Opinion
13772
February 13, 1934.
Before WHALEY, J., County Court, Richland, April, 1933. Affirmed.
Action by Marguerite Wise against First National Insurance Company. From orders denying defendant's motion to reopen and vacate a default judgment and extend time to answer, defendant appeals.
The orders of Judge Whaley are as follows:
ORDER OF JUDGE WHALEYOn May 22, 1933, Judge Whaley passed and filed the following order:
The First National Insurance Company moved to reopen the default judgment in this case on the ground of excusable neglect set out in the affidavit of D.M. Winter, Esquire, of the Columbia bar, that the papers were sent to him in time, and due to his inadvertence he failed to answer or notify plaintiff's counsel that he expected to appear for the company until ten days after the time for answering had expired and the day after judgment was entered in this cause.
Judgment was awarded to the plaintiff for the sum of $119.30 of which $73.26 represented disability from January 8 to January 30, 1933, and $50.00 disability from February 23 to March 5, 1933, the difference being accounted for by deduction for premium.
Were this merely a question of inadvertence of counsel and if the Court was satisfied that the defendant would prevail in its defenses on a trial of the case, it would be more inclined to reopen the judgment, but after a full consideration of all the matters before the Court and the possible defenses urged by counsel, the Court is of opinion that the judgment should not be reopened and should be allowed to stand as written.
In view, however, of the strong plea of defendant's counsel that a proper construction of the policy gave the company the absolute option to terminate its liability at the end of any monthly period for which the premium had been paid, and its refusal to accept the premium for the period in which the last illness occurred, the Court leaves open for its own consideration, and not for the consideration of a jury, the sole question of the construction of this policy reserving the right to reduce the judgment in a sum not to exceed $50.00 if the Court concludes, after examination of the policy, that a proper construction thereof will lead to the conclusion that the company has the absolute option to cancel, regardless of the payment of the premium, and has not waived this option or if the Court should conclude that the amount due for the last disability has been miscalculated, also the question as to whether the policy had lapsed.
It is, therefore, ordered and adjudged that the motion be and hereby is refused, except as hereinabove noted.
SECOND ORDER OF JUDGE WHALEYThe matter was heard before Judge Whaley on the 31st day of May, 1933, and the following order was filed June 2, 1933:
This matter came to be heard before me, without a jury, on the 31st day of May, 1933, at 10 o'clock a. m., the plaintiff being represented by Mr. D.W. Robinson, Jr., and the defendant by D.M. Winter.
The contention to be disposed of was whether or not plaintiff was entitled to recover for the last period of illness alleged in the complaint, the question of the first period having been disposed of by a previous order of this Court, based upon the motion made by counsel for defendant to open up the judgment rendered herein.
It was suggested by counsel for defendant, first, that the company had an absolute right to cancel the policy at the end of any period for which the premium had been paid and to refuse to accept premiums to renew same for an additional period; second, that the policy in question had lapsed for nonpayment of premium, prior to the commencement of the second period of illness complained of; and, third, that there was an error made in the calculation of the amount due for the second period of illness, if there was liability for this illness.
After hearing argument of counsel for the defendant, I first took up the consideration of the second question, as to whether the policy had, as a matter of fact, lapsed for nonpayment of premiums, and in this connection, my attention was called to a letter written to the insured by the company, on January 25, 1933, stating that the policy would not be continued unless a certain waiver was signed eliminating liability for disability due to pyelitis or kidney trouble, and further to the fact that the company was, at that time, indebted to the insured, and Section 15 of standard provisions in the policy provides that any unpaid premium could be deducted by the company from any amount due to the insured, and my attention was further called to the fact that later an offer was made to pay the premium, but the company insisted on its position that payment would not be accepted unless the waiver was signed.
The law does not require the doing of a useless thing, and since it was made to appear that the company would not accept the premiums without the signing of a waiver, the insured would not necessarily have to offer such payment, and was relieved from the necessity of making a tender, and even if this were not true, then under Section 15, above referred to, the company had a right to take out this premium from the amount due, and so it, therefore, appears to me that the case must stand or fall on the question of whether or not the company had an absolute right to cancel the policy or to refuse to accept renewal premium.
