Hardy v. Ætna Life Insurance

after stating tbe case: There are forty-five exceptions in tbe record, of which twenty-eight bear upon evidence introduced to prove tbat tbe plaintiff bad an insurable interest in tbe life of tbe insured, or upon instructions in regard thereto.

In tbe view we take of tbis case, these exceptions are immaterial, but if material, it was competent to show tbat an affectionate relationship existed between them, as tending to establish good faitb on tbe part of tbe plaintiff and to rebut tbe idea tbat be bad entered into a wagering contract, and was merely speculating in tbe life of bis uncle.

It was also competent to show by tbe agent of tbe defendant tbe circumstances attending tbe signing of tbe applications for insurance, and tbe delivery, of tbe policies to tbe plaintiff, and for tbe plaintiff to testify tbat be knew nothing of tbe transaction before the policies and tbe assignment of them, were *436brought to him by the agent. This evidence related to the question of good faith, and as to whether there had been a delivery of the policy to the insured.

The other exceptions are directed principally to the effect of the evidence, the defendant contending that on the whole evidence the policies were not delivered to the insured, and, if delivered, that they, were not valid, because it was a wagering contract.

The verdict in this case, rendered on competent evidence and under correct instructions, establishes the fact that the plaintiff did not participate in the issuánce of the policies, and that the assignments to him were made in good faith and not as a cover for any fraudulent speculation in the life of the insured, and it is not denied that the defendant, with a knowledge of the facts, received the premiums from the plaintiff for four years.

Under these circumstances, the defendant ought to be required to pay, unless the contract is one condemned by law.

In Crosswell v. Assn., 51 S. C., 116, the Court, while discussing wagering contracts of insurance, says: “A sound public policy requires the enforcement of contracts deliberately made, which do not clearly contravene some positive law or rule of public morals. It is surely not a sound policy to permit insurers to contract to insure the lives of persons, receive premiums therefor as long as the insured, the beneficiary, or the assignee will continue to pay, and then, when the time comes for the insurers to pay what they agreed to pay, allow them to escapa their contract on the ground of want of insurable interest in the life of the insured, unless it clearly appears that such contracts are pernicious and dangerous to society. Courts should not annul contracts on doubtful grounds of public policy. In such matters it is better that the Legislature should speak first”; and in Grabbs v. Ins. Co., 125 N. C., 396, Justice Douglas announces the same principle. He says: “We think the rule is well settled that where an insurance'company, life or fire, issues a policy with full knowledge of existing facts which by its terms would work a forfeiture of the policy, the *437insurer must be held to have waived all such conditions, at least to the extent of its knowledge, actual or constructive. It cannot be permitted to knowingly issue a worthless policy upon a valuable consideration.”

We come then to the consideration of the question whether the facts of this case, which are practically uncontroverted, require us to declare the policies void. They do not impose this duty on us, if the policies were delivered to the insured and were valid in their inception.

Justice Hoke, speaking for the Court, so declared the law on the former appeal in this case, reported in 152 N. C., 288, as follows: “We consider it, however, as established by the great weight of authority, that where an insurant makes a contract with a company, taking out a policy on his own life for the benefit of himself or his estate generally, or for the benefit of another, the policy being in good faith and valid at its inception, the same may, with the assent of the company, be assigned to one not having an insurable interest in the life of the insured: provided this assignment is in good faith, and not a mere cloak or cover for a wagering transaction.”

The question we have to determine is not, Was there a delivery to the insured, but, Was there evidence of the delivery, fit to be submitted to the jury? If there was evidence, it was for the jury to find the fact.

The failure of the insured to pay the first premium was evidence upon the question, but not conclusive. The local agent of the defendant knew all the facts, and the information he had was given to the State agent of the defendant and to the defendant itself. With this information, the. defendant sent the policies and the form for the assignments to the local agents for the purpose of having the contract completed, and received the premiums for four years. We think this is beyond question a waiver of the provision in the policy that it shall not be in force until the first' premium is paid.

In Kendrick v. Ins. Co., 124 N. C., 317, the Court says: “The authorities are numerous and quite uniform that the acknowledgment in the policy of the receipt of the premium *438estops tlie company to test tbe validity of tbe policy on tbe ground of nonpayment of tbe premium. In so far as it is a mere receipt for money, it is only prima- facie, like other receipts, and will not prevent an action to recover tbe money if not in truth paid; but in so far as it is a part of tbe contract of insurance, it cannot be contradicted by parol to invalidate tbe contract, in tbe absence of fraud in procuring tbe delivery of tbe policy. Tbe rule is thus stated in Biddell on Insurance, sec. 1128: ‘As a general rule, it has been held in tbe United States that while such a receipt will prevent tbe insurer from proving tbe premium was unpaid in order to show tbe policy was void from its inception, it may be contradicted in order to show, on a suit for premium, that no payment bad been made.’ ”

In Gwaltney v. Assur. Co., 132 N. C., 928, Chief Justice Clark, speaking for tbe Court, thus states tbe rule: “Tbe authorities are numerous that a general agent can waive any stipulation in the policy, notwithstanding a clause in tbe policy forbidding it, for be can waive that clause as well as tbe other.”

