Court Opinion

ID: 3879052
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:11:10.251167+00
Date Added: 2024-06-11T07:41:51.354457
License: Public Domain

Action upon a policy of insurance in the sum of $5,000.00, upon the life of Robert W. Beaty, payable to his estate, issued October 30, 1925; his death in an automobile accident occurred on June 14, 1926. The policy called for a premium of $18.00 per quarter, payable in advance on or before the 1st days of March, June, September, and December of each year.
The insured paid no premium at all on the policy. When it was issued to him he stated to defendant's agent, W.A. Holt, that he was in financial straits, and Holt advanced the money to pay the premium from October 30, 1925, to June 1, 1926. The premium which fell due on June 1, 1926, was not paid.
On June 9, 1926, Holt wrote insured asking him how he wanted him to pay his further premiums and calling his attention to the fact that several letters had previously been written him relative to the premium he had advanced. This letter was never received by insured. He had been away from home for several days about that time, and was called to Union immediately upon his return, on which trip he was killed on June 14th. This letter was with certain of his mail which he never saw, and was opened by his wife after his death.
On June 19, 1926, five days after the death of insured and nineteen days after the policy had lapsed, Dudley Beaty, a relative of insured, forwarded to Holt his personal check for $36.00 to cover the semiannual premium and notified Holt of insured's death.
Holt submitted this letter and check to the home office of appellant, and on June 25th the check was returned to Beaty *Page 218 
with the statement that the policy had lapsed on June 1st by reason of the nonpayment of the premium due on that date.
On November 23, 1926, the plaintiff began an action in the Court of Common Pleas for Union County seeking recovery of $5,000.00 under the policy. Within due time the defendant removed the cause to the United States District Court. Subsequently, on December 15, 1928, on motion of plaintiff's attorneys, this action was nonsuited and the complaint dismissed.
On February 12, 1929, the plaintiff filed the present suit in the Court of Common Pleas for Union County, the complaint being identical with the complaint in the former action with the exception that judgment in the sum of $3,000.00 was asked. Within the time required by law the defendant filed in the office of the Clerk of Court of Common Pleas for Union County the necessary papers for the removal of the case to the United States District Court. The Circuit Judge refused to grant an order of removal upon the ground that the prayer of the complaint being for only $3,000.00, the cause was not removable, to which the defendant duly excepted.
The defendant reserving its right to have the matter adjudicated by the United States District Court filed an answer admitting the issuance of the policy, but alleging that the contract of insurance ceased and determined on June 1, 1926, by reason of the failure of insured to pay the premium due on that date.
The policy provided that in the event it should determine by reason of default in the payment of any premium, "the subsequent acceptance of a premium by the Association, or by any of its duly authorized agents, shall reinstate the policy, but only to cover accidental injury thereafter sustained and such sickness as may begin more than ten days after the date of such acceptance."
At some time prior to March 28, 1929, the defendant made a motion before his Honor, Judge Mann, for an order *Page 219 
removing the case to the Federal Court, based upon the petition and bond for removal and affidavits filed and served. On that day his Honor signed an order refusing the motion upon the ground that the right of removal, so far as jurisdictional amount was concerned, was controlled by the sum for which the plaintiff demanded judgment, which was $3,000.00; that the plaintiff had the right thus to waive the excess of $5,000.00 over $3,000.00. To this order the defendant filed exception.
Later the case came on for trial before his Honor, Judge Sease, and a jury. Upon call the defendant appeared specially and made objection to the jurisdiction of the Court and to the trial by said Court on the ground that the case had been properly removed to the United States District Court. The presiding Judge overruled the objection and ordered the case tried.
At the close of all of the testimony the defendant made a motion for a directed verdict in its favor upon the following ground: "That the uncontradicted testimony shows that a premium on this policy became due on June 1st, 1926; that that premium was not paid by the deceased, and that under the terms of the contract of insurance or policy, the contract or policy terminated on June 1st, 1926; that the policy or contract expressly provides the method by which it may be reinstated or revived from time to time, that is, by the payment of the premiums then due. But the policy also expressly provides that even when so reinstated the reinstatement shall become effective as of the date when the premium is received by the Company, and, of course, shall not cover any accident or injuries prior thereto."
