After a careful study of the record in this case and the applicable law as reflected in our decided cases, I am of the opinion that the Circuit Court committed error in granting a nonsuit.
The evidence shows that when the policy in question was applied for by the plaintiff (upon the insistent solicitation of the defendant's agent), she stated to him that she was 65 years of age, and too old to obtain insurance. He knew that at this age she was uninsurable, but he assured the plaintiff and her husband that she could secure a policy. This took place: "He run his hand in his pocket. He said, `Wait; I have got a little book policy.' And he opened his book, and he turned over and looked at something down there, I don't know what it was, or how it was; any way, he said, `Here is where I can give you a nice policy.'"
A week after the application was made he delivered the policy to her, and he knew that her age was therein misstated as being 55 years. For 78 weeks thereafter he collected from her a weekly premium of 15 cents. At the expiration of that time, in April, 1938, he, together with the office manager of the defendant, visited the home of the plaintiff and notified her that the policy was worthless because when it was issued she was 65 years old.
Nowhere does it appear that these agents charged the plaintiff with having misrepresented her age. The reasonable inference is that the soliciting agent knew all along that the age she gave him when the application was made was correct, and that the company through him deliberately misstated her age in the insurance contract. In order to obtain the surrender of the policy the agents of the defendant not only told the plaintiff that she was uninsurable, but told her that the government would not permit the insurance company to pay her beneficiary in case of her death. And they furthermore informed her that she would not be eligible for an old age pension if it were discovered that she held *Page 195 this policy. The agent went so far as to guarantee the payment of the old-age pension. The plaintiff testified that she surrendered the policy, "believing that I would get the pension provided I give up the policy."
It may be inferred from the evidence that all of these statements were false and fraudulently made in order to obtain the policy.
I am unable to conclude from a consideration of the evidence in this case and under the decisions of our Court, that the plaintiff must be deemed remediless because for 78 weeks she or her husband, the beneficiary, did not read or have read to them that provision of the policy dealing with "Misstatement of Age."
The plaintiff and her husband, as shown by the most casual reading of the record, were ignorant and illiterate Negroes. The husband, Jessie Barnes, testified that he could not read, but could sometimes spell and scratch his name. And the plaintiff stated, "I can't do much reading, and I can't understand what I read, and I haven't had much schooling." She said further that the agent was well known to her and that she trusted him, and that other members of her family held policies in his company. With reference to having the policy read to her she stated: "If you don't know to do a thing you don't do it." The insurance policy covers five typewritten pages of the record.
The position taken by the insurance company in this case is the same as that assumed by the insurance company in the case of Thomas v. American Workmen, 197 S.C. 178,14 S.E.2d 886, 136 A.L.R., 1, that is, that the plaintiff is barred from recovery even though the representations were fraudulently made, by reason of her own negligence and conscious or reckless disregard of her duty, when she neither read the policy herself nor had some one else to read and explain it to her.
The facts in this case and in Thomas v. American Workmen,supra, run a parallel course. In each case the insurance *Page 196 company was dealing with the most ignorant type of policy-holder. In Thomas v. American Workmen, the agent when delivering the policy to the insured, fraudulently misread its provisions to her. In the case at bar, it may be inferred that the defendant's agent, with calculated design, misstated the age of the insured and knowingly delivered a policy incorporating that misstatement. His conduct constituted constructive fraud. It is inferable that he had every reason to believe that it would go undetected and undiscovered. We see no appreciable difference between his conduct and the conduct of the agent in Thomas v. American Workmen, who deliberately misread the provisions of the policy.
