Summary
In Sovereign Camp, an insurer sought to avoid a double indemnity provision in a life insurance policy because the insured died in an auto accident when on authorized liberty while in the military.
Summary of this case from Floyd v. Ohio General Ins. Co.Opinion
15616
January 24, 1944.
Before A.L. GASTON, J., Hampton County, May, 1943. Affirmed.
Action by Alma M. Smith, against the Sovereign Camp of the Woodmen of the World, a Corporation, upon a Certificate or Policy of Insurance issued by Defendant upon the life of James M. Smith, payable to Plaintiff as Beneficiary, including Claim for "Double Indemnity Benefit" for accidental death, and interest from date of filing of proof of death. Defendant admitted liability for face value of the Policy, and admitted the accidental death of the insured, but denied any liability under the double indemnity benefit provision on the ground that insured came to his death while he was in the naval service of the United States in time of war. By consent, a jury trial was waived and the case was heard by Judge Gaston on an agreed Statement of Facts. Judge Gaston's decree awarded judgment for the face value of the Policy and for the Double Indemnity Benefit, with interest and costs. Defendant appeals.
The Circuit Decree of Judge Gaston, ordered to be reported, follows:
This case was heard by me at Allendale on April 25, 1943, while I was presiding in the 14th Circuit during the Spring term of Court. The case was ably argued by counsel for both parties and written briefs were also filed by them. The matter comes before me upon the record, which includes the pleadings, the policy, and a written stipulation as the evidence in the case, or as the agreement of the facts which are not in dispute or controversy.
By the stipulation it is admitted: "that James M. Smith enlisted in the U.S. Naval Reserves on September 9, 1941, and was called and inducted September 22, 1941, and stationed at Charleston, South Carolina, where he stayed until December 13, 1941, being at that time a fireman, third class, in the United States Navy, where and when he was granted a furlough or leave of absence (Authorized liberty), and that he left Charleston on such furlough on the afternoon of December 13, 1941, and arrived in Beaufort at about 7:00 o'clock P.M., on that date. Beaufort was his home town where his parents lived. It is admitted that he stayed at his home until 8:30 o'clock, when, in company with one of his young friends, he was riding for pleasure in an automobile en route from the Log Cabin Inn to the Ribault Inn in the automobile, when the automobile, driven by William T. Prowitt, was in collision with an electric light pole, resulting in injury to James M. Smith, the collision occurring at about 11:30 o'clock P.M., December 13, 1941. He was from the scene of the wreck carried to a doctor's office, and thence to a hospital, and died from the injuries on the 19th day of December, 1941, as a result of and in consequence of bodily injury effected solely through external, violent and accidental means, of which there was visible contusions or wounds on the exterior of the body, and as a direct result thereof.
"It is admitted that proof of death was duly filed with the defendant on December 31, 1941.
"It is admitted that at the time of the injury the plaintiff's intestate was not performing any military duty, but it is admitted that he was at that time a member of the Navy of the United States being at the time on leave of absence (authorized liberty) as stated above."
By the complaint judgment is sought for $2,000.00 with interest from 19 December, 1941, at six per cent., being the full amount of the policy, under the double indemnity clause, claimed for accidental death. By the answer the defendant denies liability under the double indemnity clause and admits liability for $1,002.68 as the full amount due, and pleads the terms of the policy exemptions provisions.
The validity of the military exemption clause in the policy has been sustained by the decisions of this State. McQueen v. Sov. Camp W.O.W., 115 S.C. 411, 106 S.E., 32; Watson v. Sov. Camp W.O.W., 116 S.C. 360, 108 S.E., 145, 147.
