Roberts v. National Benefit Life Ins. Co.

May 7, 1929. The opinion of the Court was delivered by This was an action instituted in the County Court of Richland County by Lizzie Roberts, the beneficiary on an insurance policy taken with the National Benefit Life Insurance Company of Washington, D.C., by one Gabriel Howard, or Gabella Howard, on the life of Gabella Howard. The action was tried in the Richland County Court before Hon. M.S. Whaley and a jury, and the verdict resulted in favor of the plaintiff for the sum of $500, the amount claimed under said policy.

From the testimony in the case it appears that the said Gabella Howard, the deceased, was approached by an agent of the insurance company with the end in view of taking a policy with the company, and, after several visits, she consented to take said policy and the application was duly taken by the agent in accordance with the custom of the company. The agent did not testify at the trial of the case, but the examining physician of the defendant company did testify, and his medical certificate was introduced in evidence. After examination of the physician, the applicant was accepted, the policy issued, and the premiums duly paid thereon from the date of the issuance of the policy on the 9th day of March, 1925, to the date of the death of the insured on October 28, 1926.

The exceptions are 5 in number, but do not include as many questions. Each exception raises several issues which, in the case of most of the exceptions, are merely restatements of former questions raised. The material questions raised by the exceptions are:

(1) Was Gabriel Howard and Gabella Howard one and the same person?

(2) Was the application for insurance on the part of the deceased obtained by fraudulent representations of such character as to avoid the policy?

(3) Whether or not the beneficiary had an insurable interest in the life of the deceased and if the beneficiary had no insurable interest in the life of the deceased, whether or not the company waived such requirement by its conduct.

(4) Whether or not the county Judge erred in charging the jury on the question of waiver.

There can be no question that under the pleadings in this case as well as under the statement made by appellant's counsel one of the material issues of fact to be submitted to the jury was the question of the identity of the persons. The case was tried on this theory, and there was ample evidence on the part of the plaintiff to submit to the jury on the question of identity. This was a question of fact which, under the decisions of our Court when supported by evidence, will not be disturbed by the appellate Court.

As to the second question, it will be recalled from the testimony that not only was the insured seen personally, by the agent for the company, but was also examined by the company's duly authorized physician. Under the testimony of the plaintiff in this cause, there was no misrepresentation or fraud practiced upon the agent at the time of the taking of the application. The agent was present and saw the insured, and if the condition existed at the time as alleged by defendant, the agent was compelled to have seen it. The rule is well settled in this State that an insurance company is bound by the knowledge of an agent or representative of the company acting within the scope of his authority even though the agent may be actuated at the time by fraud. Reardon v. Insurance Company, 79 S.C. 526,60 S.E., 1106; Madden Co. v. Insurance Co., 70 S.C. 295,49 S.E., 855; Fludd v. Assurance Soc., 75 S.C. 315, 55 S.E., 762; Rogers v. Insurance Co., 135 S.C. 89, 133 S.E., 215, 45 A.L.R., 1172.

But even if, as the appellant contends, the insured was afflicted with disease or physical disability, the doctor of the company made an examination of the applicant and reported that he found the applicant a good risk. Under the decisions of our Court such testimony is evidence either that the disease or affliction did not exist or that the doctor knew of the same and waived the condition. Johnsonv. Metropolitan Life Insurance Co., 111 S.C. 398,98 S.E., 140; Gamble v. Insurance Co., 95 S.C. 196,78 S.E., 875; Baker v. Metropolitan Life Insurance Co., 106 S.C. 419,91 S.E., 324; Wingo v. Insurance Co., 112 S.C. 139,99 S.E., 436.

The third question involves the question of the insurable interest of the beneficiary in the life of the deceased. Under the testimony in the case, which is not disputed, it appears that the insured took the policy herself and named the plaintiff, Lizzie Roberts, who is designated as her cousin, as the beneficiary thereunder. It is well settled in this State, that a person may take out insurance on his or her life and name any one as the beneficiary. Quotation from the case of Crosswell v. Indemnity Association,51 S.C. 103, 28 S.E., 200, is sufficient on this question. "It is firmly established that insurance procured by one person on the life of another, in which the party effecting the insurance has no interest, is void as a wager contract against public policy, which condemns gambling speculation upon human life. But it is also well settled that a person may insure his own life and make the policy payable to whomsoever he chooses, even though the beneficiary has no insurable interest in his life, provided the transaction is bona fide, and not a mere cover to evade the law against wager policies."

The appellant, however, claims that because of the fact that there is some testimony that Lizzie Roberts paid some of the premiums, this contract should be declared void and the beneficiary not allowed to collect the amount due under the policy. Regardless of whether the policy was taken by the insured or the beneficiary, the company knew at the time of the issuance of the policy and the acceptance of the application, that the beneficiary was the cousin of the insured and was at the time staying in the house with the insured. The premiums were accepted for more than a year and a half with this knowledge in the possession of the company. The insurance was solicited by the agent of the company who had full knowledge or at least opportunity to investigate all phases of the relationship between the parties. As has been well stated by this Court in a late case, that of Rogers v.Atlantic Life Insurance Co., 135 S.C. 89, 133 S.E., 215, 45 A.L.R., 1172:

"Again: If W.S. Rogers had no insurable interest in the life of his brother, there was testimony at the trial of the case tending to show that Tiller, the general agent of the company, some time before the policy was issued, went to W.S. Rogers, and suggested to him that he take out a policy of insurance on the life of his brother, James A. Rogers; that W.S. Rogers, acting on Tiller's suggestions, saw his brother about the matter, who consented and agreed that the policy be taken out; that Tiller had full knowledge that W. S. Rogers was to be the ultimate beneficiary under the policy and was to pay the premiums thereon; that Tiller actually delivered the policy to W.S. Rogers and collected the premium from him; and that the whole transaction, including the application for the policy, the issuance of same to the estate of James A. Rogers, and its subsequent assignment to W.S. Rogers, was carried out under the directions and according to the instructions of the agent Tiller."

See, also, Hankinson v. Piedmont Mutual Insurance Co.,80 S.C. 392, 61 S.E., 905, and Huestess v. South AtlanticLife Insurance Co., 88 S.C. 31, 70 S.E., 403.

It was the duty of the County Judge to charge the jury on the question of waiver, and his charge was fair, impartial, and explicit on this issue. There was a question as to whether or not the agent waived any alleged physical disability of the insured, as to whether or not the doctor waived any alleged physical disability of the insured, whether or not the company waived the alleged lack of insurable interest in the beneficiary, and as to whether or not the conduct of the company in the entire transaction did not constitute waiver under the law. This was an issue raised by the testimony in the cause and was properly submitted to the jury under the charge of the County Judge.

All exceptions taken are without merit and are overruled, and the judgment of the County Court is hereby affirmed.