Royster v. Unity Life Ins. Co.

• Decision Date: 03 May 1940
• Docket Number: 15075.
• Citation: 8 S.E.2d 875,193 S.C. 468
• Parties: ROYSTER et al. v. UNITY LIFE INS. CO.
• Court: South Carolina Supreme Court

8 S.E.2d 875

193 S.C. 468

ROYSTER et al. v. UNITY LIFE INS. CO.

No. 15075.

Supreme Court of South Carolina

May 3, 1940

Thomas Cain & Black, of Columbia, for appellants.

James L. Platt, of Kingstree, for respondents.

WM. H GRIMBALL, Acting Associate Justice.

This appeal presents the question of the proper application of the rules of practice pertaining to "discovery".

The issues before this court arise as follows:

The complaint contains five plaintiffs, all of whom allege that they are holders of "contingent endowment certificates" issued by Unity Life Insurance Company. These five plaintiffs allege that they have paid to the insurance company an aggregate of two hundred and ninety-three and 82/100 ($293.82) dollars. They demand the return to them of this sum of money with interest.

These five plaintiffs allege that this action is brought not only on behalf of themselves, but also on behalf of each and every holder of a contingent endowment certificate issued by this insurance company since October 12, 1934, to date and whether said holder resides within the State of South Carolina Georgia or Florida or elsewhere. They allege that the word "plaintiffs" in their complaint includes all living persons who have paid money to this insurance company in consideration for a contingent endowment certificate, whether or not the name, or names, appears in the complaint and any exhibit hereto attached, and also includes the personal representatives, heirs, executors or administrators of persons above described, wherever the context will permit, in cases of lapsed policies, provided said persons or their representatives come in and contribute to the costs of this action. They further allege that it is impractical to set forth in the complaint the names of all plaintiffs and all persons for whose benefit the action is brought, for the reason the number in interest may exceed twenty thousand persons, many of whom have expressed desires to join in this action but whose names, policy numbers and claims are not definitely enough known at the time to be set forth with certainty.

And on behalf of themselves and all of these other persons similarly situated these plaintiffs demand judgment in the sum of one million dollars.

According to the complaint the cause of action against the insurance company arose in the following manner:

Each twenty-five policy holders of the same age were, according to the terms of the contract, to be placed in a group together and these twenty-five persons were to be numbered consecutively from one to twenty-five. On this grouping and on this numbering depended to considerable extent the rights of each one of the insured under the contract.

The complaint further alleges that through the conspiracy and fraud of the insurance company and its officers and agents no attempt has been made to carry out this plan of grouping and numbering; that the groups are not complete; that some groups contain not more than six persons; that they are not classed and numbered according to the terms of the contract.

The answer of the insurance company alleges, inter alia:

That it is a fraternal benefit association organized and existing under the laws of the State of South Carolina, and has at all times complied with the laws of the state; that plaintiffs have no common interest in this case nor any right to file a class action against the defendants, and that no cause of action exists in favor of the plaintiffs, individually or collectively against the defendants, or either of them; that plaintiffs are not now and have not for some time been members in good standing of defendant; that the forms of insurance policies issued by defendant, the type and kind of business engaged in, and the manner of carrying on the business have been duly approved by the Insurance Commissioner for the State of South Carolina; that there has been no misrepresentation or fraud; and that none of the plaintiffs have any right or claim of any kind against the insurance company.

Plaintiffs moved before Honorable Philip H. Stoll, Judge of the Third Circuit, for an order of discovery, which motion was granted in the following order:

"This action is brought by Claude Czar Royster and Rose K. Platt and others whose names are written on a sheet attached to the complaint, on behalf of themselves and all others similarly situated and who shall join the action and contribute to the costs thereof.

"The action before the Court is to require J. R. Hoile, a named defendant, to submit to an examination before trial on behalf of the plaintiffs. The motion seeks an examination and inspection of the books of the corporation for the purpose of obtaining evidence to be used by the plaintiffs to prove the allegations of fraud. On good and sufficient reasons appearing to the Court it is

"Ordered that the Unity Life Insurance Company an...