In the Watson case, above cited, the Supreme Court of this State held that such requirement could be waived, and that the case should be submitted to the jury on the issue of waiver of the requirement that an additional premium should be paid to prevent or avoid the enforcement of the exemption provision of the policy. In a very full dissenting opinion Mr. Justice Cothran goes into the reasonableness of the terms of the policy in regard to a risk not assumed by the company. He also says that he could not conceive of a fairer proposition than that contained in the policy. "With this increased hazard thrust upon them, the company had the right, and it was its duty, to make provision against it." However, the policy before the Court in the McQueen and Watson cases was more explicit and less all embracing in its terms. "The [policy] contract notified the insured that the company stood for liability upon every contingency except his death in the service upon foreign soil, when the war was actually being waged, and where, of course, the hazard was greatest." Such was the reasoning of Mr. Justice Cothran to uphold the strict enforcement of the exemption provision which was to the effect that if the insured should die outside the limits of the United States while serving in the army or navy as an officer or enlisted man, the amount due should be less and only a nominal sum, unless the insured pay an additional premium assessment. It would seem, therefore, that our Supreme Court looked somewhat to the fairness of the terms of the policy and to the increased risk to the danger of death on foreign soil, showing that the mere status of the insured was not the only consideration to be passed upon to uphold the validity of the exemption features of the policy contract.
By the same reasoning now, the facts in the case at bar do not show any increase of risk, nor any difference of status of the young soldier who was killed in an automobile wreck while at his own home on a furlough from the service. To hold that the terms of the policy apply where there is no connection whatsoever between the accident and the enlistment in the army or other military service would seem to be an unfair discrimination not based on sound reason and not actually expressed in the policy. Of course, the language of the policy must be resorted to in order to ascertain its meaning or correct interpretation. All that I wish to say is that if the Court does refer to the fairness of the terms of the policy to sustain the exemption, then it is not contrary to judicial reasoning to seek aid in the interpretation of the present policy terms to inquire into its fairness if for no other reason than the belief that the defendant company would not and does not intend to work an unjust hardship upon its members. After all is said, however, only the plain wording of the exemption clause, or any other pertinent language of the policy contract, are to be considered in order to construe its meaning and application. Our sister State of Georgia has held that the language employed in the policy then before the Court and "the words used make death, not in, but as the result of, military or naval service in time of war, or caused by war. or some act incident thereto, the condition which would free the company from this double indemnity. This language is pregnant with cause as the exemption from liability in this matter." Johnson v. Mutual Life Ins. Co. of N.Y., 154 Ga. 653, 115 S.E., 14, 16. The Georgia case also states at length the rule that in case of doubt the construction most favorable to the insured will be adopted. Policies are issued upon printed forms prepared by experts, and will be strictly construed against the insurance company, who prepares the contract, when there is a fair and reasonable doubt as to the meaning of the provisions before the Court. This is the South Carolina rule. Beckett v. Jefferson Standard, etc., Co., 165 S.C. 481, 164 S.E., 130.
In regard to the meaning of the military service provision of the policy and for a discussion of the cases pro and con, see Volume 29, American Jurisprudence, Paragraph 911, and cases cited.
Also, see 137 A.L.R., 1275, for copious notes. It would serve no good purpose to repeat here each case in point, nor to quote from other cases, when such cases are available to the profession with access to almost any law library equipped with the modern set of reports, digests, annotations, and other books which the profession is called upon to buy and own.
Our own Court in the recent case of West v. Palmetto State Life Ins. Co., 25 S.E.2d 475, 477, holds that the words "in time of war," have a definite legal application and meaning.
A short reference to some of the case in point may be made. In the case of Long v. St. Joseph Life Ins. Co., Mo. App., 225 S.W. 106, the Court held the insurer liable for the face of the policy. The clause under construction there was, "while engaged in any military or naval service in time of war." The insured died from influenza while at home on a furlough.
The rider attached to the policy in the case at bar says: "The double indemnity benefits hereby provided shall not be payable — while the member is in the military or naval service in time of war."
The insured was injured and killed while on a furlough or leave of absence from military service.
Webster's New International Dictionary defines "Furlough" as follows: "1. Leave of absence; especially, leave given to a soldier or, sometimes, a government official or employee, to be absent from service for a certain time; also the document granting leave of absence."
If, therefore, the insured was granted leave of absence or a furlough, which is admitted, for that period of time he is not in service, and hence he is covered by the policy.
The case of Atkinson v. Indiana Nat. Life Ins. Co., 76 Ind. App. 344, 132 N.E. 263, transferred to Supreme Court, 1924, 194 Ind. 563, 143 N.E. 629, holds that a furlough is a leave given to an officer or soldier to be absent from service for a certain time, and that the military exemption clause is not applicable and that the death of the soldier while on furlough by collision of his autocycle and automobile was not a risk of military service within the meaning of the policy provision. See also Rex Health Accident Ins. Co. v. Pettiford, 74 Ind. App. 507, 129 N.E. 248.
