Souba v. Life Ins. Co. of Virginia

• Court: South Carolina Supreme Court
• Writing for the Court: FISHBURNE, Justice.
• Citation: Souba v. Life Ins. Co. of Virginia, 187 S.C. 311, 197 S.E. 826 (S.C. 1938)
• Decision Date: 27 June 1938
• Docket Number: 14708.
• Parties: SOUBA v. LIFE INS. CO. OF VIRGINIA.

197 S.E. 826

187 S.C. 311

SOUBA v. LIFE INS. CO. OF VIRGINIA.

No. 14708.

Supreme Court of South Carolina

June 27, 1938

Appeal from Common Pleas Circuit Court of Charleston County; J Henry Johnson, Judge.

Action by Mrs. Mamie Souba against the Life Insurance Company of Virginia for damages for fraud and deceit on ground that defendant falsely represented to her that she had been substituted as beneficiary in a life policy. From a judgment for defendant, plaintiff appeals.

Affirmed.

J. C Long and O. T. Wallace, both of Charleston, for appellant.

Hagood Rivers, & Young, of Charleston, for respondent.

FISHBURNE Justice.

On March 20, 1928, the defendant (respondent here) issued to Elmer Souba an insurance policy on his life, in the sum of $1,000, which provided for the payment of a premium of $14.89 semi-annually. Melvern Souba, a son of the insured by a former wife, was designated as beneficiary in the policy. In the same year that the policy was issued, the insured married Mamie Souba, the plaintiff in this action. This action was commenced by Mamie Souba against the respondent for damages based upon fraud and deceit. The plaintiff (appellant here) alleged in brief that the respondent, through its agents, falsely represented to her that she had been substituted as beneficiary, and that relying upon these representations, she paid the last two premiums falling due prior to the death of her husband, the insured. While the policy was in force, the insured, Elmer Souba, died on August 15, 1933, following which the plaintiff learned that no change in the beneficiary had been made by the respondent. This action followed.

The case has a lengthy history, which entails a somewhat detailed examination of the facts.

The testimony for the plaintiff tends to show that Mr. Souba paid the first two semi-annual premiums, and then decided to let the policy lapse. In order to keep the policy in force, Mrs. Souba, who owned and operated a small country store at Ten Mile, on the Summerville highway, continued the payment of premiums from her own funds. Realizing, sometime prior to October, 1932, that she was keeping alive a policy from which she could derive no benefit, it was agreed between her and Mr. Souba that the beneficiary should be changed so that in the event of his death his funeral expenses would be paid from the proceeds of the policy. In pursuance of this agreement, he filed an application with the company, through its soliciting and collecting agent, H. L. Ridgeway, requesting that the beneficiary be changed to "funeral expenses and Melvern Souba." The policy accompanied the application for the purpose of having the change of beneficiary endorsed thereon. The company refused to make this change, because it was not willing to make "funeral expenses" a beneficiary.

Thereafter, and before the return of the policy, the plaintiff says that Elmer Souba signed another application, on the company's form, requesting that she be made sole beneficiary. The plaintiff and Mr. Ridgeway, the agent of the company who dealt with Mrs. Souba in this transaction, unite in testifying that this application was given to him, and the agent says that he turned it in to the Charleston office. The company disclaims any knowledge of this second application for a change of beneficiary, and denies that it has any record of ever having received it.

The policy was returned to Mrs. Souba on April 18, 1933, but shortly before this, Mr. Ridgeway, who also collected weekly premiums on industrial policies held by the plaintiff with the company, was transferred to another route. He was succeeded by a Mr. Smith, another agent of the respondent.

It is not disputed that Mr. Smith returned the policy to Mrs. Souba and collected from her the premium of $14.89 thereon on April 18, 1933, and gave her a receipt therefor. Mrs. Souba says that at the time the policy was returned to her, two letters, folded in it, were handed to her by Smith. One was a letter from the Home Office addressed to the District Manager, dated April 17, 1933, reading as follows:

"The Life Insurance Company of Virginia

Organized 1871

Home Office

Richmond, Virginia

April 17, 1933.

In Re: Policy 159 594-Souba

Mr. J. V. Murray, District Manager, Charleston, S.C.

