Murphy v. Lafayette Mut. Life Ins. Co

• Citation: 83 S.E. 461,167 N.C. 334
• Decision Date: 18 November 1914
• Docket Number: (No. 286.)
• Court: United States State Supreme Court of North Carolina
• Parties: MURPHY. v. LAFAYETTE MUT. LIFE INS. CO.

83 S.E. 461

167 N.C. 334

MURPHY.

v.LAFAYETTE MUT. LIFE INS. CO.

(No. 286.)

Supreme Court of North Carolina.

Nov. 18, 1914.

1. Insurance (§ 389*) — Payment of Premium—Necessity to Bind Company—Waiver by Delivery of Policy.

The unconditional delivery of an insurance policy is a waiver of the stipulation for a previous or cotemporaneous payment of the first premium.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 1028-1031; Dec. Dig. § 389.*]

2. Insurance (§ 349*) — Payment of Premium — Premium Note — Forfeiture for Nonpayment.

A condition of a note given for the first premium on a life insurance policy that, unless it is paid at maturity, the policy shall he avoided, will be made effective unless the time for payment is postponed by valid agreement, or such condition is in some way waived by the company.

LEd. Note.—For other cases, see Insurance, Cent. Dig. §§ 891, 895-902, 913; Dec. Dig. § 349.*]

3. Insurance (§ 357*) — Payment of Premium — Premium Note — Forfeiture for Nonpayment.

A provision of a note given for the first premium on a life insurance policy that the policy shall be void unless the note is paid at maturity, being for the benefit of the company, may be waived by it, and is waived when there is a valid agreement to postpone payment, or when the company so far recognizes an agreement to that effect or otherwise acts with reference to the matter as to induce the policy holder, in the exercise of reasonable business prudence, to believe that prompt payment is not expected and that the forfeiture on that account will not be insisted upon.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 914, 1034; Dec. Dig. § 357.*]

4. Insurance (§ 665*) — Payment of Premium — Premium Note — Forfeiture for Nonpayment.

A note due October 20, 1912, for $52.64, the amount of the first premium on a life insurance policy, provided that, unless paid at maturity the policy, should be void. The note was indorsed by the company to its agent, who deposited it for collection and $25 and interest in advance was paid thereon. Insured went to the home office of the company, and was referred to the bank which had the note, and renewal interest was taken, carrying the note to March 1, 1913, prior to which date insured died. Before that date the balance due on the note was refused the company. On February 15, 1913, a notice was sent insured" by the home office of the company in their official envelope, signed by the cashier, the son of the secretary, stating that the premium note for $27.64 would be due March 1, 1913, and should be paid by that date. Held, that the facts warranted the inference that there was an agreement to postpone the time for payment of the note or a waiver of the condition as to forfeiture, and that insured was given the privilege of not paying the note until March 1st.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 1555, 1707-1728; Dec. Dig. § 665.*]

5. Insurance (§ 357*) — Payment of Premium — Premium Note — Forfeiture for Nonpayment.

Though the policy contained a provision that only the president, vice president, or secretary had power to modify the contract to extend the time for paying any premium, and that the company should not be bound by any promise by any other person, the facts warranted the inference that the notice signed by the cashier was sent with the knowledge and approval of the officers designated in the policy, whose action was binding on the company.

LEd. Note.—For other cases, see Insurance, Cent. Dig. §§ 914, 1034; Dec. Dig. § 357.*]

Appeal from Superior Court, Cumberland County; Rountree, Judge.

Action by Savannah Murphy, administratrix of Peter J. Murphy, deceased, against the Lafayette Mutual Life Insurance Company. From a judgment for plaintiff, defendant appeals. Affirmed.

It was admitted at the trial that the policy declared on and presented by plaintiff had been duly executed by defendant, and that Peter J. Murphy, the insured named in the policy, was dead, having died on February 19, 1913. Defendant contended that the policy was avoided for nonpayment of the first premium note, and also because of fraudulent representations by the insured in his application as to his physical condition. The jury rendered the following verdict:

"(1) Was the premium given for the policy paid in accordance with the terms of the policy and of the note? Answer: Yes.

"(2) Did Peter J. Murphy in his application, make fraudulent representations of his physical condition which were material, as alleged? Answer: No."

Judgment on the verdict for plaintiff, and defendant excepted and appealed.

Q. K. Nimocks, of Fayetteville, for appellant

Rose & Rose, of Fayetteville, for appellee.

HOKE, J. There is no specific exception to his honor's charge to the jury, and, the evidence being ample to show good faith and to sustain plaintiff's position on the second issue, the question recurs on the refusal. of his honor to nonsuit plaintiff by reason of the failure of the insured to pay the first premium note.

It is well established in this jurisdiction that, in the absence of fraud, and in so far as the contract of insurance is concerned, the delivery of an insurance policy absolute and unconditional is a waiver of the stipulation for a previous or cotemporaneous payment of the first premium. Pender v. Insurance Co., 163 N. C. 98, 79 S. E. 293; Waters v. Annuity Co., 144 N. C. 663, 57 S. E. 437, 13 L. R. A.' (N. S.) 805; Rayburn v. Casualty Co., 141 N. C. 425, 54 S. E. 283; Kendrick v. Insurance Co., 124 N. C. 315, 32 S. E. 728, 70 Am. St. Rep. 592. And our decisions are to the effect, further, that where a note for such a premium contains provi-

*For other eases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexession that, unless the same is paid at maturity, the policy shall be avoided, the condition will be made effective by proper proof, unless the time for payment has been postponed by valid agreement, or the stipulation has been in some way waived on the part of the company. Sexton v. Insurance Co., 160 N. C. 597, 76 S. E. 535; Perry v....