The motion was refused, and the jury thereafter rendered a verdict in favor of the plaintiff for $3,612.39. From the judgment entered thereon the defendant has appealed.
I shall first discuss the preliminary and controlling issue: "Can a party whose claim is based upon a liquidated demand of more than $3,000.00 by asking judgment for a lesser *Page 220 
sum prevent removal of the cause to the United States District Court?"
The case of Iowa Central Ry. Co. v. Bacon, 236 U.S. 305,35 S.Ct., 357, 59 L.Ed., 591, is cited as controlling the issue in favor of the affirmative. I do not think it does; on the contrary, accepting the test therein laid down, it appears to me to be decisive in favor of the negative, when taken in connection with the long line of the decisions of this Court which I shall cite.
The case was one in tort, for damages, on account of the alleged wrongful killing of the plaintiff's intestate; the damages laid in the complaint were $10,000.00, but the prayer for judgment was for $2,000.00, an amount which at that time was the limit of Federal jurisdiction, that is to say, the amount involved must have been in excess of $2,000.00 in order that the Federal Court should take jurisdiction and justify a removal to that Court. The syllabus of the case broadly and unqualifiedly declares: "Although the petition may allege that plaintiff sustained damages in excess of two thousand dollars, if the prayer for recovery is for less than that sum, the jurisdictional amount is not involved, and the filing of a petition and bond does not effect a removal of the case."
But the Court in its opinion gives a very different complexion to the declaration. There it is said: "It was, of course, essential to the removal of the case that the amount in controversy should have been sufficient to give the Federal Court jurisdiction; that is to say, $2,000.00, exclusive of interest and costs. The State Court had authority to determinethe effect of the prayer to the petition, and it decidedthat, under the petition, no more than the amount prayed forcould be recovered in the action, notwithstanding the statementthat the estate had suffered damage in the sum of $10,000.00."
If it can be said that the State Court of South Carolina, having authority to determine the effect of the prayer to a *Page 221 
complaint, has decided that under a complaint no more than the amount for which judgment is prayed can be recovered in an action, as was done in the Iowa Courts, the Bacon case
would be conclusive.
On the contrary, the Courts of this State have decided over and over again that the prayer of a complaint is no part of it and may be disregarded; that it is the same as if there had been no prayer.
The following quotations from our own decided cases I think settle the question:
Balle v. Moseley, 13 S.C. 439: "The demand for relief is not part of the cause of action (Pom. on Rem., § 580)."
Williams v. Irby, 16 S.C. 371: "* * * it is well settled that the demand for relief forms no part of the cause of action, and does not even give character to it, inasmuch as the true theory of the Code is to give a party such a judgment as his allegations and proofs entitle him to, no matter what may be the form of the demand for relief." Citing Pom. Rem., § 580, and Balle v. Moseley, 13 S.C. 439.
Butler v. Williams, 27 S.C. 221, 3 S.E., 211, 213: "But when it is remembered that the demand for relief constitutes no part of the complaint (Balle v. Moseley, 13 S.C. 439), we do not see how this can affect the question. The Court renders judgment appropriate to the case made by the complaint, and established by the proofs, without regard to the prayer for relief. * * *"
Westlake v. Farrow, 34 S.C. 270, 13 S.E., 469, 470: "* * * it is well settled that the demand for relief constitutes no part of the cause of action." (Citing Balle v.Moseley, 13 S.C. 439; Levi v. Legg, 23 S.C. 282; Pom. Rem., Section 580). Continuing, the Court said: "* * * it is very obvious that the prayer for relief should have no influence in determining the nature of the cause of action set forth in the complaint."
McMakin v. Fowler, 34 S.C. 281, 13 S.E., 534, 536: "* * * for nothing is better settled than that the demand *Page 222 
for relief constitutes no part of the cause of action, and cannot give character to it." (Citing the cases above referred to.)
Lassiter v. Okeetee Club, 70 S.C. 102, 49 S.E., 224,226: "In the case of Balle v. Moseley, 13 S.C. 439, this Court has held that the omission of a prayer for relief in the complaint does not make it demurrable. In the case just cited it is held that `demand for relief is not part of the cause of action. Pom. on Rem., § 580.'"
