Court Opinion

ID: 9846089
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:34:26.918979+00
Date Added: 2024-06-11T09:16:33.183930
License: Public Domain

Brailsford, Justice
(dissenting).
I am not persuaded that the finding of the special referee, concurred in by the circuit judge, that Chavis’ insurer waived any right it may have had to rescind the policy because of misrepresentations in the application, is against the clear preponderance of the evidence. In my view, the judgment should be affirmed under the concurrent findings rule. Crown Central Petroleum Corp. v. Elmwood Properties, 244 S. C. 588, 138 S. E. (2d) 38 (1964); 3 West’s South Carolina Digest, Appeal and Error, Key No. 1022(2) (1952). I, therefore, respectfully dissent.
*525It is settled law that knowledge of facts sufficient to put a reasonable man on inquiry is equivalent to actual notice of such facts as a reasonably diligent inquiry would certainly have disclosed. Huestess v. South Atlantic Life Insurance Co., 88 S. C. 31, 70 S. E. 403 (1911); City of Greenville v. Washington American League Baseball Club, 205 S. C. 495, 32 S. E. (2d) 777 (1945); 39 Am. Jur., Notice and Notices, Sec. 12 (1942).
I assume that the company had the right to rely upon the application initially and to issue the policy without an independent investigation. However, Chavis’ gross fault in two accidents in June, 1967, coupled with his violation of the statute against leaving the scene of an accident, was sufficient to put the company on inquiry as to whether the perfect driving record claimed in the application had been falsified. Since the truth could have been ascertained by a simple inquiry of the highway department, the circuit court was justified in charging the company with knowledge of the facts which would have been disclosed by such inquiry. In the light of this constructive notice, the company’s reaffirmation of the contract on July 18, 1967, by the issuance of a change of automobiles endorsement and adding comprehensive coverage was evidence of waiver.
Although its claims department recommended that the policy be cancelled because of the information developed in the investigation of the two June accidents, the company declined. Instead, it decided to let the policy “run its course” and again reaffirmed it by writing to Chavis on September 13, 1967, and notifying him that the policy would not be renewed upon its expiration on October 7.
But plaintiff’s case need not rest upon constructive notice. On October 26, 1967, the insurer’s adjuster notified it that Chavis’ driver’s license had been suspended on August 4, 1966, contrary to his representations in the application, and on November 8, 1967, Chavis’ complete driving record was received by the insurer from the highway department.
*526In the meantime, the company’s adjuster had been keeping in close touch with the injured parties and their attorney, assuring them that his company had the coverage, that Chavis was at fault, and that the only question was the amount of compensation to which they were entitled. By clear inference, the claimants were led to believe that settlement was being delayed only because Mrs. Berry had not reached maximum recovery and was still incurring hospital and medical expenses.
Conversations of this tenor between claimants’ attorney and the adjuster continued until mid-January, 1968, more than two months after the company was fully advised as to Chavis’ driver’s record. Based upon these assurances, the adjuster for claimants’ insurer had long since clo,sed his file when, on January 29, 1968, the company took the first step toward recision by issuing a premium refund check to Chavis. This was more than three months after the company received express notice from its adjuster that Chavis’ application had been falsified. Neither claimants nor their insurer were notified that the company denied coverage until this action for declaratory judgment was commenced by it on February 14, 1968.
Whether, under the circumstances which have been related, waiver of the company’s claimed right of recision should be implied from its failure, after notice of the falsity of the application, to timely assert such right is a question of fact which has been resolved against the company by the special referee and circuit judge. I do not agree that this finding is against the clear preponderance of the evidence, and would affirm the judgment appealed from.
Bussey, J., concurs.