Curtis v. Prudential Ins. Co. of America

• Decision Date: 12 January 1932
• Docket Number: No. 3197.,3197.
• Citation: 55 F.2d 97
• Parties: CURTIS v. PRUDENTIAL INS. CO. OF AMERICA.
• Court: U.S. Court of Appeals — Fourth Circuit

55 F.2d 97 (1932)

CURTIS v. PRUDENTIAL INS. CO. OF AMERICA.

No. 3197.

Circuit Court of Appeals, Fourth Circuit.

January 12, 1932.

Joe W. Ervin, of Charlotte, N. C. (John M. Robinson and Guy T. Carswell, both of Charlotte, N. C., on the brief), for appellant.

C. W. Tillett, Jr., of Charlotte, N. C., and James H. Pou, of Raleigh, N. C. (Ralph W. Hyatt, of Newark, N. J., Pou & Pou, of Raleigh, N. C., and Tillett, Tillett & Kennedy, of Charlotte, N. C., on the brief), for appellee.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

NORTHCOTT, Circuit Judge.

This action at law was instituted in the superior court of Mecklenburg county, N. C., by Mrs. Charles H. Curtis, appellant, seeking to recover on a policy of insurance alleged to have been issued by appellee, the Prudential Insurance Company of America, defendant below, on the life of complainant's husband, Charles H. Curtis, in the sum of $5,000. The plaintiff was named as beneficiary in the policy.

On petition of appellee, the cause was removed to the District Court of the United States for the Western District of North Carolina. In the court below, at the conclusion of the plaintiff's evidence, the attorneys for the defendant demurred to the evidence, which motion the court below sustained, and entered a judgment of nonsuit. From this judgment, the plaintiff brought this appeal.

Under date of October 5, 1928, the plaintiff's husband, Charles H. Curtis, applied, in writing, for a $5,000 life insurance policy with double indemnity in the event of accidental death; C. F. Hancock being the soliciting agent. Upon this application, the company wrote out a policy, dated October 13, 1928, which was transmitted to soliciting agent Hancock. The premium was payable quarterly, and amounted to $17.55 per quarter. Curtis paid $2.50 on account when he signed the application, and between that time and his death, which occurred January 15, 1929, there were paid to Hancock in several payments sums aggregating $7, so that when Curtis died only $9.50 of the first premium had been paid, and the policy had never been delivered.

The application was signed by the insured, and contained the following clause: "I further agree that the policy herein applied for shall be accepted subject to the privileges and provisions therein contained and that Unless the full first premium is paid by me at the time of making this application, the policy shall not take effect until issued by the company and received by me and the full first premium thereon is paid, while my health, habits and occupation are the same as described in this application."

Under the language of the policy, the application was made a part of the contract, and the policy also contained a clause to the effect that the policy, together with the application, constituted the entire contract between the parties. At the time of the application for the policy, the Curtis family was carrying industrial insurance with the defendant company on two young children and the life of the plaintiff, for which policies the local agent, Hancock, was collecting weekly payments.

Agent Hancock agreed that the premium on the policy in suit could be paid weekly, and plaintiff began making weekly payments of $1.25 per week upon the policy. Agent Hancock raised the weekly rate of payment $1 per week shortly after the payments were begun, and plaintiff testified that, because of that fact, she ceased making the payments from some time in November until January 7, when an additional $2 was paid, making a total paid on the policy of $9.50. In the meantime, during the Christmas week, the agent called on insured and explained why it was necessary to raise the weekly payment, and the insured agreed to continue paying.

On the Thursday before January 14, 1929, the plaintiff received from the defendant company a notice and demand for payment of the second quarter premium due January 13, 1929. Agent Hancock called at the Curtis home on January 14, and plaintiff testified that she offered to pay him the balance due on the first quarter, but that the agent told plaintiff that her husband's policy was in force and that there was no use to worry about it, and that it would be in force another month under the payments already made.

On January 15, 1929, the insured was killed.

At the trial, the policy in question was produced by the defendant pursuant to a notice served on it by the plaintiff, and was introduced in evidence by the plaintiff. The word "Canceled" in perforations was stamped over the signatures of the president and secretary of the company on the policy. The contention of the defendant below, which was sustained by the action of the trial judge, is that there never was any contract of insurance; first, because the policy was never delivered, and second, because the first premium was never paid.

The plaintiff contends that the policy was in full force and effect at the time of insured's death; there having been a constructive delivery of the policy or a waiver of delivery, and the first premium having been paid or waived.

The validity of the provisions in the application and the policy is unquestioned. Similar provisions have been passed upon by the courts, and, so far as we can find, have been uniformly approved.

In MacKelvie v. Mutual Ben. Life Ins. Co. (C. C. A.) 287 F. 660, 663, it is held: "The law is settled in this court that, when a life insurance policy contains, as this one did, the provision that it `will not take effect, unless the first premium or agreed installment thereof shall be actually paid during the lifetime of the insured,' the provision means exactly what it says and will be enforced. And if the policy contains, as this one did, the express provision that `agents are not authorized to make, alter or discharge contracts,' the waiver relied on must be one by the company itself, and no attempted waiver by an agent will be treated as its equivalent. In Pennsylvania Casualty Co. v. Bacon, 133 F. 907, 67 C. C. A. 497, a policy of insurance stated that it was not to take effect `unless the premium is actually paid previous to any accident upon which claim is made,' and it provided that no waiver should be binding on the insurer unless indorsed on the policy and...