Dawson v. Concordia Fire Ins. Co. of Milwaukee, Wis.

• Decision Date: 20 October 1926
• Docket Number: 93.
• Parties: DAWSON et al. v. CONCORDIA FIRE INSURANCE CO. OF MILWAUKEE, WIS., et al.
• Court: North Carolina Supreme Court

135 S.E. 34

192 N.C. 312

DAWSON et al. v. CONCORDIA FIRE INSURANCE CO. OF MILWAUKEE, WIS., et al.

No. 93.

Supreme Court of North Carolina

October 20, 1926

Appeal from Superior Court, Harnett County; Sinclair, Judge.

Action by E. V. Dawson and others against the Concordia Fire Insurance Company of Milwaukee, Wis., and the National Ben Franklin Fire Insurance Company of Pittsburg, Pa. Judgment for defendants, and plaintiffs appeal. No error.

Adams J., dissenting.

Where insured was not entitled to recover on fire policy, persons claiming under the "loss payable" clause could not recover.

On April 13, 1923, defendant insurance companies issued two policies of insurance in the standard form prescribed by statute, insuring plaintiff E. V. Dawson for one year against loss of the property described therein by fire. Each policy was for $2,500. Contemporaneously with the issuance of said policies, it was expressly agreed by said plaintiff and the agent of defendants that credit should be extended by said agent for the payment of the premiums therefor, and that if said premiums were not paid within the time agreed upon which was prior to April 30, 1923, said agent might cancel said policies. The policies were not delivered to plaintiff but were retained by the agent for plaintiff, the insured. The premiums were not paid within the time agreed upon, and on April 30, 1923, the agent wrote on each policy the word "can.," an abbreviation for the word "canceled," and sent the policies to the general agent of said companies at Raleigh, N. C., on June 2, 1923, the property described in said policies was destroyed by fire. The value of the property, at the date of its destruction, was $8,000. This action was begun on October 22, 1923, to recover the amounts alleged to be due under said policies.

Each of said policies contained a clause in the following words:

"Any loss that may be ascertained and proven to be due the assured under the building items of this policy shall be held payable to First National Bank, Dunn, N. C., subject nevertheless to all terms and conditions of this policy."

At the time of the issuance of said policies, plaintiff E. V. Dawson was indebted to said bank.

Upon the verdict of the jury finding the facts as above stated, judgment was rendered that plaintiffs take nothing by this action, and that defendants go without day. From this judgment plaintiffs appealed to the Supreme Court.

E. C. West and Clifford & Townsend, all of Dunn, for appellants.

F. S. Spruill, of Rocky Mount, and Young & Young, of Dunn, for appellees.

CONNOR J.

The policies of insurance, upon which this action was begun, issued on April 13, 1923, and insuring plaintiff E. V. Dawson for one year against the loss of the property described therein by fire, were in force on June 2, 1923, the date of the destruction of said property, (1) unless said policies were delivered upon condition that they should not become effective, until the premiums were paid, or (2) unless the policies were canceled on April 30, 1923, as contended by defendants. Plaintiffs contend that the policies were delivered without condition as to payment of premiums, and that the attempted cancellation by the agent on April 30, 1923, was not valid, and therefore did not release defendants from their obligations under the policies, because no notice, as required in the policies, was given to him by defendants of an intention to cancel the policies, or that the same had been canceled.

Whether a policy of insurance has been delivered or not is largely a question of intention. If it was the intention of defendant companies, acting by their authorized agents, that the policies, executed by them, should be completed instruments, if this intention was evidenced by words or acts of defendants, indicating that the policies were put beyond their legal control, and if plaintiff acquiesced in this intention, and accepted the policies, they were delivered so as to become effective from the date of issue, notwithstanding they did not pass beyond the physical control of the agents of the defendant companies. Vance on Insurance, p. 169; Hardy v. Insurance Co., 154 N.C. 430, 70 S.E. 828; Roberta Mfg. Co. v. Assurance Co., 161 N.C. 88, 76 S.E. 865; 26 C.J. 58, § 51. Retention by the agent of the company of the policy, which as between the insurer and the insured has been delivered as a completed instrument, does not affect its validity.

A policy of insurance, in form as required by statute, may be delivered upon condition that it shall not become effective until the happening of some subsequent event. "In such cases, the policy is of no binding effect until the condition is fulfilled. Such conditions may be shown by parol, without violating the well-known rule prohibiting the varying of written agreements by parol testimony. The condition so shown goes to the existence of the policy, and not to its terms." Vance on Insurance, p. 170. In Hartford Fire Insurance Co. v. Wilson, 187 U.S. 467, 23 S.Ct. 189, 47 L.Ed. 261, it is held that a policy of fire insurance may be delivered to the agent of the insured upon condition, and that, if the condition is not fulfilled prior to the destruction of the property by fire, no recovery can be had, because the policy had not become effective prior to the loss. 18 Rose's Notes, p. 1197. See 26 C.J. p. 59, note 95.

The jury in the instant case has found that the policies were issued as alleged in the complaint. There is no finding or admission in the pleadings or otherwise that they were issued or delivered conditionally as between the insurer and the insured. The policies became effective for all purposes on the day of their issue. The agreement as found by the jury was not between the insured and the insurer with respect to the terms of the policy, but between the insured and the agent of the insurer with respect to the payment of the premiums to the said agent, and not to the company. Unless canceled in accordance with its terms, each of the policies continued in full force and effect from date of issue until June 2,...