Case Name: W. G. SYDNOR v. McDOWELL BOYD
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1896-09
Citations: 119 N.C. 481
Docket Number: 
Parties: W. G. SYDNOR v. McDOWELL BOYD.
Judges: 
Reporter: North Carolina Reports
Volume: 119
Pages: 481–489

Head Matter:
W. G. SYDNOR v. McDOWELL BOYD.
Action on Note — Executory Contract — Conditional Contract — Failure of Performance by One Party to Contract Releases the Other — Married Woman — Body or Capital of Married Woman’s Estate — Transfer to Husband, Invalid When.
1. Where the promises of the parties to an executory contract are not independent but conditional and dependent .the one upon the other, failure of performance in whole or part by one party thereto discharges the other.
2. An insurance policy on the life of her husband, payable to a married woman, being a vested interest, is embraced in the word “body” as used in Section 1885 of The Code, which requires all contracts between husband and wife affecting “ the body or capital ” of the latter’s estate to be in writing and accompanied by the privy examination of the wife.
8. Defendant applied for two iiolieies of insurance, one on his own life, payable to his wife, and the other on the life of his wife, payable, to himself, and agreed to execute to the plainti£f(the agent) his note for the premiums on both. Upon delivery of the policies both were found to be payable to his wife, and he refused to accept them. Thereafter the agent took back the policies, and soon returned them with what purported to be a written assignment to defendant by his wife of the policy on her own life, unaccompanied by certificate of her privy examination. Upon assurances of plaintiff that the assignment was as effectual as if the policy had been originally made payable to him, defendant executed his note for the two premiums, but soon thereafter received a letter from the insurance company acknowledging receipt of the duplicate assignment but notifying him that the company assumed no responsibility as to the validity of the assignment. Thereupon defendant stated that he did not want the policies and denied his liability on the note; Held, in an action on the note by the payee, that the assignment of the policy being invalid, there was a failure on the part of plaintiff to perform his contract which released the defendant from his liability on the note.
Civil actioN, tried at Spring Term, 1896, of Subey Superior Court, before Norwood, J. Application had been made for two policies of insurance, one on the life of McDowell Boyd for $1,000, for the benefit of his wife Anna Louisa Boyd, and the other for a like amount on the life of the wife for the benefit of the husband. After a great deal of solicitation the defendant, McDowell Boyd, agreed to deliver to the plaintiff, Svdnor, agent of the Mutual Life Insurance Company of New York, a box of tobacco, and to execute his promissory note, dated June 5, 1895, and duo at a subsequent date in the same year, for $127, as the premium for both policies. When the policies were returned it appeared that Anna Louisa Boyd had been made the beneficiary in both, and her husband refused to receive them because of the failure to comply with the contract. The agent, Sydnor, thereafter took back both pol icies, but soon returned them with what purported to be an assignment by the wife to the husband of the policy on her own life, which transfer is as follows: “ For one dollar to me in hand paid, and for other valuable considerations, (the receipt of which is hereby acknowledged,) I hereby assign, transfer and set over to McDowell Boyd, of Pinnacle, N. 0., all my right, title and interest in this policy (596,751) issued by the Mutual Life Insurance Company of New York; and for the consideration above expressed I do also for myself, my executors and administrators guarantee the validity and sufficiency of the foregoing assignment to the above-named assignee, his executors, administrators and assigns, and their title to the said policy will forever warrant and defend.
“ANNA LOUISA BOYD.
“ Dated at Pinnacle, N. 0., this 1st day of July, 1895. In presence of W. G. Sydnor.”
Upon the assurance that the assignment placed the policy upon the same footing with the company, as if it had been originally made payable to him, the defendant executed the note for $127, on which the plaintiff has brought this action. Soon after executing the note, instead of the assent to the assignment expected the defendant received the following from the company :
“ Dbab Sir : A duplicate of assignment of Policy 596,-751 to yourself has been received and filed. The company assumes no responsibility as to its validity.
“ Respectfully,
“ C. F. BRESEE & SONS, Geni. Agts.,
“ Per Wooten.”
On receipt of this the defendant tendered the policies to the plaintiff and demanded his note, telling him that the policies were worthless to him unless written in accordance with the applications.
The policies of insurance were introduced as evidence, both of which contained the following conditions on the back thereof:
“ Notice to the holder of this policy. — No person, except an executive officer of the company or its secretary at its head office in New York, has power on behalf of the company to make, modify or alter this contract, to extend the time for paying a premium, to bind the company by making any promise or by accepting any representation or information not contained in the application for this contract. Any interlineations, additions or erasures must be attested by the signature of one of the above-named officers.
“ Assignments. — The company declines to notice any assignment of this policy until the original assignment or a duplicate or a certified copy thereof shall be filed in the company’s home office. The company will not assume any responsibility for the validity of an assignment.”
The following issues were without objection submitted to the jury:
“ 1st. Did the plaintiff as agent of the insurance company contract to deliver to defendant two policies of insurance as alleged by him and receive the note sued on in consideration thereof? Answer, ‘ Yes.’
“ 2d. Did plaintiff violate said contract ? Answer, ‘ No.’ ”
After the argument it was admitted by counsel for both parties that if the assignment was valid, so that policy could be collected by defendant in case of his wife’s death, the second issue should be answered “No”; otherwise it should be answered “ Yes.” There was a verdict by the jury on first issue on behalf of 'defendant; his Honor answered the second issue “ No ” on the evidence.
The defendant moved for a new trial on the ground that the court erred in instructing the jury to answer the second issue “ No,” and appealed from the judgment rendered.
Messrs. Carter de Lewellyn, for plaintiff.
Messrs. 'Glenn & Manly, for defendant (appellant).

