Fender v. New York Life Insurance

The opinion of the Court was delivered by Mr. Justice Beease. *333 This action was brought by the respondent to recover the sum of $1,500.00 and interest thereon, alleged to be due to her as the named beneficiary of a life insurance policy, issued and delivered by the appellant on the life of Arthur E. Fender, the insured, who was the husband of the respondent. The appellant admitted the issuance and delivery of the policy to Fender and the death of the insured. It defended the action because, as it alleged, the insured had violated certain conditions precedent of the policy, set forth in the application upon which the same was issued and delivered, and on the ground that there was fraud on the part of the insured in obtaining the insurance. The alleged facts, upon which the defenses of the appellant were based, are referred to and discussed hereinafter. The respondent sought to answer the defenses of the appellant upon the theory that there had been a waiver of the grounds of forfeiture on the part of the appellant. Perhaps the position of the respondent was more in the nature of an estoppel than one of waiver; but both the parties have regarded the issue, raised by the respondent, as one of waiver, and we shall follow them in that respect. While there are distinguishing features between “waiver” and “estoppel,” waiver belongs to the family of estoppel, and the terms are frequently used as meaning the same thing in the law of insurance contracts. 40 Cyc., 255. The trial of the case in the Court of Common Pleas of Beaufort County, before Honorable T. S. Sease, presiding Judge, and a jury, resulted in a verdict in favor of the respondent for the full sum demanded by her in her complaint, less the amount due on a promissory note of the insured, which the appellant accepted, in payment of the first premium on the policy. Thirty-two jurors were in attendance upon the Court. In impaneling the jury for the trial of the case, the Circuit Judge held that seven of these were not quali *334 fled to serve, six for the reason that they were policyholders of the insurance company, and the seventh because he was a “corresponding agent” of the appellant. By its first exception, appellant contends that this action on- the part of the Court was erroneous, and that it resulted in prejudice to its cause. It appears in the record that the policyholders of the appellant are entitled to certain dividends on their policies, and the amounts of these depend upon the profits and losses incurred by the appellant in the conduct of its business. The duties of the “corresponding agent” of the appellant do not seem to appear in the record, but we assume that he was an employee of the insurance company. In State v. Sharpe, 138 S. C., 58, 135 S. E., 635, 637, we said: “Our Circuit Judges should be very careful to keep off juries persons who are related to the parties, or who, in any manner, have an interest in the result of the cause.” We are now of that same opinion. Perhaps all the jurors, who were held to be disqualified by the Circuit Judge, would have rendered a fair and impartial verdict. It is not necessary now to decide that any of them, especially the policyholders, were not qualified to sit in the case. It is well recognized in this State that questions relating to the fitness of jurors to serve in cases are very much within the discretion of the trial Judge. This Court consistently refuses to reverse a case because of the Judge’s rulings in matters thereabout, unless it plainly appears that there was an abuse of the discretion allowed to the Judge, and that such abuse of discretion may have resulted in harm to the losing party. Following our many precedents, too numerous to cite, we must conclude that there was no prejudicial error to the appellant, as alleged by it in its first exception. The second exception imputes error to the presiding Judge because he refused to direct a verdict in favor of the appellant. The ground upon which it is contended this motion should have been granted is as follows: That the application for the insurance, upon which the policy was issued, con *335 tained as a paid thereof this agreement on the part of Fender, the insured: “That the insurance hereby applied for shall not take effect unless and until the policy is delivered to and received by the applicant and the first premium thereon paid in full during his lifetime, and then only if the applicant has not consulted or been treated by any physician since his medical examination.” The appellant asserts that the uncontradicted testimony showed that Fender, the insured, in violation of the condition precedent, above mentioned, consulted and was treated by a physician after his medical examination without the consent or knowledge of the appellant and thereby the contract of insurance was voided and did not become effective, although issued and delivered to the insured, The exception brings us to a review of the facts, as adduced in the trial, both from the standpoint of the appellant and the respondent. On March 22, 1929, Fender, who lived at Hardeville, applied to J. K. Beach, appellant’s soliciting agent, for a policy of $1,000.00 on his life, naming his wife, the respondent, as the beneficiary. Fender was examined on April 9, 1929, by Dr. E. C. B. Mole, the company’s medical examiner. Following that application and medical examination, the policy applied for was issued and delivered to the insured on or about April 19, 1929. At the time of the delivery of that policy (which we may call the first policy), Fender requested additional insurance in the sum of $1,500.00. That policy (called the second policy, and one which is involved in this suit) was written on April 24, 1929, and forwarded through the Savannah office of the appellant to Beach. On April 27, 1929, Beach called at Fender’s home to deliver the second policy, but he found Fender was not feeling well and declined to deliver the policy at that time. A few days later, Fender wrote Beach that he was well. In the afternoon of May 14, 