from accident. On July 30, 1925, this policy was converted into an ordinary life policy, with like provision for double indemnity in case of death by accident, and with provision for payment of disability benefit of $100.00 per month if the insured should become disabled before age sixty. As so converted, its annual premium was $405.20, of which $10.00 was stated to be for the double indemnity coverage and $28.20 for the disability coverage, with the provision that after the insured should reach the age of sixty years the premiums to become due would be reduced by the amount of the premium charged for the disability coverage. It excluded the double indemnity coverage in case of death resulting from certain causes, among them 'engaging, as a passenger or otherwise, in submarine or aeronautic operations.'

On January 27, 1933, pursuant to application by the insured and the beneficiary, the double indemnity provision was amended by endorsement reading as follows:

'In accordance with the request of the insured, the double indemnity benefit is hereby modified to permit the double indemnity provision to apply if the insured's death occurs as the result of riding as a fare-paying passenger in a licensed passenger aircraft provided by an incorporated passenger carrier and operated by a licensed pilot on a regular passenger route between definitely established airports.

'It is also understood and agreed that the entire provisions for double indemnity as included in the policy will apply only if death occurs prior to the anniversary of the policy on which the insured's age at nearest birthday is 65.

'Any premium due on and after the anniversary on which the age of the insured at nearest birthday is 65 will be reduced by the amount of premium charged for the double indemnity benefit.'

In 1942, when the insured reached age sixty, appellant reduced the annual premium by $28.20, the amount charged for the disability coverage. The insured became sixty-five years of age in 1947, but in that year and each year thereafter appellant continued to bill him without reduction of the premium by the amount ($10.00) charged for the double indemnity benefit; and the insured continued to pay the premiums as thus billed until his death, at the age of eighty-one, on March 25, 1963.

That the insured's death resulted from accident is not disputed. Appellant paid the face amount of the policy, $10,000 but refused to pay under the double indemnity provision. Its offer to refund the double indemnity premiums paid subsequent to August 1, 1947, together with interest on each such payment, was rejected.

In her complaint respondent alleged that appellant, having failed and neglected, after the insured had reached the age of sixty-five, to reduce the premium by the amount charged for the double indemnity benefit as it was obligated to do by the terms of the 1933 endorsement before mentioned, 'has waived its right to rely upon the provisions of the said endorsement and is now estopped' to deny liability for such benefit. In its answer appellant alleged that its failure to note that the premium should be reduced in 1947 was the result of a clerical error, and that the continued payment by the insured and acceptance by it of the unreduced premium after the insured had reached the age of sixty-five were the result of inadvertence and mutual mistake and were contrary to the express terms and conditions of the policy.

It appears undisputed that appellant did not discover the error in its records, and the resulting erroneous billing of premiums, until after the insured's death.

The trial judge held that by having billed the insured for the full premium and accepted payment of the same each year for sixteen years after the insured had reached the age of sixty-five years appellant had waived its right to deny coverage under the double indemnity provision of the 1933 endorsement; and he accordingly ordered judgment for the plaintiff for $10,000.00, with interest from the date on which the face amount of the policy was paid to the beneficiary. That ruling is here challenged by several exceptions.

Policy provisions under which an insurer may assert non-coverage fall into two classes: (1) those providing for forfeiture; and (2) those limiting or excluding coverage. The former may be waived; with regard to the latter, the weight of authority is said to support the view expressed in 29A Am.Jur., Insurance, Section 1135, page 289, as follows:

'The rule is well established that the doctrines of implied waiver and of estoppel, based upon the conduct or action of the insurer, are not available to bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom, and the application of the doctrines in this respect is therefore to be...