Rice v. Palmetto State Life Ins. Co, 15224.

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: BAKER, Justice
• Citation: 13 S.E.2d 493
• Parties: RICE. v. PALMETTO STATE LIFE INS. CO.
• Docket Number: No. 15224.,15224.
• Decision Date: 04 March 1941

13 S.E.2d 493

RICE.
v.
PALMETTO STATE LIFE INS. CO.

No. 15224.

Supreme Court of South Carolina.

March 4, 1941.

[13 S.E.2d 493]

Appeal from Common Pleas Circuit Court of Greenville County; J. Strom Thurmond, Judge.

Action by Louise Rice against Palmetto State Life Insurance Company for fraudu-

[13 S.E.2d 494]

lent cancellation of a life policy. From an adverse judgment, defendant appeals. Reversed.

Tobias & Turner, of Columbia, and Love & Thornton, of Greenville, for appellant.

Wyche, Burgess & Wofford, of Greenville, for respondent.

BAKER, Justice.

On May 27, 1935, the Palmetto State Life Insurance Company issued a policy of insurance upon the life of one Louise Rice, the respondent herein, for the sum of $306. The policy was taken out by the respondent's mother, Mrs. Lillian Liester, who was named beneficiary, who paid the premiums, and who retained the policy in her possession. The policy contained neither sick nor accident benefits, nor cash surrender nor loan values. It was a straight life policy payable to Mrs. Liester upon the death of her daughter, the respondent.

The policy did contain a provision, however, that if, while it was in force, the insured should become totally disabled and unable to perform work of any kind the appellant company would waive the payment of further premiums. On June 30, 1936, the insured filed with the appellant her claim for a waiver of premiums, together with proof of continuing disability, and on July 15, 1936, the company, by endorsement attached to the policy, waived the payment of any further premiums.

This waiver of premiums was to continue only so long as the insured was totally disabled, and from time to time in this, as in other cases of waiver of premiums, the company checked up to ascertain whether the disability continued or whether the insured had regained her health, in which latter event she would be required again to commence the payment of premiums.

In December of 1938 the defendant company had information that Louise Rice, the insured, and the respondent herein, had been discharged from the hospital where, during the waiver of premiums period she had been confined, and was able to resume her duties; whereupon, the appellant sent Mr. A. N. Walker, its investigator, to check into the exact condition of the insured's health.

The respondent was not at that time living with Mrs. Liester, her mother, and the beneficiary of the policy as aforesaid, but Mr. Walker went to Mrs. Liester's home for the purpose of ascertaining where Mrs. Rice lived. Mrs. Liester was not at home when he first went there, she being at her work in a cotton mill, but from a conversation had with another of her daughters, Mr. Walker returned to Mrs. Liester's home on the afternoon of the same day (December 21, 1938) and found her lying across the bed resting. There is a conflict in the testimony as to who broached the subject of Mr. Walker undertaking to procure for Mrs. Liester a cash settlement of the policy which she was carrying on the life of Mrs. Rice, but this is more or less immaterial. The fact remains that Mrs. Liester and Mr. Walker discussed if appellant company would be interested in paying some amount at that time and cancelling the policy, and Mrs. Liester, a witness for respondent, testified that Mr. Walker told her that it didn't make "two cents difference to the Company" if she cashed it or didn't; that it was a matter for her to decide; that she had thought about cashing it and reached the conclusion to take a cash settlement if appellant company would make such a settlement. She told him that she had had sickness in the family, needed the money and needed it badly, which was the truth. At that time Mr. Walker told her that Mrs. Rice would have to sign the release.

Respondent's cause of action is predicated upon the alleged statements of Mr. Walker to respondent when he took up with her on December 22, 1938, the matter of signing a release and allowing her mother to make a cash settlement, respondent stating in her complaint that she signed the release and agreed to the cancellation of the policy and the payment of the consideration therefor to her mother upon the false and fraudulent statement of Mr. Walker to her that her mother had returned from her work sick, was then confined to her bed with a serious illness and would have to go to the hospital unless she received prompt rest and medical care, and that if she would sign the release and agree to the cancellation of the policy he could secure some money on the policy, which would prevent respondent's mother from being confined in a hospital; and upon a trial of the case she testified in effect to the said allegations of her complaint. Incidentally it should be here mentioned that respondent, during the course of her testimony, and while referring to the conversation she had with Mr. Walker, stated: "I had a card from my mother the day before

[13 S.E.2d 495]

and she told me she was working every day and was--" when she was interrupted by an objection by one of appellant's counsel, and the court ruled that she had to confine her testimony to what she knew of her own knowledge. Mr. Walker denied stating to Mrs. Rice, the respondent, anything other than the conditions as he actually found them at the home of Mrs. Liester and the statements which he termed a "message" from Mrs. Liester to Mrs. Rice as to her desire to get a cash settlement out of the policy.

Following the execution of the release by respondent, the consideration for which was the payment to respondent's mother of the sum of $100, Mr. Walker returned to the home of Mrs. Liester, there procured her signature on the release and paid to her the sum of $100, which was at that time, and has been at all times since, a satisfactory settlement insofar as Mrs. Liester was and is concerned.

On the afternoon of the day respondent signed the release (December 22, 1938) her husband came to her home and she told him about the settlement and says she became dissatisfied thereabout for the reason that she learned that the statements made to her by Mr. Walker which induced her to consent to sign the release and consent to the cancellation of the policy on her life was untrue, and wrote a letter on December 23, 1938, to the manager of appellant at Greenville, S. C, forbidding appellant to make any settlement with her mother "due to the fact that Mr. Walker, your companys agent made false statements in regards to my mother's health." However, when this letter was delivered to the district agent or manager of appellant in Greenville, S. C., the money had already been paid to Mrs. Liester. Upon the return of Mr. Walker from a short Christmas holiday and upon learning of this letter, he went to see Mrs. Liester and offered to return the release and reinstate the policy if she was not entirely satisfied with the settlement; provided, of course, the $100 was refunded to appellant company, but Mrs. Liester did not so desire, expressing her satisfaction with the settlement.

On the 10th day of...