Case Name: JESSE S. CREECH v. SUN LIFE ASSURANCE COMPANY OF CANADA and MILTON BEST
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1944-03-22
Citations: 224 N.C. 144
Docket Number: 
Parties: JESSE S. CREECH v. SUN LIFE ASSURANCE COMPANY OF CANADA and MILTON BEST.
Judges: 
Reporter: North Carolina Reports
Volume: 224
Pages: 144–147

Head Matter:
JESSE S. CREECH v. SUN LIFE ASSURANCE COMPANY OF CANADA and MILTON BEST.
(Filed 22 March, 1944.)
1. Insurance § 30c—
Payment of the initial premium on a policy Qf life insurance to one, who is a soliciting agent or broker of the company to solicit the insurance and deliver the policy, constitutes payment to the company by virtue of G. S., 58-46.
2. Insurance §§ 22b, 30a—
A recital of payment of premium in a policy of insurance, unconditionally delivered, may not be contradicted to work a forfeiture of the policy, or to defeat a recovery thereon, in the absence of fraud. If in fact the premium was not paid, it may be recovered, but the policy cannot be invalidated on that account.
3. Insurance § 37—
In an action to recover on a policy of life insurance, where defendant admits the issuance of the policy, its assignment to plaintiff, payment by plaintiff of all premiums except the first and the death of insured, there .being evidence for plaintiff of payment by him of first premium to defendant’s agent, a prima facie case for the jury is made out.
Appeal by plaintiff from. Dixon, Special Judge, at November Term, 1943, of JOHNSTON.
Civil action instituted 28 April, 1942, by plaintiff, tbe absolute as-signee, in a life insurance policy, issued upon tbe life of Cullen Creecb, ■8 April, 1935, in tbe sum of $2,500.00, by Sun Life Assurance Company •of Canada, to collect tbe proceeds of said policy, Cullen Creecb having •died on 9 May, 1941.
In tbe trial below, at tbe close of plaintiff’s evidence, defendants moved for judgment as of nonsuit. Motion granted and judgment entered .accordingly. Plaintiff excepted and appealed.
Edward G. Hobbs and Lyon & Lyon for plaintiff.
Abell, Shepard & Wood and Smith, Wharton <& Jordan for defendants.

Opinion:
DeNNy, J.
Tbe evidence discloses that L. D. Short solicited tbe insurance issued on tbe life of Cullen Creecb by tbe Sun Life Assurance Company of Canada, and procured tbe policy through Milton Best, tbe .agent and representative of tbe company. There is also evidence tending to show that L. D. Short delivered the policy to tbe plaintiff and collected from him tbe first annual premium on tbe policy, in tbe sum of $232.45; that Short failed to remit any part thereof to tbe company; that there.after tbe company changed tbe method of payment of premiums from an annual to a quarterly basis and also collected from tbe plaintiff through its office in Greensboro, N. C., the first annual premium on tbe policy on tbe quarterly basis.
Tbe appellees contend that under tbe decisions of this Court in Mills v. Ins. Co., 209 N. C., 296, 183 S. E., 287, and Thompson v. Assurance Society, 199 N. C., 59, 154 S. E., 21, tbe evidence to tbe effect that plaintiff paid to L. D. Short a certain premium or premiums, does not establish any liability on tbe part of tbe defendant insurance company, .since there is no evidence that tbe company received any part of the premiums paid to Short. Tbe position is untenable as to tbe payment of tbe first annual premium. It is held in Mills v. Ins. Co., supra, and in Thompson v. Assurance Society, supra, as well as in many other cases, that payment of tbe initial premium on a policy of life insurance to •insurer's soliciting agent is payment to tbe company. While tbe defendants deny that Short was tbe agent of tbe defendant company, there is ample evidence to show that L. D. Short was tbe soliciting agent or broker for the purpose of obtaining the insurance, and tbe agent of tbe company for tbe purpose of delivering' tbe policy. Therefore, if the plaintiff or tbe insured paid to Short tbe first annual premium on tbe policy, in tbe sum of $232.45, it would constitute payment to tbe company by virtue of tbe statute, G. S., 58-46; C. S., 6304.
In tbe ease of Williamson v. Ins. Co., 212 N. C., 377, 193 S. E., 273, it is stated: "Tbe authorities are to tbe effect tbat a recital of payment in a policy of insurance, unconditionally delivered, may not be contradicted to work a forfeiture of tbe policy, or to defeat a recovery thereon, in tbe absence of an allegation of fraud. Grier v. Ins. Co., 132 N. C., 542, 44 S. E., 28. To tbis extent it is contractual and binding upon tbe parties. Britton v. Ins. Co., 165 N. C., 149, 80 S. E., 1072. Compare Smith v. Land Bank, ante, 79. 'If tbe premium in fact is not paid, tbe acknowledgment of payment, so far as it is a receipt for money, is only prima facie, and tbe amount can be recovered; but so far as tbe acknowledgment. is contractual, it cannot be contradicted so as to invalidate tbe policy.' "
Tbe policy involved in tbis action states a premium is to be paid 8 April, 1935, in tbe sum of $232.45 and annually thereafter on 8 April in every year during tbe continuance of tbe policy. However, tbe policy was not executed by tbe company until 25 April, 1935, and tbe plaintiff testified tbe first annual premium was paid at tbe time of tbe delivery of tbe policy, which wa's necessarily some time after 25 April, 1935. Tbe recitals in tbe policy in tbe case of Williamson v. Ins. Co., supra, could not be contradicted in tbe absence of an allegation of fraud. In tbe instant case, however, tbe plaintiff must show payment of tbe premium as alleged. Upon such showing, tbe company will be required by virtue of GL S., 58-46, to give credit therefor, whether or not any portion thereof was received by it.
Tbe defendants admit tbe issuance of tbe policy, tbe absolute assignment thereof to tbe plaintiff, tbe payment by plaintiff of all premiums received by tbe company on tbe policy and tbe death of tbe insured. Notwithstanding tbe admission by plaintiff tbat be has paid no premiums on tbe policy since June, 1940, at which time be was notified by tbe company tbe policy bad lapsed, tbe evidence tending to show payment of tbe first annual premium to tbe soliciting agent, for which be has been given no credit by tbe company, together with tbe above admissions, made out a prima facie case for tbe jury. Blackburn v. Woodmen of the World, 219 N. C., 602, 14 S. E. (2d), 670; Williamson v. Ins. Co., supra; Creech v. Woodmen of the World, 211 N. C., 658, 191 S. E., 840; Knight v. Ins. Co., 211 N. C., 108, 189 S. E., 121; Harris v. Jr. O. U. A. M., 168 N. C., 357, 84 S. E., 405; Wilkie v. National Council, 147 N. C., 637, 61 S. E., 580; Kendrick v. Life Ins. Co., 124 N. C., 315, 32 S. E., 728.
Whether or not tbis policy was in force at tbe time of tbe death of tbe insured, if tbe jury should find tbat tbe first annual premium thereon was paid to Short and tbat plaintiff has been given no credit therefor by tbe company, is not presented for our determination. Tbe status of tbe policy, after crediting the sum of $232.45 thereon, if it should be determined that said amount should be credited by the defendant company, will be determined under the provisions contained in the policy for extended insurance.
Plaintiff offered no evidence in support of the allegation in the complaint as to the liability of the defendant Milton Best, hence the judgment below as to him should be affirmed.
Affirmed as to defendant Milton Best.
Reversed as to defendant Sun Life Assurance Company of Canada.