Ferebee v. the N. C. Mut. Home Ins. Co..

• Decision Date: 31 January 1873
• Citation: 68 N.C. 11
• Court: North Carolina Supreme Court
• Parties: WILSON B. FEREBEE v. THE N. C. MUTUAL HOME INSURANCE COMPANY.

68 N.C. 11

WILSON B. FEREBEE

v.THE N. C. MUTUAL HOME INSURANCE COMPANY.

Supreme Court of North Carolina.

January Term, 1873.

Parol evidence is admissible to explain a receipt, given by an agent of an Insurance Company, for the premium on a policy of insurance against loss or damage from fire.

An Insurance Company is not bound by any private arrangement entered into by their agent, acting without the knowledge or authority of the company, in respect to the payment of the premium on a policy of insurance. Especially is this so, when the company, instead of affirming the action of the agent, gives notice to the assured, to “pay his note when due, and save his policy.”

Although an Insurance Company may waive the right to declare a policy void, for the reason, that a note given for cash premium is not paid at muturity; still, such waiver does not preclude the company from insisting upon a condition contained in the policy, declaring it void, in case of loss or damage by fire, if the note so given, or any part thereof, shall remain unpaid and past due, at the time of such loss or damage.

This was a CIVIL ACTION tried before Pool, J., at the Fall Term, 1871, of CAMDEN Superior Court.

In his complaint, the plaintiff alleges, that in January, 1870, the defendants through their accredited agent, Dr. R. K. Speed, insured his dwelling house and furniture against loss or damage by fire, to the amount of $1,999, and also his barn and the corn therein, to the further amount of $267, all of which was covered by one policy of insurance; that he duly fulfilled all the conditions contained in the policy, and that his said dwelling, with most of the furniture was destroyed by fire, on the 18th day of August, 1870, for which damage he demanded judgment, &c.

In their answer, the defendants admit the issuing of the policy upon the application of the plaintiff, but deny that the conditions therein set out, were ever performed by the plaintiff, or that any consideration was ever paid by him for the risk undertaken by the company. The loss and damage as alleged by plaintiff were established on the trial below.

In support of their answer, the defendants offered in evidence a note executed by the plaintiff, and payable on the 1st day of April, 1870, to the Secretary of the N. C. Mutual Home Insurance Company, for $30.83, “for value received,” & c.; and proposed to prove by Dr. Speed, the agent of the company, that at the time of the plaintiff's application for insurance, the note was executed by him as a premium note, and the plaintiff distinctly informed, if the same was not paid at maturity, the policy issuing on the application would be void. The introduction of the note, and the testimony of the agent--for the reason that the contract of insurance was embodied in the application, note and receipt, which were in writing--were objected to by the plainttff, but received by his Honor; the plaintiff excepted.

In reply, the plaintiff offered in evidence a receipt signed by the agent, Dr. Speed, purporting to have received the sum of $30.42, “on account of premium on insurance against fire, for which an application is this day made,” &c.; and testifying himself, that at the time of the application, the agent, Speed, was indebted to him, and that upon his approaching him about insuring his property, that he, the plaintiff, stated he would do so, if he could use in payment of his premium the amount that he, Speed, owed him. That the agent said; “that would be all right,” and gave him the note to sign, which he did, taking the receipt above alluded to. The plaintiff testified further, that he did not read the note, nor did he understand, that he was giving a premium note, and thought that he was getting a cash receipt, and that the note was given for the accommodation of the agent himself. That he was not informed at the time, if the note was not paid at maturity, the policy would be void. Upon his cross-examination, the plaintiff admitted that he had received a notice from the company in the usual form, dated before the maturity of the note and headed, “Pay your premium note and save your policy,” or words to that effect, and subsequently had received two similar notices dated respectively in April and June. That he did not pay the note after receiving the notices; but sheltering himself under the receipt of the agent, considered, that so far as he was concerned the note was paid. The evidence as to the indebtedness of the agent, Speed, to the plaintiff, as well as to the understanding between the agent and plaintiff at the time of the application for insurance, is contradictory, yet immaterial in the decision of the case, for the reason, that his Honor held, that even upon his own showing, the plaintiff could not recover.

Among the instructions asked by the plaintiff, the most of which were immaterial to the issue, he asked his Honor to instruct the jury, “that if the note given by him was regarded by defendants as a premium note, the defendants should within a reasonable time...