Mortgage Loan Co. v. Townsend, 156 S.C. 203,152 S.E., 878, 886: "Since the adoption of the Code, that tendency has continued, until our Court has gone so far as to announce that the prayer of the complaint is no part thereof." Citing Balle v. Moseley, 13 S.C. 439; Williams v. Workman,113 S.C. 487, 101 S.E., 833; First National Co. v.Strak, 148 S.C. 410, 146 S.E., 240; Atlantic Coast LumberCorporation v. Morrison, 152 S.C. 305, 149 S.E., 243.
Sheppard v. Green, 48 S.C. 165, 26 S.E., 224, 228: "Besides, this apparent defect appears only in the prayer for relief, and it is well settled that the plaintiffs may obtain any relief appropriate to the case made by the pleadings and evidence, without regard to the form of the prayer for relief."
In Williams v. Workman, 113 S.C. 487, 101 S.E., 833, the complaint alleged damages by reason of the detention of an automobile in the sum of $2,500.00; the prayer for judgment was for the possession of the automobile worth $1,250.00 and for damages in the sum of $2,500.00. The Court held that the prayer of the complaint was no part of it and the amount referred to in the complaint, $2,500.00 justified the jurisdiction of the County Court, which was limited to $3,000.00, notwithstanding the fact that according to the prayer for judgment the amount involved was $3,750.00. In the opinion of the Court it was stated: "It needs no citation of authority to show that the prayer of the complaint is no part of the complaint." It would appear therefore that if the prayer of the complaint cannot be resorted to to oust the *Page 223 
Court's jurisdiction it should not be resorted to in order to sustain it.
The citation from Pomeroy (2d Ed.), § 580, fully sustains the conclusion of the Court based upon it as above set forth.
In Simpson v. McMillion, 1 Nott  McC., 192, the Court said: "It has been often determined, that a plaintiff cannot release a part of his demand to bring his case within an inferior jurisdiction."
See, also, Wells v. Reynolds, 3 Brev., 407; St. Amand v.Gerry, 2 Nott  McC., 487; Bent's Ex'r v. Graves, 3 McCord, 280, 15 Am. Dec., 632.
The cases of Cavander v. Ward, 28 S.C. 472,6 S.E., 302; Catawba Mills v. Hood, 42 S.C. 204, 20 S.E., 91;Brunson v. Furtick, 72 S.C. 579, 52 S.E., 424, 5 Ann. Cas., 307, do not affect the conclusion above reached, for they involve the construction of a special statute relating to the jurisdiction of magistrate Courts which is controlled by the "amount claimed," and not as in the present case, where the jurisdiction is controlled by the amount or matter in controversy which, of course, has reference to the complaint and not the prayer for judgment. Under the complaint in this case, upon trial in the Circuit Court the plaintiff might have recovered the full amount of the policy regardless of the prayer.
I think, too, that there is a difference amounting to a distinction between complaints upon liquidated demands and complaints upon unliquidated demands. The present case is one based upon a liquidated demand supported by a contract of insurance naming a specific sum.
I think therefore that the Circuit Court should have held that the case, notwithstanding the effort of the plaintiff to avoid the jurisdiction of the Federal Court, was still in that Court; that the order of removal should have been granted by his Honor, Judge Mann, and that his Honor, Judge Sease, should not have proceeded with the trial of the case. *Page 224 
I approach next the motion of the defendant for a directed verdict in its favor:
It appears that when the policy was issued and delivered to the insured he was in financial straits and was unable to pay the initial premium or any part of it. By an arrangement with the agent of the company, the initial payment was advanced by the agent which carried the policy to June 1, 1926. The agent, it seems, remitted to the company the amount of the premium less his commissions and held the personal obligation, apparently in parol, of the insured to reimburse himself for the advance. No part of it was paid by the insured to the agent. No question appears to have been made but that this arrangement carried the policy in force up to June 1, 1926, when the next premium was due.
