Court Opinion

ID: 9581806
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:18:58.670356+00
Date Added: 2024-06-11T13:37:15.889290
License: Public Domain

*294Lionel K:\Legge/ Acting Justice
(dissenting impart)’:
.. I agree that the complaint' here was hot demurrable; but I do not agree that it stated facts entitling the plaihtiff to recover' punitive damages. ’
■ At the foundation of the plaintiff’s case lay the obligation of the defendant company to insure his health in consideration of the premium paid, and to issue a proper policy of insurance with reasonable promptness. That obligation was a contractual one; and I do not here question the plaintiff’s right,- upon its negligent or wilful breach, to waive the contract and sue in ,tort.
Punitive damages are not recoverable in an action for breach -of contract unless such breach was accomplished with fraudlent intent and accomplished by a fraudulent act. Harwell v. Mutual Benefit Health & Accident Ass’n, 207 S. C. 150, 35 S. E. (2d) 160, 161 A. L. R. 183; Smyth v. Fleischmann, 214 S. C. 263, 52 S. E. (2d) 199; White v. Felkel, 225 S. C. 453, 82 S. E. (2d) 813. Acts of wilfulness will not support an allowance of punitive damages in such an action. Holland v. Spartanburg Herald-Journal Co., 166 S. C. 454, 165 S. E. 203, 84 A. L. R. 1336. Wilful and unjust failure to perform a contract does not necessarily connote fraud; bad faith is the test. Ex parte Hollman, 79 S. C. 9, 60 S. E. 19, 21 L. R. A., N. S., 242, 14 Ann. Cas. 1105.
It would appear logical, therefore, that where the conduct complained of would give rise to a cause of action ex contractu or ex delicto at the aggrieved party’s choice, his claim for punitive damages in tort should have the same factual basis that would be required had he sued for breach of contract. Herein, I think, lies sound distinction between allowance of punitive damages in tort actions for wilful injury to person or property, and in actions such as the present one; and here, too, may be a reasonable explanation of the fact alluded to in the majority opinion, that in no case of this kind that has come to the court’s attention have punitive damages been sought.
*295The delicts alleged in the complaint here are: (1) a statement made to the plaintiff by the insurer’s agent in December,' 1962 or January, 1963, that the plaintiff could reinstate the policy that had. been issued to him in January, 1961, and that had been cancelled, provided he would apply for reinstatement, before March 15, 1963, — which statement the agent knew or should have known was false; (2) delay from February 19, 1963, when plaintiff applied for reinstatement of the policy and paid the required premium, until July 23, 1963, before informing him that the time for applying for reinstatement had expired prior to February 19, 1963; and (3) delay from July 23, 1963, when plaintiff applied for a new policy and paid the additional premium required, until September 25, 1963, before issuing the new policy.
It is alleged that by reason of the agent’s statement in December, 1962 or January, 1963, to the effect that reinstatement could be obtained up to March 15, 1963, upon which plaintiff relied, plaintiff assumed, from February 19 to July 23, 1963, that the first policy had been reinstated. But there is no allegation that the agent’s statement was made with intent to deceive; there is no allegation of fraudulent intent; no fraudulent act is alleged; no cause of action for fraud and deceit is deducible from the complaint—Cf. Smythe v. Fleischmann, supra.
If the allegations of the complaint are established by proof, of course the plaintiff would be entitled to recover all damages that he has sustained as the result of the alleged delicts. But I am unwilling to approve the allowance of punitive damages under the allegations here, and therefore in any such action in which a plaintiff, electing to waive his right to sue for breach of contract and suing instead in tort characterizes the defendant’s delict as wilful. Precedent for such holding is apparently lacking; its probable consequences are somewhat disturbing.