Dear Sir: As requested in your letter of April 14th, we are returning Form 629 and the policy herewith.

Yours truly,

ER/fw Actuary."

"Enc.

The other letter, signed by H. L. Ridgway dated April 18, 1933, reads as follows:

The Life Insurance Company of Virginia,

Home Office: Richmond, Va.

Office of District Manager at ------

April 18th, 1933.

Dear Mrs. Souba: I am returning the policy by Mr. Smith as he now has charge of your part of my route; The Company has changed the policy and made you the beneficiary on its records as desired by you and Mr. Souba, so it is now all right to pay the premiums to Mr. Smith your new agent. I am glad that the company has finally straightened this matter out.

Yours truly,

H. L. Ridgeway."

According to the plaintiff, when the policy was delivered to her, she examined it, and called the attention of Mr. Smith, the agent, to the fact that the beneficiary was unchanged, and that her name did not appear on the policy as beneficiary; whereupon, Mr. Smith told her, "Everything was all right; that it had been changed in the office." She says that she believed his statement and relied upon the letter from Mr. Ridgeway which accompanied the policy, and, upon the faith of Smith's oral statement and the letter from Ridgeway she paid the premium. Smith in his testimony denies that he either told Mrs. Souba that she was the beneficiary, or that he handed her the Ridgeway letter. He disclaimed any knowledge of the Ridgeway letter. The agent, Ridgeway, testified that he did not examine the policy to discover if the beneficiary had been changed. He said that in writing the letter, he merely assumed that the change had been effected. The insurance company has launched a serious attack upon the genuineness of this letter. We shall advert to this later.

This action was brought in the Civil and Criminal Court of Charleston County, and was tried before Honorable Paul M. MacMillan and a jury on May 6, 1936, resulting in a verdict for the plaintiff for actual and punitive damages. Thereafter the defendant moved for a new trial upon after discovered evidence, such evidence tending to show that the Ridgeway letter of April 18, 1933, to which we have referred, could not have been written on its purported date, but was written subsequent to that date. In support of this contention the respondent made a showing that the plates from which this stationery was printed were not in existence until after 1933. We should state here that this letter was written upon a letterhead furnished to its agents by the insurance company, but it appears that the upper portion of the letterhead, which contained the names of the officers of the company, had been torn away.

The defendant contended before the Civil and Criminal Court on its motion for a new trial, and contends here, that the letter was a mutilated document, from which the name of Robert Henley, Vice President, had been torn; that Henley had not been elected vice president of the company until September, 1934; that the metal plate from which the letterhead was multigraphed had not been manufactured and delivered to the Insurance Company until January, 1935, and that it therefore followed that the letter in question could not have been written when it was dated, on April 18, 1933.

The motion for a new trial was granted, and the cause was then retried on December 3, 1936, and resulted in a verdict for the plaintiff for the sum of $14.89, actual damages, and $500, punitive damages.

Thereafter, the company again moved for a new trial, which was refused by the Judge of the civil and criminal court of Charleston County. An appeal was taken by the respondent to the Court of Common Pleas, and that Court reversed the trial Court, held that the respondent's motion for a directed verdict should have been granted, and ordered that a verdict and judgment for the defendant be entered.

The plaintiff prosecutes this appeal from this latter order.

The Circuit Court order is based upon the undisputed testimony, which is referred to therein, to the effect that the plaintiff, when the policy of insurance was returned to her, read it; knew that she was not the named beneficiary therein, and was therefore not deceived. In support of this holding, adverse to the plaintiff, reliance is placed upon the following cases: Hood v. Life & Cas. Ins. Co. of Tenn., 173 S.C. 139, 175 S.E. 76, and Frierson v. Inter-Ocean Cas. Co., 168 S.C. 178, 167 S.E. 232. Upon the strength of these cases as applied to the stated testimony, the Circuit Court decided that the civil and criminal court of Charleston County committed error in refusing the motions made by the defendant for a nonsuit, for a directed verdict and for a new trial, and held that a verdict, as already stated, should have been directed for the defendant, upon the ground that the plaintiff failed to establish a cause of action for fraud.

We have carefully examined the cases referred to in the Circuit order, and have reached the conclusion that they are controlling here.

In Hood v. Life & Casualty Ins. Co., supra, an...