Welch v. New York Life Ins. Co.

December 7, 1936. The opinion of the Court was delivered by This action was brought to recover both actual and punitive damages for the alleged wrongful and fraudulent refusal of the defendant to deliver to the plaintiff two single premium endowment policies in the face amount of $500.00 each, or to return to him $1,000.00, the amount of the premiums paid therefor to an agent of the company. The defendant admitted receipt of the application for the insurance, but alleged that Welch failed to pay to it the premiums, the settlement for which, as provided by the terms of the application and of the policies, could be made only by bank draft or certified check, and that the plaintiff had not employed either of these modes of payment. It therefore denied all liability.

On trial of the case, motions for a non-suit and for a directed verdict were refused, and the jury found for the plaintiff actual damages in the sum of $1,000.00, with interest, and $950.00 punitive damages. A new trial was thereafter refused, and the defendant appealed.

Some of the undisputed facts are as follows: Mary H. Olney, an agent of the defendant company, conferred with the plaintiff relative to the investment of certain moneys which he had received from the company in settlement of a death loss under a policy on the life of his son. Pursuant to such conference, the plaintiff, on October 1, 1933, executed an application for certain endowment policies; and on the following day, October 2d, there was paid to Mrs. Olney by the wife of the insured the sum of $1,000.00 in cash, representing the single premium on two such policies for $500.00 each. On October 19, 1933, Mrs. Welch also paid Mrs. Olney $1,000.00 in cash, representing the premium on two additional endowment policies for $500 each, and Mrs. Olney duly issued her receipt therefor. One week thereafter, Mrs. Olney delivered the two policies for which the $1,000.00 premium was paid on October 2, 1933. There is no contention about this. But the other two policies, for which Mrs. Olney was paid the premium of $1,000.00 in cash on October 19, 1933, were never delivered. Mrs. Welch testified that when the matter was being investigated, Mrs. Olney had stated to her that she had deposited the $1,000.00 that she had received on October 19, and had subsequently withdrawn it and lost it.

We adopt, as a portion of our opinion, the decree of Judge Johnson refusing the motion for a new trial, and direct that it be incorporated in the permanent report of the case. The decision might well rest here, but owing to the importance of the matters involved, the writer will add some further discussion.

The real issue in the case is this: Was the question of waiver properly submitted to the jury? The answer to this is, yes.

The defense, as we have indicated, is the provision in the application and policy providing that payment of the premium should be made only by bank draft or certified check to the order of New York Life Insurance Company in exchange for its official receipt signed by one of the designated executive officers, and that none but an executive officer had the right to make or discharge contracts or to waive any of the company's rights or requirements. The record for appeal discloses, however, that the entire matter of buying the $2,000.00 worth of endowment policies was a transaction between the plaintiff and the defendant represented by itsagent, Mrs. Olney. The plaintiff made both payments in cash to Mrs. Olney and took her receipt therefor. Two of the policies were actually delivered to the plaintiff by the company thus completing one-half of the transaction; both payments of the premium were made in the same manner. In view of these facts, it is urged by plaintiff that Judge Johnson committed no error in submitting the question of waiver to the jury.

Information that an agent had before the issuance of a policy is imputed to the principal and makes waiver of certain provisions of the policy a jury question. Readen v. StateMutual Life Insurance Company, 79 S.C. 526,60 S.E., 1106. This was a case as to the health of the insured at the time the policy was issued.

Where insurance policy contained a provision that the policy should be void if the property insured was removed from the place where it was when the policy was issued, where property was removed to another place, the fact that the agent collected premiums with knowledge that the property had been moved made an issue for the jury on the matter of waiver. Powell v. Continental Insurance Co.,97 S. Ct., 375, 81 S.E., 654.

Whether insurer, accepting payment of overdue premiums with interest without requiring proof of insurability, intended to waive forfeiture of life policy, held for jury, notwithstanding the insurer's agent did not know that insured was ill. Harvey v. Jefferson Standard Life Ins. Co., 165 S.C. 427,164 S.E., 6.

Payment of initial premium may be waived, which waiver may be implied from unconditional delivery of the policy.Wright v. New England, etc., Ins. Co., 165 S.C. 190,163 S.E., 133.

Waiver may be express or implied, Farmers' Merchants'Bank v. Peoples' First National Bank ofCharleston, 161 S.C. 286, 159 S.E., 617.

"Waiver has been defined to be an implied consent by a failure to object." 67 C.J., 307.

Waiver may be shown by a course of acts and conduct, and also by words or declarations, oral or written; and "may be inferred from circumstances." 67 C.J., 309.

As to Mrs. Olney's being the agent of the defendant, see Sections 1911, 7970 and 7971 of Code of 1932.

"The person or persons to whom payment of premiums may or must be made may be controlled by the provisions of the policy, but such provisions when for the benefit of the company may be waived by it, and payment to one apparently authorized to receive it may be good even where it was not made in conformity with the terms of the policy." 32 C.J., 1198.

