Swygert v. Durham Life Ins. Co., 17148

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: OXNER; STUKES
• Citation: 92 S.E.2d 478,229 S.C. 199
• Parties: Fannie SWYGERT, Respondent, v. DURHAM LIFE INSURANCE COMPANY, Appellant.
• Docket Number: No. 17148,17148
• Decision Date: 24 April 1956

Page 478

92 S.E.2d 478 229 S.C. 199 Fannie SWYGERT, Respondent,
v.
DURHAM LIFE INSURANCE COMPANY, Appellant. No. 17148. Supreme Court of South Carolina. April 24, 1956.

Page 479

[229 S.C. 200] John W. Crews, Columbia, for appellant.

[229 S.C. 201] C. T. Graydon, A. T. Graydon, Columbia, for respondent.

OXNER, Justice.

This is a suit on a life insurance policy for $1,000, issued by the Durham Life Insurance Company to Charles B. Hornsby on May 1, 1942. The insured died in January, 1955 and the Company paid the amount of the policy to his wife whom it considered as the lawfully designated beneficiary. Thereafter plaintiff, Mrs. Fannie Swygert, claiming that she was the beneficiary, brought this action against the Company to recover the face amount of the policy

Page 480

with interest. The case was tried in April, 1955. At the conclusion of plaintiff's testimony, the Company unsuccessfully moved for a nonsuit, and upon conclusion of all the testimony both plaintiff and defendant moved for a directed verdict. The Court determined that the facts were undisputed and the [229 S.C. 202] issue solely one of law, and withdrew the case from the jury. After considering briefs of counsel, the trial Judge in an order filed on June 21, 1955, found that plaintiff was the lawful beneficiary and awarded her judgment for $1,000 with interest.

When the policy was issued, insured's mother, Mittie Hornsby, was designated as the beneficiary. The right to change the beneficiary was reserved in the policy in the following terms: 'With the consent of the Company, the Insured may from time to time while this policy is in force change the beneficiary by request to the Home Office, upon the Company's prescribed form, accompanied by this policy, such change to take effect only upon enforsement thereon.'

On August 24, 1942, at the request of the insured, the beneficiary was changed from his mother to plaintiff, Mrs. Fannie Swygert, whose relationship in the application for change of beneficiary was described as 'intended wife.' The change was duly endorsed by the Company on the policy, which was shortly thereafter delivered to the plaintiff.

Plaintiff was a widow residing in Columbia and the insured was single. For some years prior to 1942, they had been going together and finally became engaged. The insured gave her an engagement ring. The engagement was broken about 1947. The plaintiff never returned the ring and gave it to her daughter. She kept the policy and testified that insured never asked her to return it but, on the contrary, two or three years prior to his death told her that he was paying the premiums and for her to keep the policy.

On August 31, 1948, the insured applied on a form furnished by the Company for a new certificate of insurance, in which he stated:

'I hereby declare that the above Policy has been lost or destroyed, and because of that fact I hereby apply for a Certificate of Insurance.

'I agree that should the original Policy be found that the Certificate of Insurance will be null and void, and that I will [229 S.C. 203] immediately return the Certificate of Insurance to the Company for cancellation.'

A new certificate was duly issued and delivered to the insured. On June 27, 1949, insured applied on the prescribed form for a change of beneficiary from the plaintiff, Fannie Swygert, to one Lillian B. Adams. The requested change was made and endorsed on the back of the certificate. During February, 1954, he requested that the beneficiary be changed from Lillian B. Adams to Gertrude Hornsby, whom he had married. This change was likewise made by the Company and endorsed on the back of the certificate.

Plaintiff testified that four or five days after learning of the death of the insured, she called the Columbia office of the Durham Life Insurance Company and stated that the policy was in her possession. The person to whom she talked replied that he had a check on his desk for the amount of the policy which he was mailing to insured's wife, and requested plaintiff to mail the policy to him. She did not do so and was still in possession of the policy when this action was instituted. It is conceded that all premiums were paid by the insured.

It is now well established under our decisions that where a right to change the beneficiary has been reserved to the insured in the policy, the named beneficiary, during the lifetime of the insured, has not a vested right or interest but a mere expectancy, and the complete control of the policy remains in the insured. Davis v. Acacia Mutual Life Insurance Co., 177 S.C. 321, 181 S.E. 12; Shuler v. Equitable Life Assur. Soc. of United States, 184 S.C. 485, 193 S.E. 46. Although the beneficiary has only an inchoate right, the general rule is that unless waived, an insured in making a

Page 481

change of beneficiary must substantially comply with the method prescribed in the policy. Wannamaker v. Stroman, 167 S.C. 484, 166 S.E. 621; Wilkie v. Philadelphia Life Ins. Co., 187 S.C. 382, 197 S.E. 375. Of course, upon the death of the insured, the rights of the beneficiary[229 S.C. 204] become vested. Babb v. Paul Revere Life Ins. Co., 224 S.C. 1, 77 S.E.2d 267.

It is equally well settled that where, as here, in order to effect a change of beneficiary the policy must be delivered to the Company for endorsement, such requirement is primarily for the protection of the Company and may be waived by it during the lifetime of the insured. 'The obvious purpose of the production of a policy and indorsement thereon of change of beneficiary is to...