The Iowa Court holds that the insurer is liable where the death occurred at a point remote from the war zone or the high seas, at a time when the occupation of the soldier was not more hazardous than at the time the policy was issued. In that case the death of the insured occurred while he was at Jefferson Barracks, Mo., in the military service, from the accidental discharge of a gun in the hands of a fellow soldier. Boatwright v. American Life Ins. Co., 191 Iowa 253, 180 N.W. 321, 11 A.L.R., 1085. The same rule of construction is applied by the Arkansas Court in the cases of Benham v. American Cent. Life Ins. Co., 142 Ark. 612, 217 S.W. 462; and Nutt v. Security Life Ins. Co., 142 Ark. 29, 218 S.W. 675.
In common parlance the word "service" carries with it the idea of performance. Webster's New International Dictionary in defining "Service" among its definitions, says: "Duty performed in, or appropriate to, any office or charge; official function; specifically, military or naval duty; performance of duties of a soldier as, to see service; hence, a branch of employment with an organization of its own, especially under a government; as, the diplomatic service."
When the expression "in the military or naval service" is used, I think that such carries with it the idea of being in the performance of a military or naval duty. Especially is this construction reasonable in view of the other provisions of the policy under consideration having to do with exempting the company from liability for military and naval risks, such as the provision of the policy itself under the total and permanent disability clause which provides as follows: "The total and permanent disability benefit shall not apply if the disability of the member shall result (Italics added) from self-inflicted injury, while sane or insane, or from military or naval service in time of war or from engaging as a passenger or otherwise in aviation or aeronautics."
Similarly, other provisions of the rider itself are as follows:
"This benefit does not cover self-destruction, whether sane or insane; the disappearance of the member; death which shall result from riding or being in or upon any aerial or submarine device or conveyance; death caused (Italics added) directly or indirectly, wholly or in part, by war, riot or insurrection, or any act incident thereto, either on land or water; death resulting (Italics added) from any violation of law, or from injury intentionally inflicted by another, or from any military or naval service; death resulting from relief service in time of war; nor death caused or contributed to directly or indirectly wholly or partially by bodily or mental infirmity, ptomaines, monoxide poisoning, disease in any form, or bacterial infections other than infections occurring simultaneously with and in consequence of an accidental cut or wound. The Society shall have the right and opportunity to examine the body and make an autopsy."
"The double indemnity benefits hereby provided shall not be payable, if the certificate shall have become paid up for any reduced amount, or while it is continued in force under the extended protection provision, or upon the allowance of any disability benefit thereunder, or while the member is in the military or naval service in time of war, and shall not be restored, after discharge from such service, except upon evidence of good health satisfactory to the Society."
It seems fair to say that there must be some causal connection between the accident and the military service, under and in contemplation of all of the pertinent language of the policy.
Therefore, it is ordered and adjudged that the plaintiff have judgment for the face of the policy and for the double indemnity, being a total of Two Thousand and Two and 68/100 ($2,002.68) Dollars, with interest and costs.
Be it so ordered.
Mr. Hugh O. Hanna, of Hampton, S.C. Counsel for Appellant, cites: As to Construction of Insurance Policy Contracts: 199 S.C. 325, 19 S.E.2d 463, 466. As to validity of "War Clause" in Policy: 115 S.C. 411, 106 S.E. 32; 116 S.C. 360, 108 S.E. 145; 137 A.L.R., 1263-1285, Footnote on p. 1275 and Annotations on p. 1263; 7 A.L.R., 378; 15 A.L.R., 1270, Syllabus; 189 F., 761; 222 P., 750.
Mr. George Warren, of Hampton, S.C. Counsel for Respondent, cites: As to Construction of Insurance Policy Contracts — "War Clauses": (La.), 180 N.W., 321, 19 A.L.R., 109; 29 A.J., 158; 143 N.E., 629; 11 A.L.R., 1101; (Ark.), 218 S.W. 675: 140 Ark. 612, 217 S.W. 462; (Mo.), 225 S.W. 106; (Ind.), 129 N.E. 248, 249; 29 A.J., p. 695, par. 911.
