Paul v. Reliance Life Ins. Co.

• Decision Date: 15 March 1922
• Docket Number: 182.
• Citation: 110 S.E. 847,183 N.C. 159
• Parties: PAUL v. RELIANCE LIFE INS. CO.
• Court: North Carolina Supreme Court

110 S.E. 847

183 N.C. 159

PAUL v. RELIANCE LIFE INS. CO.

No. 182.

Supreme Court of North Carolina

March 15, 1922

Appeal from Superior Court, Pamlico County; Lyon, Judge.

Action by Mattie Paul against the Reliance Life Insurance Company. From a judgment for defendant, plaintiff appeals. New trial granted.

Where by a letter which could not reach insured's town before the evening or night of the last day for payment of the premium, insurer offered to take a note for part of the premium and urged prompt action to avoid forfeiture, whether it waived the strict time limit and whether insured acted with reasonable promptness in mailing the note and check the day following his receipt of the letter, held questions for the jury.

D. L Ward, of New Bern, and F. C. Brinson, of Bayboro, for appellant.

Guion & Guion, of New Bern, for appellee.

STACY J.

On July 3, 1919, the defendant entered into a contract of insurance with plaintiff's minor son, a boy 15 years of age whereby it was agreed that the Reliance Life Insurance Company of Pittsburg, Pa., would pay to the plaintiff, mother of the insured, the sum of $5,000, upon receipt, at its home office in Pittsburgh, of due proof of the death of Reginald Paul; provided said contract of insurance was in full force and effect at the time of his death. The second annual premium of $135 was due and payable on July 3, 1920 with one month or 31 days of grace, during which time it was provided that the insurance should remain in force; but it was further stipulated:

"If any premium or installment thereof be not paid before the end of the period of grace, then this policy shall immediately cease and become void, and all premiums previously paid shall be forfeited to the company."

This second premium was not paid when due, nor strictly within the period of grace allowed by the terms of the policy; but it is contended that the defendant waived a strict compliance with the provisions, in respect to time, and that the policy was in force on August 11, 1920, the date of the death of the insured.

The facts relating to the alleged waiver are as follows: On July 26, 1920, the defendant, writing from its office in Charlotte, N. C., addressed a letter to the insured at Grantsboro, N. C., calling his attention to the fact that the last day of grace for the payment of his insurance premium would expire on August 3d, and further added:

"If it is inconvenient for you to pay the premium at this time, or if you are delaying payment for any other reason, we shall be glad to have you advise us immediately as no doubt we shall be able to offer to you some suggestion that will be of benefit to you."

Immediately upon receipt of this letter, the insured and his father, Smith Paul, replied, writing in pencil at the bottom of defendant's letter, as follows:

"Gentlemen: Please let us give you our note due November 1, 1920."

This communication reached Charlotte August 2d; and on the same day the defendant answered, saying:

"In reply to yours of recent date in regard to payment of premium on the above policy we regret to advise that as you have paid only one premium on this policy the company cannot accept a note for the entire amount of the premium. However, we can accept as small a cash remittance as $17.00 and take your note for the balance of $118.00 due October 3d. If this proposition meets with your approval kindly sign the extension note and return to us at once together with your check for $17.00. The days of grace expire on your policy August 3d, and it is therefore very necessary that you let us have this settlement promptly to avoid the lapsing of your insurance."

Inclosed with this...