Deal v. Deal , 91 S.C. 351 ( 1912 )

May 1, 1912. The opinion of the Court was delivered by On a former appeal in this case (87 S.C. 395), it was heard upon the following agreed statement of facts:

"The appeal herein, is from a judgment on a verdict, rendered in favor of the plaintiff-respondent, at the Spring term of the Court of Common Pleas, for Richland county, 1909.

"The plaintiff alleges that Dr. Samuel M. Deal took out an insurance policy, wherein he named his mother, Margaret E. Deal, as beneficiary, and agreed with the insurance company, that in the event of his surviving the endowment period of twenty years, then the amount of the policy should be payable to him, but that in the event of his death, during the endowment period, the said policy should be payable to his mother, if she were then living, otherwise to his executors or administrators.

"In the application for the policy, and in the policy, itself the insured reserved the right to change the beneficiary, by sending the policy to the home office of the insurance company, at Newark, N.J., with his written request for a change of beneficiary, so that the proper endorsement might be made by the company on the policy.

"At the time of taking out the insurance policy, Dr. Deal was unmarried and subsequently married, and thereafter as claimed by the plaintiff, executed the assignment of the policy set out in the complaint, and sent the said assignment to the home office of the company, but did not, however, as claimed by the defendants-appellants, send the policy to Newark, N.J., for the purpose of having the change of beneficiary noted thereon.

"Thereafter Dr. Deal died, and the insurance company, not recognizing the attempted assignment, paid the proceeds thereof to the defendant, Margaret E. Deal, the beneficiary, under the policy, who had gotten possession of the policy, and made up proof of death.

"The plaintiff-respondent alleged, that not only was she entitled to the proceeds of the policy, by reason of the assignment, and by reason of the fact, that Dr. Deal had orally assigned the same to her, but also alleges, that the defendants-appellants had committed fraud against her, in obtaining the possession of the policy from her; and asked judgment not only for the amount of the policy and interest, but also for five hundred dollars as punitive damages.

"The defendants-appellants deny, both that the plaintiff is entitled to the proceeds of the policy, and that they were guilty of fraud, in obtaining possession of the same, and claim that the defendant, Margaret E. Deal, was under the law, entitled to the proceeds of the policy."

On that appeal, the Court had under consideration the question, "whether his Honor, the presiding Judge, erred in charging the jury, that in order for Dr. Deal, the insured, to avail himself of the privilege of changing the beneficiary, it was not necessary for him to return the policy to the company, with a written request, that the change be endorsed upon it; that he could effect a change of beneficiary, either by a written assignment, or by a delivery of the policy, with the intention of making such change."

The Court ruled, that the policy did not contemplate an assignment by the insured, as the proper mode of changing the beneficiary, and, therefore, that the charge to the jury was erroneous.

The Court, also, had under consideration the question, whether there was error, in refusing the motion for a nonsuit, and in disposing of this question, said, "There was testimony tending to show that the defendant, Mrs. Margaret E. Deal, acknowledged the plaintiff as the beneficiary under the policy, and waived the right to insist upon proof of strict compliance, with the requirements of the policy, as to the change of beneficiary."

After the decision of the Court on the former appeal, the plaintiff amended her complaint, by adding another paragraph, which is as follows:

"That if the defendant, Margaret E. Deal, had a right to insist upon a strict and formal compliance with the provisions of the said policy with reference to the change of beneficiary, such right was distinctly and voluntarily waived and surrendered, by her assuring the plaintiff that the insurance money would be collected for plaintiff's benefit, and thereby obtaining the policy from the plaintiff."

On the last trial of the case, the jury rendered a verdict in favor of the plaintiff for $1,232.28, and this appeal is from the judgment entered thereon.

The appellant's exceptions will be reported.

The first question that will be considered is, whether there was error on the part of his Honor, the presiding Judge, in refusing the motion for a nonsuit.

