Stanton v. Equitable Life Assurance Society

The opinion of the Court was delivered by Mr. Justice Watts. This opinion was written by the late Mr. Justice Fraser and concurred in by me. I now adopt it as my opinion. The brief in this case is very large. There are 18 exceptions, but the decision of one question determines the whole, case. The facts are undisputed and few. In October, 1917, James Alexander Stanton applied to the appellant insurance company for a policy of life insurance in the sum of $25,000, and sent with his application a check to cover the first premium. There was no concealment of anything. Stanton was in good health and his physical condition was excellent. It was frankly stated that for some years Stanton had been in the habit of getting on periodical drunks and would continue drinking for several days, sometimes as long as 10 days; that he had inherited some financial troubles, but the financial trouble was over, and he had not taken any intoxicants for a year before the application of 1917. The reply to the first application was: “Oct. 29, 1917. “Mr. P. G. Alston, McColl, S. C. — -Dear Mr. Alston: Re Application James A. Stanton. We regret to advise that the society is unwilling to issue a policy to Mr. Stanton at this time. They state, however, that after the lapse of ■one year they shall be pleased to give the case further consideration. “We inclose herewith the society’s check for $939 representing the premium under this application, and would request that you kindly take up the conditional receipt and return, or have Mr. Stanton sign the inclosed release. “Sincerely yours, Managers.” *399 At the lapse of the year in October, 1918, the home office of the company in New York wrote to its general office in Rock Hill, S. C., to open negotiations with Mr. Stanton. The South Carolina agents took up the matter with Mr. Stanton promptly, and took another application for the same amount of insurance, typewritten in the Rock Hill office. Mr. Stanton signed this application at the solicitation of the local agent, inspired by the home office. Mr. Stanton again put up his check for the first premium. The check was cashed at the general office at Rock Hill, S. C., and Mr. Stanton was given the following receipt: “Received of J. A. Stanton, No. C. 43128, nine hundred and eighty-five and 50/100 dollars, the first annual premium on proposed insurance for $25,000 on the life of James A. Stanton, for which the above-mentioned application is this day made to the Equitable Life. Assurance Society of the United States. Insurance subject to the térms and conditions of the policy contract shall take effect as of the date of this receipt, provided the applicant is on this date, in the opinion of the society’s authorized officers in New York, an insurable risk under its rules, and the application is otherwise acceptable on the plan and for the amount and at the rate of premium applied for; otherwise, the payment evidenced by this receipt shall be returned on demand and the surrender of this receipt. “Dated at Tatum, S-'C., September 18, 1918. “P. G. Alston, Agent.” This second application was refused. Mr. Stanton took the “flu,” so prevalent at that time, "and died before he heard from his application. The application was marked refused before the death of Mr. Stanton, but it was delayed in transit and never reached him. The company offered to return the premium, but the administratrix refused to receive it or to execute a release. This suit was brought for the amount of the policy applied for. *400 The answer denied that there was a contract of insurance, and also denied that Mr. Stanton was an insurable risk in 1918. There was no evidence that Mr. Stanton was not an insurable risk in 1918, other than his liability before 1917; so the only question is, Was there a contract of insurance ? If there was a contract of insurance, the premium has been paid and the insured is dead, and there is only one thing to do: Affirm the judgment. If there was no contract of insurance, then the judgment must be reversed. The undisputed facts show that in 1917 a full investigation was made and all the facts were known. With full knowledge of the facts up to that time, the application was not refused as claimed by the appellant, but merely postponed for a year. With full knowledge of the facts, the insurance agent offered to take up1 the application in 1918. This was at the suggestion of the home office. This offer w;as on condition, of course. The company has not attempted to show a failure to comply with the conditions. Dr. Albert T. Post, a medical director at the home office, testified: “Q. Your consideration of the case disclosed no other ground for rejection, save the intemperate use of alcoholic beverages, that was all? A. Yes. “Q. That was all? A. That was all. “Q. Outside of that the applicant was a first-class risk, and, had it not been for the disclosure of the excessive indulgence in alcoholic liquors, you would have recommended him? A.. Yes; I would have recommended the case in all other respects with the exception of his habits of intemperance.” Mr. W. G. Schelker, assistant secretary, wrote: “We advise that this application was not rejected at the home office on account of anything occurring subsequent to the submission of the application as the society was not aware of any other change in the physical condition of the *401 applicant. This applicant was declined as, in the opinion of the society, from the use of intoxicants, he was such as to make him other than a standard risk.” There was not a word of testimony that the deceased had taken a single drink of intoxicant since his previous application in 1917. There was evidence that the applicant had not taken a drink of intoxicants since 1917. Knowing all of the facts, the company induced him to apply in 1918, took his money, gave him a receipt declaring the applicant insured from the date of the receipt, subject to the terms and conditions of the company. If there was no contract at all, why state that the insurance should take effect from the date of the receipt which was also the date of the. payment of the premium? It is very manifest that a nonsuit could not have been granted, and still more clear that a verdict could not have been directed. There was evidence to show that the application for insurance, signed by Mr. Stanton in 1918, was prepared in the Rock Hill office, and that the Rock Hill office was under the control of the home office, and the company took Mr. Stanton’s money with a knowledge of all the facts. It is claimed that there was no waiver. The company rejected the application when they knew all the facts upon which they based their offer in 1918. Did they waive them? That was at least a question for the jury. « II. Appellant alleges error in allowing Mrs. Stanton to testify as to a purchase of land made by Mr. Stanton during the probation period between the two applications. This was not error, as it was responsive to the question of damages from the negligence set up in the complaint. III. Error is alleged in charging that life insurance is a business affected with public interest. It has not been, shown that this was prejudicial. It in no way affected the case as to the making of the contract waivers. IV. Error is alleged in charging: *402 “If the insurance company saw fit to intrust the delivering of this notice to its various agents instead of the customary channels of communication; the error being that same is a charge on the facts.” There is certainly no charge on the facts here. V. The next error alleged is in charging: “I charge you that if you find from the facts that the defendant, when it declined Stanton for a year in 1917.” Appellants certainly cannot complain of this. The appellant’s officers had written: “After one year shall have elapsed, we shall be glad to give this case further consideration.” This was more favorable to the appellant than the indorsement warranted. VI. The next words complained of are: “That under the terms of this receipt- that the defendant,insurance company, was also- irrevocably bound to give Stanton insurance under the conditions named in the receipt.” His Honor did not charge the jury that the company was bound absolutely to give insurance, but that, if Mr. Stanton conformed to rules of the company, on the day the receipt was given, he was entitled to the insurance. His Honor charged the jury that the application signed by the applicant and the receipt signed by the agent of the company, if they believed the agent of the company signed the receipt, made the contract between the parties, and, as the applicant was bound to take the policy, so the company was bound to give the policy if the applicant measured up to the standard. This was correct. VII. Appellant complains of the use of the term “forfeiture” in the charge to the jury. Technically there was no forfeiture in the case, but it was so clear that his Honor was talking about waiver and estoppel that it was not misleading. Besides this, if his Honor misstated the issues, if was the duty of the appellant to call attention to it. *403 VIII. The last exception complains of a charge that was entirely favorable to the appellant. The judgment appealed from is affirmed. Mr. Acting Associate Justice Purdy concurs m result. Mr. Acting Associate Justice Ramage concurs. Messrs. Justices Cothran and Marion, dissent. Mr. Chiee Justice Gary did not participate.