1929, Beach called again at Fender’s home and *336 delivered the second policy. Within a few hours, in fact, perhaps within little more than one hour, Fender suddenly died. The appellant paid the first policy, but declined to make payment of the second. As a part of the application and the report of the medical examination, the insured made the following certificate: “On behalf of myself and of every person who shall have or claim any interest in any insurance made hereunder, I declare that I have carefully read each and all of the above answers, that they are each written as made by me, and that each of them is full, complete and true, and agree that the company believing them to be true shall rely and act upon them.” At the time of his request for the issuance of the second policy, Fender signed a “supplemental application” to the appellant for the issuance of the additional insurance, in the following form: “Supplemental to my application for insurance dated the 22nd day of March, 1929, I hereby apply for $1,500.00 additional insurance on the ordinary life plan, to take effect as of April 16, 1929, and I reiterate and confirm all the agreements, statements, representations and answers contained in my said original application and agree that said original application shall form a part of said additional insurance contract. I further warrant and declare that no change has occurred in my health or insurability since the date of my said original application.” The appellant alleged, and the proof shows, that on the 2nd or 3rd day of May, 1929, subsequent to the date on which Fender made his supplemental application for insurance, and a few days prior to the date of the delivery of the policy sued on, Fender visited and consulted Dr. Charles Usher of Savannah, Ga., on account of illness, and that the physician at that time diagnosed Fender’s illness as influenza; that he advised Fender of that fact and prescribed for his illness. *337 The appellant claimed, and sought to establish, that it had no knowledge or information as to the visit of Fender to Dr. Usher, and the treatment of the insured by the physL cian. And it contended that the failure of the insured to disclose these facts was in violation of his agreement with the company, and “that the policy'was issued and delivered through false and fraudulent representations.” The respondent endeavored to establish by testimony her theory that Beach,' the agent, did have knowledge of the visit to, and treatment by, Dr. Usher, at the time of the delivery of the policy, and on account of the conduct and actions of the agent, when fully advised of the facts, the appellant had waived, or was estopped to assert, any forfeiti^e. The visit of the insured to Dr. Usher and the treatment he received were conclusively established. Dr. Usher so testified. Mrs. Fender, the respondent, was with her husband at the time, and her testimony frankly agreed with that of the physician. The conflict in the testimony relates to the information imparted to the agent, Mr. Beach. He testified that about 3 :45 p. m. on May 14, 1929, he visited Fender’s home for the purpose of delivering the policy; that Fender, a section foreman of a railroad company, was not at home at the time, but came in from his work a few minutes later; that he talked to Fender, and ate supper with him, Fender eating a very hearty meal; that he delivered the policy sued on, took Fender’s note for the first premium, and a few minutes after supper left the home; that Fender did not at any time inform him in any manner that he had consulted a doctor since he took out the insurance. On his cross examination, Mr. Beach admitted that on the occasion of his first visit to Fender’s home to deliver the policy, he found the insured, a young man, “lying down with his clothes on”; that he told Fender that he had better take some medicine. He did not recall advising Fender to *338 go and see a doctor, but he admitted that he might have done this. The witness admitted that Mrs. Fender and Mrs. Fender’s mother, Mrs. Bailey, were present upon the occasion of his visit by him to Fender’s home. He admitted the presence of Mrs. Fender at Fender’s home upon the occasion of the visit when he ate supper with Fender and delivered the policy. Mrs. Bailey and Mrs. Fender both testified to the effect that upon the first visit of Beach to deliver the policy, when Fender was a little sick, that the agent declined to deliver the policy at that time, told Fender that he would come back and make the delivery when Fender got well, and that Beach said, as related by Mrs. Bailey: “You had better go over to Savannah to see a doctor.” Mrs. Fender swore that Beach advised her husband “to go over and see Dr. Usher.” Mrs. Fender further testified that on the day the policy was delivered, soon after Beach came to her home, and prior to the return of the insured to the home, she told Beach that her husband was getting along well; that he had been over to see Dr. Charles Usher, and got some medicine from him; that he took some of the medicine prescribed by Dr. Usher and the following Monday Fender went back to work, She also swore that soon after coming in from his work, her husband told Beach of his visit to Dr. Usher, and that as a result of the physician’s treatment, he had- been able to go back to his work. The testimony of Dr. Usher was to the effect that, in all likelihood, the insured died from a heart trouble known as cardiac, the after effects of influenza; but he did not and could not, say positively that this was the cause of his death.' Dr. Usher did not see the insured after he visited his office. Dr. Mole, the company’s medical examiner, who got to Fender soon after he died, testified that the insured was one of the healthiest specimens of physical manhood that he had ever examined, and while he could not say positively what *339 was the cause of death, it seemed to be his opinion that he died from acute indigestion. Appellant’s third exception complains of error on the part of the Circuit Judge in refusing to direct a verdict