January 24, 1944.
I regret that I find myself in disagreement with Mr. Acting Associate Justice Stoll in a very small particular of this case. I think the judgment below should be affirmed without modification.
In the first place, contest as to interest on the amount of the "face of the policy" was not decided by the lower Court (it is not mentioned in the apparently exhaustive decree), so it is not a proper subject for review by this Court. But considering it anyway, I do not think it was error to allow such interest.
The case was tried upon a stipulation which contained the following recitals with respect to the alleged tender or tenders:
"On January 23, 1942, defendant issued its check to plaintiff Alma M. Smith in the sum of $1002.68 as payment in full under said policy. Said check had the usual provisions printed on the back thereof stating that the acceptance of same would be payment in full.
"That this check was tendered to plaintiff but that on February 9, 1942, by letter of Calhoun Thomas, attorney for plaintiff, this check was returned with the statement that it should be in the amount of $2,002.68 as per letter of Mr. Thomas.
"Defendant then cancelled the stipulation on back of said check and returned the same to their agent, J.D. Parler, on March 12, 1942, with instructions to deliver the said check to plaintiff and to advise her that she could receive, endorse and cash said check without prejudice to her claim for additional indemnity on account of the member's accidental death. This was done but plaintiff on March 18, 1942, refused to accept the check under such conditions and returned the same to defendant.
"That after suit was started herein defendant through its attorney Hugh O. Hanna, Esq., again tendered to George Warren, Esq., the said check for $1002.68 or offered to pay the said amount, the same to be without prejudice to the plaintiff to her claim for additional indemnity as claimed in the complaint, and the same to be without prejudice to the rights of the defendant, which offer was refused by plaintiff."
The attempted tender to plaintiff's present counsel was after suit was commenced and under the circumstances stated was of no effect for the money was not paid into Court. Manning v. Brandon Corporation, 163 S.C. 178, 161 S.E. 405. So it must be determined whether the attempts at payment to plaintiff, herself, of the amount admitted by defendant to be due under the policy were sufficient to stop the running of interest on this unquestioned part of the obligation. Consideration requires immediate dismissal of the first attempt for it was by check conditioned in full payment. Left for consideration is only the second attempted payment, the first and third having been eliminated.
The double indemnity provision, although set forth in a so-called "supplementary agreement," was in fact a part of the policy. The agreement so recites, that it was "attached to and made a part of" it, and plainly states further: "This supplementary agreement shall be deemed a part of the said certificate * * *." Thus upon the accidental death of the insured, within the terms of the policy including the supplementary agreement, the obligation of the insurer was to pay the beneficiary the full sum of two thousand dollars; that amount was the face of the policy and the use of that term to describe the insurer's liability under the policy for natural death is for convenience rather than of legal significance. Plaintiff did not sue on two causes of action; the complaint was properly based on one, the insurance policy; and appellant made no objection to this form of the complaint, but filed answer to it. The latter fortifies the conclusion that when defendant theretofore tendered its bank check in attempted payment of about one-half of its obligation under the policy there was no duty on the part of plaintiff to accept it, so it was, I think, without legal effect.
Respondent's counsel says that he declined to accept it when it was offered him because of the inclusion of the extra $2.68 (refund of overpaid premium) which he did not understand and was afraid it might affect the right of his client to recover from the insurer the latter's full liability under the policy. It was, I think, as if a debtor offered to pay a part of a note or account. Not offering to pay all, there could be no tender as such is known to the law. Incidentally, appellant will lose nothing if held liable for interest, as I think it should be, because it has all the while had the use of plaintiff's money under the policy and still has until the judgment is paid. It is for this use that interest should be allowed.
The old case of Ryan v. Baldrick, 3 McCord, 498, cited by Mr. Justice Stoll, has no bearing upon the instant problem and what was said there relating at all to it was dictum. Incidentally though, the opinion contains a most interesting thumbnail sketch of the world history of interest. The learned author, Justice Abraham Nott of the Constitutional Court of South Carolina, was first educated for the Christian ministry in his native New England, afterward entering the law and becoming an eminent Judge of this, his adopted, State, and meanwhile having represented it in the United States Congress. 1 O'Neall's Bench and Bar of S.C. 121.