Justice Brown states tbe same principle in another way in Rayburn v. Casualty Co., 138 N. C., 381: “Where tbe policy is delivered, there being no allegation or proof of fraud, tbe delivery is conclusive proof that tbe contract is completed and is an acknowledgment that tbe premium was properly paid during good health.” Also, Justice Connor in Rayburn v. Casualty Co., 141 N. C., 431.

It is also clear, we think, that tbe payment of tbe first premium by tbe plaintiff does not invalidate tbe policies, as it appears that be did not procure tbe issuance of tbe policies, and knew nothing of tbe transaction before tbe policies and assignments were brought to him.

In Shea v. Mass. Ben. Assn., 160 Mass., 291, speaking of a policy to one not having an insurable interest, tbe Court says: “The relationship in which Margaret stood tO' John, and tbe matters disclosed in her testimony, tended strongly to show that tbe policy or certificate of membership was obtained in good faith, and not for tbe mere purpose of speculating on tbe *439hazard of a life in wbicb she had no interest; and if so, the contract was valid if made with him, though made for her benefit, and though the premiums were paid by her”; and in Mutual Life v. Blodgett, 8 Tex. Civ. App., 48, it is said: “It is urged by appellant that the policy is void for the reason that the beneficiary named in the policy had no insurable interest in the life of the insured, and the policy was speculative and wagering on the part of the plaintiff. The policy recited that it was issued upon the application of Mrs. Lucinda J. Downey; J. A. Blodgett was named as the beneficiary, and his relation as grandson was therein disclosed. It is not shown that any fraud or deception was practiced upon the insurance company by which it was deceived as to the real party to the contract of insurance. It was proven that the beneficiary was to pay the premiums; this was known to the company; indeed, his note was taken for the first premium, and the policy was issued by the company with full knowledge of the facts as to the relation of the parties, and' of their respective interests and undertakings under the contract. Under this state of facts, the company should not be permitted to deny that the policy speaks the truth as to the party who made the application, and with whom the contract of insurance was made.”

“The mere payment of the premiums by the plaintiff is not conclusive that the policy was taken out by him.” Langdon v. Mut. Life, 14 Fed., 275; Valton v. Nat. Life, 22 Barb., 35; Ætna Life Ins. Co. v. France, 94 U. S., 565.

If, therefore, the failure of the insured to pay the first premium and the payment thereof by the plaintiff do not render the policies void, it seems to follow that they were valid at their inception if they were delivered to the insured. The jury has found that they were so delivered.

"Was there sufficient evidence to be submitted to them? To constitute a good delivery, it is not necessary that the policies should have been in the actual possession of the insured.

“Delivery is largely a question of intention, as evidenced by words or acts. The requisites of a valid delivery may be said to be three: (1) There must be an intention on the part of *440the person executing the policy to give it legal effect as a completed instrument; (2) this intention must be evidenced by some word or act indicating that the insurer has put the instrument beyond his legal control, though not necessarily beyond his physical control; and (3) the insured must acquiesce in this intention.” Yance on Insurance, p. 169.

' “It was not necessary to the completion of the contract that the policy should be actually delivered to the insured. The issuance of a policy in accordance with the terms agreed on, and its transmission to the agent for unconditional delivery to the insured, is tantamount to a delivery.” Porter v. Ins. Co., 70 Vt., 508.

The doctrine that it is the intention of the parties that controls, and not the transfer of possession, has been applied in numerous cases to deeds and insurance policies. Mass. Life v. Sibley, 158 Ill., 414; Black v. Sharkey, 104 Col., 280; Martin v. Bates, 50 S. W. R., 39 (Ky.); Kelsa v. Graves, 64 Kan., 777; Arrington v. Arrington, 122 Ala., 514; N. Y. Life v. Babcock, 104 Ga., 72.

In Waters v. Annuity Co., 144 N. C., 669, the same principle is declared as follows: “It is not required at all that the acceptance of the company should be indicated by a manual delivery of the policy to the insured.”

If we apply the tests laid down, we think the evidence of delivery is plenary.

There was evidence practically uneontroverted, that the agent of the defendant solicited the insurance; that the insured told him he would take the policies and his children would pay the premiums; that he afterwards told the agent his children could, not pay the premiums and that he wished the plaintiff to have the policies; that the agent told him the plaintiff did not have an insurable interest, but that he could take the policies, payable to his estate, and assign them to the plaintiff; that the insured applied for the policies payable to his estate, and they were so issued by the defendant; that the agent informed the defendant of these facts, and with this knowledge the defendant sent the policies and blank assignments to its agent; *441that the assignments were witnessed by the agent; that the policies and assignments were delivered to the plaintiff, who was ignorant of the matter and acted in good faith, and that for four years the defendant continued to receive the premiums with full knowledge, and was silent as to the objection it now raises.

Under these circumstances, it would be unjust to the plaintiff and the defendant alike to say that it was not the intention of the parties for the policies to be delivered to the insured, and that they should bd completed binding contracts. We deem it not improper to say that the evidence shows that the local agent and the State agent acted in good faith throughout the transaction.

Wo find no error, and the judgment is affirmed.

No error.