There was testimony to the effect, that after Dr. S.M. Deal became insured, he married, and was desirous of changing the beneficiary, so as to make the policy payable to his wife, instead of his mother, and consulted the agent of the insurance company, as to the proper mode of making the change. That the agent informed him, that there were two ways of effecting the change, — one by forwarding the policy with a request in writing to make the change, and the other by an assignment of the policy, which was simpler and just as effective. That upon the advice of the agent, the insured pursued the latter method. That it is the custom for the local agents, to attend to the making of such changes. That the assignment and policy were delivered to the local agent, for the purpose of being forwarded to the home office, in order that the change might be made. That the agent forwarded the assignment to the home office through the general agent, but did not send the policy. That the assignment was returned to the agent with the statement, that it would be necessary for the beneficiary to join in the request. That the policy and the assignment were afterwards delivered to Dr. Deal, who delivered the policy to his wife, and died under the belief that the change had been properly made. That although the plaintiff was in possession of the policy, the insurance company refused to pay her, on the ground that it was payable to Mrs. Margaret E. Deal. That Mrs. Margaret E. Deal, knowing these facts, made the following offer, through her agent, Mr. A.M. Deal, that if the plaintiff would let her have the policy, she would collect the money for the plaintiff's benefit, and pay it over to her. That, relying on this assurance, and believing that the defendants were acting in good faith, she surrendered the policy to them.

If there was testimony, tending to show such a consideration, as the law recognizes, for the promise of the defendant, Mrs. Margaret E. Deal, through her agent, Mr. A. M. Deal, that if the plaintiff would let her have the policy, she would collect the money for the benefit of the plaintiff, and pay it over to her, then the motion for the nonsuit was properly refused.

"There are cases to the effect, that in order to support a compromise, in avoidance of litigation, the claim must be an actual one, founded upon a colorable right, about which there is room for honest doubt, and actual dispute, and with some legal or equitable foundation, and not one which is without foundation, and is known to be so, or is in its nature an illegal claim, out of which no cause of action can arise, in favor of the person asserting it. The usual test, however, as to whether a compromise and settlement, is supported by a sufficient consideration, is held to be, not whether the matter in dispute was really doubtful, but whether or not the parties bona fide considered it so, and that the compromise of a disputed claim made bona fide, is upon a sufficient consideration, without regard to whether the claim be in suit or not.

"The law favors the avoidance or settlement of litigation, and compromises in good faith for such purpose, will be sustained, as based upon a sufficient consideration, without regard to the merits of the controversy, or character, or validity of the claims of the parties, and even though a subsequent judicial decision, may show the rights of the parties, to have been different from what they, at the time, supposed. The real consideration which each party receives, under such a compromise, is, according to some authorities, not the sacrifice of the right, but the settlement of the dispute." 8 Cyc. 307-312.

"In order to render valid the compromise of a claim, it is not essential that the matter should be really in doubt. It is sufficient if the parties consider it so far doubtful, as to make it the subject of a compromise. And, after a compromise has been entered into, in good faith, in an action to enforce the satisfaction, the merits of the original controversy cannot be called into question." Enc. of Law 713-714.

These authorities show, that there was ample consideration for the settlement of what, all parties, with the facts before them, then supposed was a doubtful right.

There are numerous other exceptions, covering about twenty pages, but under the view this Court takes of the issues raised by the pleadings, it will not be necessary to consider them in detail, as the questions presented by them, even if erroneously decided by his Honor, the presiding Judge, are not shown to be prejudicial to the rights of the appellants.

The vital questions in the case are, whether the plaintiff and the defendant, Mrs. Margaret E. Deal, entered into the agreement heretofore mentioned; whether such agreement was based upon a sufficient consideration, and whether, if there was a sufficient consideration, the facts constituted waiver. There was no error in the charge in this respect.

Judgment affirmed.

MR. JUSTICE FRASER concurs in the result.

May 1, 1912.