All that Judge Nott said in the Ryan case touching the instant question was: "A tender of the principal, the absence of the party, the intervention of war, etc., are good causes for suspending the payment of interest in any case. But it is not a matter of discretion. It must depend upon some legal principle." But in this case, as in that, there was no "tender of principal"; the attempts were to pay about half of the principal, defendant at the same time denying liability for the other half of its policy obligation.
Under the answer in this action, which admitted liability for payment of the so-called "face amount" of the policy, plaintiff might have obtained an order of the Court directing payment thereof forthwith by defendant under subsection (11) of Section 584 of the Code. See the footnote thereunder, page 431 of Volume 1 of the Code of 1942, citing for this proposition Pilot Life Insurance Company v. Habis, 4 Cir., 90 F.2d 842, which seems to have been a case somewhat similar to this. But plaintiff in this action did not pursue that course, which she was not obliged to do. Had she done so, there appears to be no reason why the defendant would not have had to pay legal interest from the date of the order to the date of its satisfaction. Such an order is in the nature of a judgment insofar as its enforcement is concerned, expressly under the statute, and, as stated, its non-payment must entail liability for legal interest to date of payment.
The following quotations are from 26 R.C.L., Tender, page 639: "A tender to be sufficient in law must be in amount at least equal to the amount due; and an offer of a part of the amount due does not avail as a tender." And page 646: "A tender to have the effect of stopping interest must be kept good, that is it must be continuing. Using the money after refusal by the creditor to receive it destroys this effect of a tender, and the debtor is chargeable with interest as though no tender had been made."
To the same effect is 62 C.J., 660, 661, as follows: "Nothing short of an offer of everything that the creditor is entitled to receive is sufficient, and a debtor must at his peril tender the entire sum due, including all necessary expenses incurred or damages suffered by the creditor by reason of the default of the debtor, and a mistake in tendering an amount less than the sum due is the misfortune of the tenderer, and the position of the parties remains the same as if no tender had been made." And 33 C.J., 243: "Inasmuch as the tender must be as broad as the obligation, it is very generally held that a tender of a less sum than is actually due will not prevent the running of interest thereafter on the whole principal."
But we need not go farther than the precedents of the decisions of our own Courts for law upholding the justice of the allowance of interest under the facts of this case. Brief excerpts from several leading cases follow:
The late lamented Chief Justice Bonham of this court, then a trial Judge, heard on Circuit the case of Keese v. Parnell, 132 S.C. 360, 128 S.E. 172; Id., 134 S.C. 207, 132 S.E. 620, 622; upon appeal, his decree was adopted by his Court as the most of its judgment. From it the following is quoted:
"In the view I take of this case it is unnecessary to consider the effect of the refusal of the tender, that is to say, whether such refusal destroyed the lien of the mortgage, stopped the running of interest and prevents the recovery of costs. Undeniably that was the effect of the refusal of a valid tender, even though the tender was not kept not the money paid into court, ever since the decision of the case of Salinas v. Ellis, 26 S.C. 337, 2 S.E. 121, until the decision in the case of Reynolds v. Price, 88 S.C. 525, 533, 71 S.E. 51, which overruled Salinas v. Ellis. That case laid down the rule, which is affirmed in Barron v. Thompson, 111 S.C. 339, 97 S.E. 840, to this effect: 'The weight of authority and reason favors the rule that to have the effect of stopping the running of interest, or of discharging the lien of the mortgage, the tender must be kept good; and if made the basis of a plea of tender, or for affirmative relief the money must be brought into Court' — citing 27 Cyc., 1409; 1 Jones on Mortg., § 893.
"It is admitted in the present case that the tender was not kept good, and the money is not brought into court, therefore the plea of tender must fail of the effect of destroying the lien of the plaintiff's mortgages, and of stopping the running of interest and the recovery of costs."