On May 10, 1926, the home office in Worcester, Mass., notified the insured that a premium upon the policy was due on June 1st, giving him the option of making an annual, semiannual, or quarterly payment. To the notification he paid no attention.
Prior to this, in April, 1926, the agent, as a personal matter between him and the insured, called upon him by letter for the advance that he had made when the policy was issued; to which also he paid no attention.
On June 9, 1926, eight days after the premium of June 1st was due, the agent wrote the insured as follows: "Please advise how you want me to pay your further M.P.A. premiums. You will recall that I paid them semi-annually for you last year. I think that I have written you several letters concerning your premium, but perhaps you have been very busy and haven't had time to answer them."
Mrs. Beaty testified that this letter of June 9th was found with the mail of the insured after his death, unopened; he had never seen it, and of course, could not have been so influenced by its contents as to present the essential element of waiver or estoppel. *Page 225 
But if it should be assumed that the insured received the letter of June 9th, and upon account of it refrained from taking action for his protection, I think that there would be nothing in it indicative of a purpose on the part of the company either to waive the forfeiture for nonpayment of the premium on June 1st or to reinstate the policy.
The letter must be read in connection with the preceding facts: Beaty had been unable to pay the initial premium and the agent practically advanced to him the funds necessary to carry the policy in force until June 1, 1926; it is conceded by counsel for the insurance company that if Beaty had died between November, 1925, and June 1, 1926, the company would have been liable for the loss. In spite of frequent reminders of his personal obligation to the agent to reimburse him for the advance, Beaty had been neglectful of it. The agent was therefore personally interested in having the policy reinstated which doubtless would have been done if Beaty had received the letter and acted upon it. At best, it was only an offer of the agent to do as he had done with the initial premium — advance the money to Beaty personally and account to the company for the premium less his commissions. At that time the policy had lapsed. If Beaty had received the letter, he would not have had an indefinite time to avail himself of the offer; the provisions of the policy would have become effective: "If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the Association or by any of its duly authorized agents shall reinstate the policy, but only to cover accidental injury thereafter sustained and such sickness as may begin more than ten days after the date of such acceptance."
If the offer had been received and accepted by Beaty and the agent had failed to carry it out, the agreement would not have been binding upon the company.
In 32 C.J., 1312, it is said: "Where the collecting agent of the Company undertakes to pay a premium from his own *Page 226 
funds to the Company, the Company cannot be charged by reason of his failure to do so."
In Public sav. Ins. Co. v. Manning, 61 Ind. App. 239,111 N.E. 945, 946, the Court said:
"The arrangement by which Kratzer [the agent] agreed temporarily to pay the premiums on the policies was not binding on appellant. That was a mere private agreement between appellee and Kratzer whereby the latter became nothing more than appellee's agent."
See, also, Wood v. Ins. Co., 107 S.C. 536, 93 S.E., 197.
In Cook v. Ins. Co., 150 Mo. App. 299, 134 S.W. 13,14, the agent refused to accept a premium tendered him, telling insured that he would take care of the premium for him. The Court said: "When Scott refused to accept the payment of the premium, he did it as an individual and in his character as an individual and friend of the insured, and he undertook as that friend as agent to pay the money out of his own funds to his company. We are compelled to hold that under such a state of facts the company cannot be charged with his failure to discharge his duty to the insured, and that plaintiff must suffer the consequences of trusting to an agent that had been accepted as their own agent by the insured and plaintiff for his failure to carry out what respondent testifies he agreed to do."
