Hicks v. Home Sec. Life Ins. Co.

• Decision Date: 30 October 1946
• Docket Number: 305
• Parties: HICKS v. HOME SEC. LIFE INS. CO.
• Court: North Carolina Supreme Court

39 S.E.2d 914

226 N.C. 614

HICKS v. HOME SEC. LIFE INS. CO.

No. 305

Supreme Court of North Carolina

October 30, 1946

The plaintiff brought her action through a next friend to recover on a policy of insurance on the life of her father in which she is beneficiary. The policy was issued January 10, 1944, in the sum of $500. It contains the following provision '3rd. Limitations. This policy shall be void if there be in force on the life of the Insured a policy or policies previously issued by this Company unless the number of such prior policy or policies is endorsed hereon with a waiver permitting such policy or policies signed by the President the Secretary or an Assistant Secretary, it being expressly agreed that the Company shall not in the absence of such endorsement be assumed or held to know or to have known of the existence of such prior policy or policies and that the issuance of this policy shall not be deemed a waiver of such last mentioned conditions.'

At the time of the issue of this policy, there was in existence a policy on the life of the insured in which his wife, Bertha Hicks, is named as beneficiary, which policy was issued September 16, 1940, and was concededly in force. The policy in controversy does not have the endorsement provided for in the article above quoted. In the application for the second policy occurs the direction: '17. If now insured in the Company give Policy No. ----, Prem. ----, Amt. ----,' to which Hicks responded 'No.'

The plaintiff's evidence discloses that at the time Hicks took out the second policy, he told the agent, Mr. Capps from whom it was procured, that there was another policy on his life in this Company in which his estranged, and later divorced, wife was beneficiary, and asked him to have it canceled, which he promised to do. There was evidence by the defendant to the contrary, but in view of the jury verdict, defendant's brief concedes these facts to be as stated in plaintiff's evidence.

The defendant continued to collect premiums upon both policies down to the death of the insured.

Hicks died February 11, 1945. The defendant declined to pay the policy, relying upon the above cited condition, and, after action had been begun, tendered a return of premiums paid thereupon in the sum of $23.52.

Numerous objections were taken to the admission of evidence, which we do not find it necessary to note except as stated in the opinion.

The defendant, in apt time, made demurrers to the evidence and moved for judgment as of nonsuit, which demurrers and motions were overruled and exception noted by the defendant.

The verdict was favorable to plaintiff, and from the ensuing judgment thereupon the defendant appealed, assigning as errors matters covered by his exceptions.

R. E Whitehurst, of New Bern, and George B. Riddle, Jr., of Jacksonville, for defendant, appellant.

Charles L. Abernethy, Jr., of New Bern, for plaintiff, appellee.

SEAWELL Justice.

A careful study of the exceptions appearing in the record leads to the conclusion that they do not disclose reversible error. We direct our attention to that phase of the case which is regarded as more important to the disposal of the appeal.

The case properly hinges upon the question of waiver: Whether the facts and circumstances of record, constituting the history of the dealings between the parties, the conduct of the insurer toward the insured, and its attitude toward the policy it issued, works a waiver of the condition which purports to render it void if at the time of its issue there is in force a previously issued policy on the life of the insured in the same company unless a properly signed waiver of the condition is endorsed on the policy.

Involved with this question is the stipulation that in the absence of such endorsement, the company shall not be assumed or held to know of the existence of such prior policy, 'and that the issue of this policy shall not be deemed a waiver of such last mentioned conditions. ' If the conduct of the defendant was such as to mislead the insured and induce in him a belief that he was protected by a valid policy while he continued to pay the premiums--that the condition imposed in the policy had been waived--and this can be established agreeably to the rules of evidence and standards of practice prevailing in our courts, we have no doubt that the stipulation, intended to foreclose the plea of waiver altogether by binding the insured against the existing facts upon which it arises, would likewise, and for strong reasons of public policy, become ineffectual.

Waiver of the forfeiture provision in a policy of insurance is predicated on knowledge on the part of the insurer of the pertinent facts and conduct thereafter inconsistent with an intention to enforce the condition. In Coile v. Order of United Commercial Travelers, 161 N.C. 104, 76 S.E. 622, quoted in Paul v. Reliance Life Ins. Co., 183 N.C. 159, 162, 110 S.E. 847, and in Arrington v. Continental Life Ins. Co., 193 N.C. 344, 137 S.E. 137, it is said [161 N.C. 104, 76 S.E. 623]:

'A course of action on the part of the insurance company which leads the party insured honestly to believe that by conforming thereto a forfeiture of his policy will not be incurred, followed by due conformity on his part, will estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract. ' New York Life Ins. Co. v. Eggleston, 96 U.S. 572, 577, 24 L.Ed. 841; Knickerbocker Life Ins. Co. v. Norton, 96 U.S. 234, 24 L.Ed. 689.

The majority of decided cases adopt the view that where the insurer is affected with knowledge of the existence of the prior policy, either the issue of the second policy or the continued acceptance, with such knowledge, of premiums paid thereupon, will work an estoppel or constitute a waiver of the condition. Melick v. Metropolitan Life Ins. Co., 84 N.J.L. 437, 87 A. 75, affirmed in 85 N.J.L. 727, 91 A 1070; Western & S. Life Ins. Co. v. Oppenheimer, 1907, 31 Ky.Law Rep. 1049, 104 S.W. 721; McGuire v. Home Life Ins. Co., 94 Pa.Super. 457; National Life & Accident Ins. Co. v. House, 1937, 104 Ind.App. 403, 9 N.E.2d 133; Lanigan v. Prudential Ins. Co., 63 Hun. 408, 18 N.Y.S. 287; Clay v. Liberty Industrial Life Ins. Co., La.App. 157 So. 838; Wills v. Liberty Industrial Life Ins. Co., La.App. 1935, 159 So. 141; Atlas v. Metropolitan Life Ins. Co., Sup. 181 N.Y.S. 363. What we regard as the best considered cases also hold that, notwithstanding the stipulation to the contrary, knowledge of the prior existing policy may be inferred from the fact that both policies are issued by the same company and upon the same life. Some cases hold that knowledge to the agent soliciting the insurance or receiving the application will not be imputed to the insurer unless the information is given to an agent clothed with authority to make the waiver. The contrary view has been adopted in this State. Follette v. United States Mut. Accident Association, 107 N.C. 240, 12 S.E. 370, 12 L.R.A. 315, 22 Am.St.Rep. 878; Id., 110 N.C. 377, 14 S.E. 923, 15 L.R.A. 668, 28 Am.St.Rep. 693; Dibbrell v. Georgia Home Ins. Co., 110 N.C. 193, 14 S.E. 783, 28 Am.St.Rep. 678; Horton v. Home Ins. Co., 122 N.C. 498, 29 S.E. 944, 65 Am.St.Rep. 717; Short v. LaFayette Life Ins. Co., 194 N.C. 649, 650, 140 S.E. 302; Marsh v. Durham Life Ins. Co., 199 N.C. 341, 154 S.E. 313; Laughinghouse v. Great Nat. Ins. Co., 200 N.C. 434, 436, 157 S.E. 131; Mahler v. Milwaukee Mechanics' Ins. Co., 205 N.C. 692, 172 S.E. 204; Cox v. Equitable Life...