After hearing argument of counsel for and against the propositions and carefully considering the provisions on the face of the policy providing for payment and specifically providing that on the first of the month the premium shall be payable without notice and reading the noncancellable provision designated as Section L, and then reading Section N and Section 15 of standard provisions, above referred to, together with other provisions in the policy, I am of opinion that the policy cannot be canceled by the company, if premiums are paid, and that the company has no right to refuse to accept premiums and thereby avoid the policy. Section N, which provides that when the policy has been kept in force for one hundred and twenty months, it is paid up for life and as the word "life" is written in capital letters in two places and with its general provisions, would certainly lead the insured to believe that when the policy is taken out, they have a right to pay that specific number of premiums and have the policy kept in force for life, and to allow the company privileges, after reading this provision, of arbitrarily canceling the policy, or refusing to accept premiums to renew it, and thereby defeat the very nature of the protection, would be obviously unfair and would be a very one-sided arrangement, giving the company the privilege to do just as it pleases and not giving the policy-holder the protection which the policy purports to give. I therefore hold and conclude that the policy cannot be cancelled by the company at the end of the time for which the premium is paid, but that the policyholder has a right to keep up the policy, and, as long as premiums are paid on them, to continue the policy in force and to mature into a ten-year payment life policy, and it appears to me that this holding is entirely in accord with the last provision of Section L in the policy.
As to the last contention, it was conceded by plaintiff's counsel that an error had been made in calculating the amount due and it appears that the period of illness complained of lasted for twelve days, and under the terms of the policy, would entitle the plaintiff to the payment of $40.00, rather than $50.00. I find that the defendant's attorney has acted with due diligence in this matter, and if there were nothing in the case other than his neglect in failure to answer the complaint in time and it appeared that the defense was sufficient that the defendant may ordinarily prevail in its contention, I would unhesitatingly open this case up. I have gone very carefully into all of the contentions of the defendant and carefully examined the policy, receipt card, letters, documents, and other evidence submitted to me and I am thoroughly convinced that the defendant could not prevail in its contention, and that the plaintiff would ordinarily obtain a verdict, if the matter were tried before a jury, and in my opinion, all of the legal contentions of the defendant have been presented and considered and that the county has merely been saved the expense of trial by a jury and the time of the Court has been saved by the matter being submitted as it has. It is, therefore ordered that the motion to vacate the judgment by default entered herein and for extension of time to answer, and for a trial by jury herein be and same is hereby refused.
It is further ordered that the judgment heretofore rendered in this action for $119.30 be and same is hereby modified and reduced to $109.30, and the attorney for plaintiff is hereby ordered to remit upon the record of the said judgment the sum of $10.00 within ten days from the date of this order.
Mr. D.M. Winter, for appellant, cites: As to abuse of discretion: Section 495, Code 1932; 128 S.E., 298; 122 S.E., 772; 93 S.C. 487; 76 S.E., 1099. Directed verdict: 164 S.E., 175.
Messrs. Robinson Robinson, for respondents, cite: As to discretion of Circuit Court: 56 S.C. 12; 33 S.E., 781; 155 S.C. 179; 152 S.E., 176; 131 S.C. 241; 127 S.E., 13. As to tender: 109 S.C. 356; 96 S.E., 150; 113 S.C. 10; 101 S.E., 47; 138 S.C. 435; 136 S.E., 762.
February 13, 1934. The opinion of the Court was delivered by
This action, commenced April 15, 1933, by the service of summons and complaint through the insurance commissioner's office, was brought by the plaintiff to enforce the collection of certain sick benefits which she alleged were due her under a policy of health and accident insurance issued by the defendant company. The defendant having failed to answer or otherwise plead in the time required by law, judgment by default was taken against the company. Immediately thereafter, counsel for the defendant made an affidavit setting forth the reasons for failure to answer, and moved to open up the judgment on the grounds of excusable neglect and inadvertence, stating in his affidavit certain defenses relied upon. Two hearings of the matter were had before the Honorable M.S. Whaley, Judge of the County Court of Richland County, and two separate orders were made by him. Certain exhibits, including the policy of insurance, the application for the policy, proof of disability, and the correspondence between the plaintiff and the defendant, etc., upon which the company's defenses were based, were considered by the Court, along with the affidavit filed, and were made a part of the record.
At the conclusion of the first hearing, Judge Whaley passed an order, dated May 22, 1933, in which he refused to reopen the judgment, but reserved for his own consideration the question of construction of the policy as affecting the plaintiff's legal right to recover for the last period of illness alleged in the complaint. On May 31, 1933, arguments on this question were heard, and on June 2, 1933, the County Judge filed an order in which he held that the defendant's purported defenses were not meritorious and that the company could not prevail in its contention. He, therefore, refused the motion to vacate the judgment and for an extension of time to answer. From the two orders mentioned this appeal is taken.
The respondent makes the point that the appeal should be dismissed because the exceptions do not aver that there was an abuse of discretion in refusing to reopen the judgment. Even if this contention should not be sustained, we find, upon consideration of the record before us, no error as complained of. The Court is of opinion that the questions raised by the exceptions have been correctly answered and disposed of by the County Judge.
The orders appealed from are affirmed.
NOTE: Let the order of May 22, 1933, and the order of June 2, 1933, be incorporated in the report of the case.
MR. CHIEF JUSTICE BLEASE and MESSRS. JUSTICES CARTER and BONHAM and MR. ACTING ASSOCIATE JUSTICE W. C. COTHRAN concur.