But a conclusive answer to the contention that the unread letter of June 9th was evidence of waiver or estoppel is found in the case of Perkins v. Ins. Co., 93 S.C. 88,76 S.E., 29, 30. In that case the premium for 1911 was not paid by January 1, when it was due; the company notified the insured on January 5 of the fact and offered, in accordance with the grace clause, to accept it if paid by February 1st; on January 28, a similar notice was mailed; no attention was paid to either notice and the time limit ran out on February 1st; on February 2 the company wrote to the insured offering to reinstate the policy upon certain conditions to be complied with by February 10; this letter was opened by the *Page 227 
beneficiary on the 4th, a few hours after the death of the insured. The letter contained an offer that if the insured could not pay the premium in cash the company would accept his several notes in installments payable on time. The plaintiff contended that this letter was evidence of a waiver of the forfeiture by failure to pay the premium by February 1st. In dismissing the contention the Court, by Mr. Justice Watts (later Chief Justice), said: "To hold under the facts here that there was a legal waiver would make it unsafe for a creditor to ever extend a debt or indulge a debtor. Certainly an offer to reinstate on certain conditions, as was made in this case, cannot be regarded as a waiver, especially if the conditions are not complied with, and there is no contention here that the conditions were complied with. The letter of February 2, 1911, of the company to the insured by no twisting of words or strained construction, could be regarded as a waiver of the forfeiture. The policy itself provides by its own terms that it shall lapse for nonpayment of premiums one month after January 1, 1911. Hence it was a dead contract, and not a live one after February 1, 1911. * * * Certainly this liberal provision in the policy ought not to be twisted and tortured into a further imaginary allowance of time not stated or limited in any way in which insured should be at liberty not to pay any premium at all, if he lived, and at the same time be fully covered by insurance if he died. The mere statement of such a one-sided suggestion is its own refutation. The letter on February 2, 1911, in no way altered the existing situation or created any new rights in plaintiff until acted on by the insured or plaintiff in conformity with its terms. One of the terms in said letter was the payment of a premium in a certain manner on or before February 10, 1911. No attempt to do this was made until several days after that date."
The Court in the case of Lautz v. Vermont Life Ins. Co.,139 Pa., 546, 21 A., 80, 10 L.R.A., 577, 23 Am. St. Rep., 202, cites the case of Marvin v. Universal Life Ins. Co., *Page 228 85 N Y, 282, 39 Am Rep., 657, and observes: "This case is valuable for the further reason that it shows very clearly the ground of the distinction between a promise to extend the time of payment made before the time of such payment, and one made after the default. In the former instance the assured may have relied upon the promise and allowed the time to slip by, whereas without such promise he might have procured the money and paid the premium. * * * But where a promise is made after the default the assured has not been misled or injured in any manner. He has allowed his policy to lapse by his own neglect; it can only be restored by the consent of the company, and he has no reason to suppose that if he dies before the matter is perfected by the payment and acceptance of the premium, the company will pay as in the case of a live policy."
In Columbian Nat. Life Ins. Co. v. Morey (C.C.A.),26 F.2d 580, 582, the question of waiver was based upon a letter written insured five days after the lapse of his policy. Insured died about 9 o'clock the night the letter was written, and there was no evidence that he ever received or heard of it. The Court, in discussing the letter as evidence of the company's intention to waive the lapse, said:
"But waiver of a clear legal right arising under a contract requires more than mere evidence of intention; it requires consideration or estoppel. * * * In Globe Mut.L. Ins. Co. v. Wolff, 95 U.S. 326, 333, 24 L.Ed., 387, the Court said:
"`The doctrine of waiver, as asserted against insurance companies to avoid the strict enforcement of conditions contained in their policies, is only another name for the doctrine of estoppel. It can only be invoked where the conduct of the companies has been such as to induce action in reliance upon it, and where it would operate as a fraud upon the assured if they were afterwards allowed to disavow their conduct and enforce the conditions.' * * * *Page 229 
"As already indicated, there is not a scintilla of evidence that Arsanault either acted upon or even received the letter of December 4 containing this conditional offer. There was neither consideration nor estoppel. The company's right to claim a lapse stood exactly the same when Arsanault died at 9 o'clock on December 5 as before the letter was written and mailed."
In Lautz v. Ins. Co., 139 Pa., 546, 21 A., 80, 10 L.R.A., 577, 23 Am. St. Rep., 202, it was held, quoting syllabus: "A promise of the agent made after default in the payment of the premium had occurred, to receive the premium up to a subsequent day, is a nudum pactum; a lapsed policy can only be restored to life, so far as the assured is concerned, by the actual payment and acceptance of the premium, or by a contract based upon a sufficient consideration."
I think therefore that if it should be held that the State Court had jurisdiction of the case the defendant's motion for a directed verdict should have been granted.
In the light of these conclusions, I do not deem it necessary to consider the other exceptions.