McNeal v. Life & Casualty Insurance

135 S.E. 300, 192 N.C. 450, 1926 N.C. LEXIS 316

• Court: Supreme Court of North Carolina
• Decided: November 3, 1926
• Status: Published

Opinion

Bbogdbn, I.

When a policy of insurance, properly executed, is offered by the insurer and accepted by the insured as the evidence of their contract, it must be conclusively presumed to contain all the terms of the agreement for insurance by which the parties intend to be bound. And when a formal written policy is delivered and accepted, the written policy, while it remains unaltered, constitutes the contract between the parties. Clements v. Ins. Co., 155 N. C., 57; Wilson v. Ins. Co., 155 N. C., 173; Hollingsworth v. Supreme Council, 175 N. C., 615; Guarantee Corporation v. Electric Co.; 179 N. C., 402.

While it is admitted in the pleadings that the policy sued on was executed and delivered to Isaac Hodge, the defendant contends that the judgment of the court should be sustained by reason of the fact that the plaintiff had no insurable interest in the life of the deceased, Isaac Hodge, and, further, that it appeared that the policy had been issued without a medical examination as required by C. S., 6460. Two questions, therefore, are presented by this contention:

1st. Was it necessary for the plaintiff to allege and prove an insurable interest in the life of Isaac Hodge?

2nd. Was tbe policy void by reason of failure to comply witb C. S., 6460?

Tbe first contention as to insurable interest cannot be sustained for tbe reason tbat tbe policy was not originally issued to tbe plaintiff but issued to Isaac Hodge and payable to bis estate. Tbe policy was assigned; sometime after its issue, to tbe plaintiff. If tbe assignment was valid, tben no insurable interest was necessary. Tbis principle of law was tbus stated by Justice Hoke in Hardy v. Insurance Co., 152 N. C., 286: “We consider it, however, as established by tbe great weight of authority tbat where an insurant makes a contract witb a company, taking out a policy on bis own life for tbe benefit of himself or bis estate generally, or for,the benefit of another, tbe policy being in good faith and valid at its inception, tbe same may, witb tbe assent of tbe company, be assigned to one not having an insurable interest in tbe life of tbe insured; provided, this assignment is in good faith, and not a mere cloak or cover for a wagering transaction.” Johnson v. Ins. Co., 157 N. C., 107; Howell v. Ins. Co., 189 N. C., 212.

As to whether or not tbe assignment was made in good faith or as a mere cloak or cover for a wagering contract is a question of fact for tbe jury.

In regard to tbe second question as to tbe effect of C. S., 6460, tbe law is tbus declared by Justice Hoke in Morgan v. Fraternal Asso., 170 N. C., 75: “But tbe authorities are to tbe effect tbat, when a statute or valid regulation in restraint only of tbe company’s action is made for tbe protection of tbe policyholder, a recovery may ordinarily be bad, though tbe contract is in breach of tbe regulation.”

In Blount v. Fraternal Asso., 163 N. C., 167, Justice Allen says, referring to C. S., 6312: “Tbe statute does not purport to deal witb tbe validity of tbe contract of insurance, but witb tbe insurance company.” C. S., 6460 does not purport to invalidate tbe policy, but is a regulation of law imposed upon tbe insurance company. If it bad been tbe intention of tbe Legislature, in enacting C. S., 6460, to invalidate tbe contract and to deny recovery thereon, it would have so enacted. Ober v. Katzenstein, 160 N. C., 440; Tobacco Co. v. Tobacco Co., 144 N. C., 352; Robinson v. Life Co., 163 N. C., 415.

C. S., 6460, was amended by chapter 82 of tbe Public Laws of 1925. Tbis amendment provides, in substance, tbat where there has been no medical examination, tbe policy shall not be rendered void nor payment resisted on account of any misrepresentation as to physical condition of tbe applicant, except in cases of fraud. Tbis statute, of course, was enacted subsequent to tbe institution of tbe present suit, but it is in effect a legislative declaration o£ tbe law heretofore announced by tbe Court in tbe Blount case, supra, and in tbe Robinson case, supra.

We conclude, therefore, that there was error in tbe judgment and that tbe case should be tried upon its merits.

Eeversed.