in its favor, on the ground that the policy stated that no provision, representation, or condition of the policy might be waived other than by an executive officer of the company; and that the uncontradicted testimony showed that the soliciting agent, Beach, was not such an executive officer, and that any act or conduct of his did not result in a waiver on the part of the appellant as to the written statement of the insured that he had not consulted or been treated by any phj'-sician since' his medical examination. The fourth exception imputes error to the trial Judge because of his instruction to the jury that even the non-waiver clause, to which the third exception referred, could be waived. The appellant has argued its second, third, and fourth exceptions together. We will dispose of them in a like manner. The holdings of the Circuit Judge against the appellant were correct under previous decisions of this Court. The insured, as well as the insurer, may waive a condition precedent to the delivery of a policy which is solely for his benefit. Going v. Insurance Co., 58 S. C., 201, 36 S. E., 556. "While dissenting on other grounds to the judgment of the Court, Mr. Justice Woods conceded in Huestess v. Insurance Co., 88 S. C., 31, 70 S. E., 403, 408: “The rule has been laid down in this State that an insurance company cannot set up forfeiture on account of facts known by the agent of the company to be existing at the time of making the contracts.” The recent cases of Rogers v. Insurance Co., 135 S. C., 89, 133 S. E., 215, 45 A. L. R., 1172, and Jennings v. Insurance Co., 146 S. C., 41, 143 S. E., *340 668, support the proposition that a condition precedent may be waived. There are numerous other decisions in line with these cases — too many of them for us now to refer to. But the appellant strongly urges, and mainly rests its case upon the proposition, that the soliciting agent, Beach, had no authority to waive the stipulation in the policy that waiver could only be made by an executive officer of the company. The law, as recognized by this Court, however, is absolutely against appellant’s contention. Mr. Justice Jones, speaking for the Court in Gandy v. Insurance Co., 52 S. C., 224, 29 S. E., 655, 656, said this: “An insurance contract, like any other contract, may be altered by the contracting parties, and the insurer may, of course, waive any provision for forfeiture therein. It may also waive the provision relating to the manner or form of waiver by its agents, since this clause has no greater sanctity than any other part of the instrument.” A case practically on all fours with the case at bar in many respects was that of McLaurin v. Mutual Life Insurance Co., 115 S. C., 59, 104 S. E., 327, 328. The policy in that case contained this agreement: “That only the president, vice president, a second vice president, a secretary, or the treasurer of the company (1) can make, modify, or discharge contracts, or (2) waive any of the company’s rights or requirements, and that none of these acts can be done by the agent taking the application.” (The numerals are supplied.) Mr. Justice Gage, for this Court, in referring to the quoted stipulation, said this: “ * * * the president, the vice president, and the secretary cannot solicit, or collect, or deliver; they must commit that to others, and along with it the discretions we have adverted to. * * * The power in the local agent to withhold the policy involves the power to deliver it; there is no escape from that conclusion. *341 “But the appellant says, even though the local agent should have concluded that the applicant was in good health, yet, if the fact be the contrary, then the policy never operated. The parties intended to make a contract, and that involved the doing of everything necessary to carry it into operation, to wit, the acceptance of the applicant as a person in good health. They never intended to leave open that one essential element of the contract, when the parties dealt fairly one with the other. It is plain, therefore, that upon the facts it is not necessarily a case of waiver or of estoppel but a case where the local agents, in the exercise of the powers lodged in them, accepted the premium and delivered the policy. That act binds their principal, the defendant.” The appellant places its reliance upon the recent case of Cooley v. Metropolitan Life Insurance Co., 153 S. C., 280, 150 S. E., 793, 795, and Welch v. Insurance Co., 124 S. C., 492, 117 S. E., 720. We are unable to see how either of these cases is of any benefit to it. The opinion of Mr. Justice Cothran in the Cooley case, depended upon so strongly by the appellant, cannot be regarded as authority, because the other members of the Court only concurred in the result thereof. But Mr. Justice Cothran, in his opinion there delivered, recognized that a condition precedent to liability on the part of an insurance company could be waived. The learned jurist quoted with approval the following from 37 C. J., 403: “A stipulation or agreement by the company and an applicant that the policy of insurance shall not take effect or be binding on the company unless the first premium is paid while the applicant is alive and in good or sound health is valid and will be given effect according to its terms; it is a condition precedent to liability on the part of the company and a performance or waiver thereof is necessary in order to render the contract of insurance effective and enforceable, unless the case falls within the operation of an incontestable clause.” *342 The nonsuit granted by the Circuit Judge in the Welch case, on the ground that three conditions precedent had not been performed, was sustained by this Court. But, as we read that case, there was nothing whatever to show any waiver, or estoppel, as to the performance of those conditions on the part of the insurance company. The judgment of this Court is that the judgment below be affirmed. Messrs. Justices Stabler and Carter and Mr. Acting Associate Justice Mendel L. Smith concur. Mr. Chief Justice Watts did not participate.