Mr. Justice Cothran delivered the opinion of the Court in Tolbert v. Fouche, 129 S.C. 338, 123 S.E. 859, 861, and said: "The trial judge correctly charged the jury, to which no exception has been taken, that a tender to be sufficient must be of the amount due and must be kept good. Upon both of these grounds the undisputed evidence shows that the tender was insufficient."
In the almost century-old case of Baker v. Gasque, 3 Strob., 25, the justly famous Justice John Belton O'Neall (his valuable "Bench and Bar" is referred to above) spoke for the Court in his usual forceful style, in part as follows: "Nothing short of an offer to fully perform the contract, evidenced by a tender of everything the plaintiff is entitled to, is enough. In Boyden v. Moore, Administrator, 5 Mass. [365], 369, Parsons, Chief Justice, states the law as I have always understood, and never supposed it to be doubted, 'that the defendant must take care, at his peril, to tender enough, and if he does not, and if the plaintiff replies, that there is more due than is tendered, which is traversed, the issue will be against the defendant, and it will be the duty of the jury to assess for the plaintiff, the sum due on the promise; and if it be not covered by the money tendered, he will have judgment for the balance.'"
All of the law which I have found upon the point is to the same effect. Neither of the counsel cited a single authority in their briefs upon it and it is fair to assume that if the matter was argued at all before the Circuit Judge (and the opposite is indicated because he made no reference to it in his rather long decree), it must have been argued as here, upon generalities unsupported by the citation of any legal authority. (I am indebted to the authors of an unusually fine brief in another recent appeal for this gem of thought and expression, attributed to "a wise old Frenchman": "All generalities are false, including this one." I am confident that the counsel in this case are tolerant enough to take this taunt.)
As stated at the outset, appellant really has no right to a decision of the question by this Court because of lack of such in the lower Court. If it felt aggrieved by the ignoring of it there, timely motion should have been made to open the judgment on that account and for an amendment of the decree expressly adjudicating the question. Then appeal would have been in order.
Because of (1) the stated condition of the record before this Court and (2) the conclusiveness of precedent and authority upon the point, I can see it only one way, that is, that the judgment of the Circuit Court should be affirmed.
MR. CHIEF JUSTICE BAKER, MR. ASSOCIATE JUSTICE FISHBURNE, and CIRCUIT JUDGE WM. H. GRIMBALL, ACTING ASSOCIATE JUSTICE, concur.
This cause was heard by Hon. A.L. Gaston, presiding Judge of the Fourteenth Circuit, on an agreed statement of facts.
From his decree the Woodmen of the World Insurance Society has appealed, and by its exceptions raise two questions for determination by this Court.
First. Was there error in not finding and holding that the insured was at the time of his death in the Naval Service of the United States in time of war, and that thereby, under the express provisions of the double indemnity benefit agreement, the plaintiff was barred from recovery of the additional one thousand dollars?
Second. In view of the tender of payment of the $1,002.68, the face of the amount of the policy, plus unearned premiums, was there error in allowing interest on said amount?
The first question must be answered in the negative. The decree of Judge Gaston is clear and convincing. We are in harmony with the views therein expressed and adopt it as the opinion of this Court, except as herein modified. Let it be reported.
The second question must be answered in the affirmative. Tender of $1,002.68, the face of the policy, plus unearned premiums, having been made to respondent without prejudice to respondent's claim for the double indemnity benefits, it was error to allow interest on said amount.
Appellant's tender of the sum of $1,002.68 was absolute and unconditional and without prejudice to the proper adjudication of the question of double indemnity under the insurance policy.
Respondent refused to accept same and in his complaint seeks to recover said $1,002.68 with interest.
As far back as Ryan v. Baldrick, 3 McCord, 498, it has been the rule in this State that an absolute and unconditional tender of the amount due suspends the running of interest.
Interest on the sum of $1,002.68 was error. Interest on the sum of $1,000.00 under the double indemnity provision of the insurance policy was proper.
Judgment should be affirmed except as herein modified.
MR. CHIEF JUSTICE BAKER, MESSRS. ASSOCIATE JUSTICES FISHBURNE and STUKES and CIRCUIT JUDGE WM. H. GRIMBALL, ACTING ASSOCIATE JUSTICE, concur in part and dissent in part.