Grier v. Mutual Life Ins. Co.

• Decision Date: 05 May 1903
• Citation: 44 S.E. 28,132 N.C. 542
• Parties: GRIER v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: North Carolina Supreme Court

44 S.E. 28

132 N.C. 542

GRIER v. MUTUAL LIFE INS. CO. OF NEW YORK.

Supreme Court of North Carolina

May 5, 1903

Appeal from Superior Court, Mecklenburg County; Shaw, Judge.

Action by J. M. Grier, administrator, against the Mutual Life Insurance Company of New York. Judgment for plaintiff, and defendant appeals. Affirmed.

Where an insurance policy and the application therefor both provide that, if the application is approved and the policy issued it shall be in force from the date of the application, the provision in such application that the contract shall not take effect until the first premium is paid, during the applicant's continuance in good health, is only a provisional agreement, authorizing the company to withhold delivery of the policy until such payment in good health; and after actual delivery it is estopped, in the absence of fraud, to assert that the policy is void either on account of nonpayment of premium or ill health.

Jones & Tillett, for appellant.

Burwell & Cansler, for appellee.

CLARK C.J.

On 26th February, 1901, the plaintiff's intestate made out an application for a policy of insurance upon his life, which was sent to the home office of the defendant, where it was accepted, and a policy thereupon was duly executed 9th March and is dated 26th February. This policy was sent to defendant's agent for delivery, who delivered the same on 14th March. In the meantime the insured had been taken, on 6th March, with a chill from exposure, which was followed by fever. On 12th and 13th March he was free from fever, and the attending physician (witness for defendant) says his condition was not so good the next day (14th), and on the 15th he developed catarrhal pneumonia, and died 18th March. At the time the policy was applied for, the insured said he preferred to pay the premium ($23.30) in cash, and in presence of the defendant's agent told Mr. Lee, who had money of the insured in hand, to pay that sum to the defendant's agent. On 14th March the defendant's agent told Lee he had the policy, who told him, as the said agent testifies, that the insured was not well, and that he had a cold, or the grippe, and was up at his house, and suggested that the agent go up to his house to see him; but the agent did not do so, and delivered the policy to Lee, who offered the money to the said agent, who told him that he would get it when he collected the other premiums at that point, and on 16th March the said agent paid the premium on this policy to the district agent at Charlotte. On hearing of the death, the company sent out blanks for proofs of loss and no offer to return the premium was made till 8th July (after this suit began), though on 26th June the district agent wrote to the plaintiff that "the amount of premium, with interest, paid on 14th March, 1901," had been returned to him by the company, who had declined to pay the loss. There were no averments in the answer of fraud in the application, or in the suppression of facts, or misrepresentation as to the condition of health of the insured 14th March, when the policy was delivered.

The defendant excepts because the court instructed the jury, if they believed there was a material change in the health of the insured between the time of the application and the delivery of the policy, to answer the issue in favor of the defendant, "unless you further find from the evidence that the defendant company, before the delivery of the said policy, received notice of the said changed condition in the health of said Davidson, and waived its right to avoid the policy for this reason." And the defendant further excepted because the court charged that if the company accepted the application on 9th March, and executed its policy, and sent the same to its local agent for delivery and "if you further find from the evidence that on 14th March, and before the delivery of the policy to said Davidson [the insured], the said Gordon [defendant's agent] received notice of the material change in the condition of the health of said Davidson, if you find there was such a change, and the said Gordon, notwithstanding such notice delivered said policy to Lee, with instruction to deliver it to Davidson at once, and for the purpose of making it a binding contract on the defendant company, and that Lee did so, and that Lee offered to pay Gordon the premium upon the policy for Davidson, pursuant to instructions from said Davidson, if you find there ever were such instructions, but that Gordon, for his own convenience, requested that the plaintiff's premium be not paid then, but that the same should be paid him in accordance with the usual course of dealing between himself and said Lee, and that this was agreed to between said parties, and that on the 16th of said month Gordon sent the company's part of said premium, in the usual course of business, to the defendant, and upon the death of said Davidson notice thereof was given to the defendant, and that the...