Contracts of insurance are in a somewhat different category from the usual contracts which one encounters in ordinary business transactions. Ordinarily it must be presumed that persons are familiar with the terms of written contracts to which they are parties; and in the absence of fraud they are justly bound by the provisions incorporated therein. But this rule should not be too strictly applied to an insurance policy in cases where the ignorant and unwary are concerned. It is a matter of common knowledge that a very small percentage of literate policyholders are actually cognizant of the provisions of their policies, and many of them are ignorant of the names of the companies issuing the policies. These contracts are prepared by the experts of insurance companies. They are highly technical in their phraseology; they are usually complicated and voluminous, and in their numerous conditions and stipulations furnish what sometimes may be veritable traps for the unwary. The insured, and especially ignorant Negroes obtaining this type of industrial insurance, usually rely implicitly upon the agent securing the insurance. And it is only just and equitable that the company and its agents should be required to deal honestly and fairly with them. The Courts, while zealous to uphold legal contracts, should not sacrifice the spirit of the *Page 197 law, nor should they be slow to aid the confiding and innocent.
In Hood v. Life and Casualty Insurance Company of Tennessee,173 S.C. 139, 175 S.E., 76, 78, this principle is announced: "Whether or not reliance upon a representation in a particular case is justifiable or excusable, what constitutes reasonable prudence and diligence with respect to such reliance, and what conduct constitutes a reckless or conscious failure to exercise such prudence, will depend upon the various circumstances involved, such as the form and materiality of the representation, the respective intelligence, experience, age, and mental and physical condition of the parties, the relation and respective knowledge and means of knowledge of the parties, etc."
And the foregoing doctrine has been adhered to, and was re-announced in the very recent case of Thomas v. AmericanWorkmen, supra [197 S.C. 178, 14 S.E.2d 887, 136 A.L.R., 1], where it is stated: "But the unmistakable drift is toward the just doctrine that a wrongdoer cannot shield himself from liability by asking the law to condemn the credulity of the ignorant and unwary." See Annotation, 131 A.L.R., 1299, 136 A.L.R., 5.
After reviewing the evidence and applying the principles above adverted to, I am satisfied that the issue of negligence and recklessness should have been submitted to the jury.
I am unable to agree with the view that the plaintiff cannot sustain her action, including punitive damages, because she failed to prove actual damages. After a very thorough review of our cases, it was held, in Cook v. Atlantic CoastLine R. Co., 183 S.C. 279, 190 S.E., 923, that where pleadings allege and evidence shows a conscious and willful violation, intervention, or infringement of legal right, the law should presume damages sufficient to sustain an action, even though such damages may be only nominal, and not capable of exact measurement, and in such case a verdict for punitive damages, without a finding of actual damages, will *Page 198 be sustained. And see Jones v. Atlantic Coast Line R. Co.,108 S.C. 217, 94 S.E., 490, and Fields v. Lancaster CottonMills, 77 S.C. 546, 58 S.E., 608, 11 L.R.A. (N.S.), 822, 122 Am. St. Rep., 593.
Although the particular question was not raised in Cookv. Metropolitan Life Insurance Co., 186 S.C. 77,194 S.E., 636, the Court sustained a verdict for $5.00 nominal damages and $256.00 punitive damages.
It will be noted that the defendant company did not offer to reinstate the policy and permit a resumption of the payment of weekly premiums, until the attorneys for the plaintiff advised it that an action for damages would be brought. If this offer to reinstate constituted an offer of compromise it was not obligatory upon the plaintiff to accept it. If she had a cause of action for fraud and deceit, it could not be impaired by an offer of compromise.
It is suggested that because the plaintiff obtained a policy of insurance from the Liberty Life Insurance Company in the identical amount of $72.00, with a smaller weekly premium, subsequent to the surrender of her policy to the defendant company, that this in effect relieved the defendant company of liability, and eliminates from the case all question of damages. I do not think so. In my opinion, the plaintiff's cause of action relates back to the delict committed by the defendant when under alleged circumstances of fraud it obtained the surrender of her policy. Furthermore, it does not appear with any degree of certainty that the policy obtained from the Liberty Life Insurance Company has any value, because although it is admitted that the plaintiff was 65 years of age, or older, when this latter policy was issued, this policy contains an even more flagrant misstatement of age. It is stated therein that the plaintiff is forty-seven years of age.
In my opinion, the judgment should be reversed, and the case remanded for trial.
MR. ASSOCIATE JUSTICE STUKES concurs. *Page 199