Opinion:
AveRY, J.
(after stating the facts) : At common law the husband and wife, being deemed one person, were incapable of contracting with each other, and it was necessary to convey to a third person, as a conduit, in order to pass the title to property from one to the other. The rule was different in equity, where assignments or conveyances were held to raise a trust in favor of the assignee or grantee. Now, however, the wife is allowed to acquire title to property conveyed to her by the husband or any other person, the conveyances be ng liable, libe other deeds or instruments that pass title, to impeachment for fraud upon sufficient grounds. Walker v. Long, 109 N. C., 510; Osborne v. Wilkes, 108 N. C., 651; Woodruff v. Bowles, 104 N. C., 197; Battle v. Mayo 102 N. C., 347 ; Brown v. Mitchell, 102 N. C., 347; George v. High, 85 N. C., 99. The statute (Code, Sec. 1836) declares all contracts between husband and wife, subject to restrictions contained in the preceding section, (1835,) valid, unless contrary to public policy. The last named section provides that no contract between them made during coverture shall be valid to affect or change any part of the real estate of the wife or the accruing income thereof for a longer time than three years next ensuing the making of such contract, or to impair or change the body or capital of the personal estate of the wife or accruing income thereof for a longer time than three years next ensuing the making of such contract, unless such contract shall be in writing, as required for conveyances of land, &c." The section further provides that, in order to render such contract valid, the officer taking the private examination of the wife, as prescribed, must certify, among other things, that " it is not unreason-son able or injurious to her." If a policy of insurance for her beuefit constituted a part of the body of her personal estate the endorsement thereon was ineffectual to pass her interest to the husband and make him the beneficiary in her stead, as was at first contemplated. It was held in Hooker v. Sugg, 102 N. C, 115, that where the husband takeout a policy on his life for the benefit of the wife her interest vests in her immediately upon its execution. If the plaintiff attempted to comply with his contract by transmitting the beneficiary interest in the policy indirectly through the wife to the husband by assignment, instead of directly by the terms of policy itself, it was incumbent on him to see that her interest passed. If the word " body " in the statute is not meaningless, it must have been intended to ii elude a vested interest from which no present income is derived, though it has a present value dependent upon facts which need not be enumerated. The body of one's personal estate manifestly does uot include the income derived from it, but does include every such vested interest as a policy of insurance.
The wife, certainly with the assent of her husband, is empowered by law to assign her interest as a beneficiary in a life or fire insurance policy to a third person and where both join her interest passes, unless it is a violation of some enforcable stipulation in the contract of insurance to attempt to transfer the interest in that way. Here if, instead of the notice sent out by the company, it had assented to the validity of the transfer, such assent would have operated as an estoppel on it to deny the right of the husband to recover in case of the wife's death. Blachburn v. Insurance Co., 116 N. C., 821. But it would still have remained to determine whether in case of the wife's death the policy, without a further transfer such as was contemplated by the statute, would not belong to the wife's estate instead of to the husband as beneficiary. Pre-termitting the question upon which the judge below probably passed, viz., whether there was not a failure of consideration, unless the plaintiff complied with the original agreement by delivering the policies applied for, it is manifest that he failed to attain the same end by the indirect method of assignment. Upon his refusal to remedy the defect either by furnishing a policy in which the husband should be named as beneficiary, or making the transfer effectual in law to pass the beneficiary interest out of the wife, the husband was at liberty to renounce the entire contract. The defendant made application for the policies and agreed that, as a consideration for them, he would execute his promissory note. Upon the failure of the agent of the company to deliver the policies applied for, the defendant refused to execute his note and accept those tendered. Upon the agreement on the part of the plaintiff, which must be interpreted as meaning that the assignment should receive the assent of the company, so as at least to work an estoppel on it to deny its validity, the defendant was induced to execute the note. Where the promises of the parties to an executory contract are not independent but conditional, the one upon the other, the failure of one to perform his agreement in whole or in part operates as a discharge of the other party from promises conditioned upon such performance. Clark on Contracts, p. 651. In order to deprive the defendant of the right to insist upon a discharge from his promise, the intention to make the mutual agreements independent and unconditional must be clear. Clark, supra, p. 653.
The mutual stipulations of the plaintiff as agent and the defendant company were dependent the one upon the other, and as between them the failure to furnish a policy on the life of the wife, of which the husband should be the beneficiary, operated to relieve him from the payment of a promissory note given as a consideration for such a policy. The two policies were of such a nature that the consideration was not divisible. It was given to provide for each in case of surviving the other. Clark, supra, pages 651 to 653 ; 2 Parson's Cont., (8th Ed.,) bottom page 645 and note. If the defendant had paid the money instead of giving his note he could, on the failure or refusal to comply with the mutual and dependent promises, have recovered back. 1 Whfrton, supra, Sec. '520. For a like reason he could avoid the payment when sued by the payee on a promissory note given in lieu of the money. The defendant made application for two policies.
The insurance company distinctly and unequivocally refused to recognize the validity of the assignment, and while it recognized the agency of the plaintiff Sydnor to take the defendant's note or collect the premium paid as a consideration for a certain policy, it attempts to repudiate the promises he made as an inducement in procuring the execution of the note which was given in lieu of the money and constituted the consideration. It has been distinctly held by this Court that, where the insured is induced to pay money by a representation made by a local agent of the insurer, the latter will be estopped, after receiving the money so procured and placing it in its coffers, from denying the authority of the agent to make the representation which induced its payment. Bergeron v. Ins. Co., 111 N. C., 45; Follette v. Ins. Co., 110 N. C., 377.
There was error in the instruction that the plaintiff complied with his contract, and a new trial is granted to the defendant.
New Trial.