In Fender v. New York Life Insurance Co., 158 S.C. 331,155 S.E., 577, it was held:

1. That a provision relating to health may be waived.

2. This may be done by soliciting agent though the policy stipulated that this could only be done by executive officer.

Any provision as to forfeiture in an insurance policy may be waived and also an insurer may waive the provision relating to the manner of waiver by an agent. Gandy v. Orient Insurance Co., 52 S.C. 224,29 S.E., 655.

Three important cases on the subject of waiver are: Madden Co. v. Phoenix Insurance Co., 70 S.C. 295,49 S.E., 855; McMillan Son v. Insurance Company of NorthAmerica, 78 S.C. 433, 58 S.E., 1020, 1135; Cobb SealShoe Store v. Aetna Insurance Co., 78 S.C. 388,58 S.E., 1099. These are all well known and have been reaffirmed time and again by this Court. This Court has held that a nonwaiver provision in a policy may be waived like any other provision.

The power of the local agent to withhold a policy involves the power to deliver it; there is no escape from that conclusion. McLaurin v. Mutual Life Ins.Co., 115 S.C. 59, 104 S.E., 327.

Conditions precedent may be waived. Fender v. NewYork Insurance Co., 158 S.C. 331, 338,155 S.E., 577; Rogers v. Atlantic Life Insurance Co., 135 S.C. 89, 133 S.E., 215, 45 A.L.R., 1172; Jennings v. CloverleafLife Casualty Co et al., 146 S.C. 41, 143 S.E., 668.

An insurance company may not set up forfeiture on account of facts known to the agent of the company to be existing at the time of the making of the contract.Huestess v. South Atlantic Life Insurance Co., 88 S.C. 31,70 S.E., 403.

The following cases are in point on the matter of waiver:Galphin v. Pioneer Life Insurance Co., 157 S.C. 469,154 S.E., 855; Pearlstine v. Phoenix Insurance Co., 74 S.C. 246,54 S.E., 372; Gilreath v. Security Life Trust Co.,170 S.C. 309, 170 S.E., 445; Robert v. Sovereign Camp,W.O.W., 166 S.C. 393, 164 S.E., 893; Tolbert v. SouthernMutual Life Insurance Co., 175 S.C. 338,179 S.E., 308; Edwards v. Grand Lodge K.P. of S.C., 166 S.C. 445,165 S.E., 181; Harman v. Bankers' Reserve Life Co.,170 S.C. 329, 170 S.E., 451; Thomason v. CommonwealthLife Ins. Co., 168 S.C. 435, 167 S.E., 684; Cope v. JeffersonStandard Life Ins. Co., 134 S.C. 532, 133 S.E., 440;Clark et al. v. Southeastern Life Ins. Co., 101 S.C. 249,85 S.E., 407; Cauthen v. Hartford Life Ins. Co., 80 S.C. 264,61 S.E., 428; Webber v. Southern Life Trust Co.,103 S.C. 284, 88 S.E., 124.

"Payment of the premium to an agent of the company is payment to the company, even if the agent fails to turn over to the company the premium received by him, and a notice printed on the back of a policy that payment to an agent will not be deemed valid unless a receipt signed by certain specified officers of the company is received at the time does not limit the rule." 32 C.J. 1132.

Mrs. Olney, a witness put up by the defendant, testified on the cross examination:

"Q. Mrs. Olney, how long have you been working for the New York Life Insurance Company? A. I have been working with the New York Life Insurance Company since February, 1922, if I am not mistaken.

"Q. And during that time you wrote a large amount of business? A. Yes, sir; for this section of the country.

"Q. And you collected cash and sent that cash in to the company in your business, did you not? A. Yes, sir; I did. * * *

"Q. But you received from Mrs. Welch two thousand dollars? A. Yes, sir.

"Q. And you did not deliver but one thousand dollars? A. No, sir; that was all. * * *

"Q. And she paid it to you as agent for the New York Life Insurance Company? A. Yes, sir."

The application was signed on Sunday, and an arrangement was made to go to the bank the next day and get the money; Mr. Olney carried Mrs. Welch in her car; and it was at the suggestion of Mrs. Olney that the amount was divided into two payments and that cash was used.

It appears from the testimony of Mrs. Olney that whatever was done was done by her and that she was the actor all the way through.

It has been held in a number of cases that an agent of an insurance company is a general agent in the sense of the statutes and cases in our State.

The appeal presents several other questions, but they are all properly disposed of by Judge Johnson in his order refusing a new trial.

All exceptions are overruled, and the judgment of the Circuit Court is affirmed.

MR. CHIEF JUSTICE STABLER and MR. JUSTICE CARTER concur.

MESSRS. JUSTICES BONHAM and BAKER dissent.