Perry v. Sec. Life & Annuity Co

• Decision Date: 17 February 1909
• Citation: 63 S.E. 679,150 N.C. 143
• Court: North Carolina Supreme Court
• Parties: PERRY. v. SECURITY LIFE & ANNUITY CO.

63 S.E. 679

150 N.C. 143

PERRY.

v.SECURITY LIFE & ANNUITY CO.

Supreme Court of North Carolina.

Feb. 17, 1909.

1. Insurance (§ 137^*) — First Premium — Agreement as to Payment.

In the absence of an agreement, it is generally understood that prepayment of the first premium is unnecessary to the validity of an oral preliminary contract of insurance, but that payment must be made on delivery of the policy.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 231, 236; Dec. Dig. § 137.*]

2. Insueance (§ 137*) — First Premium — Agreement as to Payment.

When it is expressly agreed that the contract shall not be binding till the first premium is paid, no insurance contract, oral or otherwise, can be considered complete unless prepayment be made or waived.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 231, 236; Dec. Dig. § 137.*]

3. Insurance (§ 137*) — First Premium — Agreement as to Payment—Public Policy.

The stipulation that the policy shall not become binding till the first premium has been paid is not against public policy, and the law does not for any other reason prohibit it.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. § 231; Dec. Dig. § 137.*]

4. Insurance (§ 665*)—Action on Policy— Prima Facie Case.

If there has been an actual delivery of the policy, nothing else appearing, its production at the trial presents a prima facie case for the insured.

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

5. Insurance (§ 136*)—Conditional Delivery of Policy.

It is competent for the parties to agree on the conditional delivery of a policy, and there is no contract when such a delivery is shown and the condition has not been performed.

[Ed. Note.—For other cases, see Insurance, Dec. Dig. § 136.*]

6. Insurance (§ 137*)—Conditional Delivery of Policy—Notice of Election to Accept—Payment of Premium.

Where a policy was delivered with the understanding that it should not take effect till the advance premium was paid during the lifetime and good health of the insured, and it was not accepted by him for the purpose of taking effect, and he was not bound to pay the premium, if he concluded afterwards to accept and hold the company liable, he should have notified it that he had elected to do so, and the premium should have been paid or tendered while he was in good health, pursuant to agreement.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 231-234; Dec. Dig. § 137.*]

Appeal from Superior Court, Perquimans County; Ward, Judge.

Action by E. V. Perry, administrator of H. T. Billups, deceased, against the Security Life & Annuity Company. From a judgment for defendant, plaintiff appeals. No error.

Chas. Whedbee and P. W. McMullan, for appellant.

Aydlett & Eringhaus and W. M. Bond, for appellee.

WALKER, J. This action was brought to recover the amount ($1,000) of a policy of insurance alleged to have been issued by the defendant to the intestate of the plaintiff on November 12, 1906. The defendant denied that the policy was ever delivered to the intestate, except upon a condition—the payment of the premium—which he failed to perform. It also contended that the intestate refused to accept the policy until he could ascertain whether he would be able to pay the first premium. He was unable to pay the premium himself, and requested his daughters to pay it. They asked J. L. Billups to pay the premium, and he promised to do so, but he did not notify the company of the fact, nor did he tender the premium until H. T. Billups, the intestate, had become quite ill and three days before his death. He then offered to pay the premium to the defendant's district agent, and not to the agent who had delivered the policy and had sole charge of the matter. The application for the insurance, which was signed by the intestate, and made a part of the contract, contains the following clause: "The company shall incur no liability under this application until it has been received, approved, and the policy issued thereon by the company, at the home office, and the premium has actually been paid to and accepted by the company, or its duly authorized agent, during my lifetime and good health." The policy provides as follows: "The insurance hereunder is granted in consideration of the application for this policy, which is a part of this contract, and of the premium of seventy-two and 68/100 dollars, to be paid on delivery hereof." The court, at the close of the evidence, intimated that the jury would be instructed to return a verdict for the defendant, if they found the facts to be as stated bythe witnesses. The plaintiff thereupon submitted to a nonsuit, and appealed.

The parties to a proposed contract of insurance may make such agreement as to the payment of the first premium as they may desire, and such agreement, whether express or implied, must be performed or waived. In the absence of any agreement, it is generally understood that prepayment of the first premium is not necessary to the validity of an oral preliminary contract, but that payment must be made upon delivery of the policy. When, however, it is expressly agreed that the contract shall not become binding until the first premium has been paid, no contract, oral or otherwise, can be...