Case Name: G. H. BROCKENBROUGH v. MUTUAL RESERVE LIFE INSURANCE COMPANY
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1907-11-06
Citations: 145 N.C. 354
Docket Number: 
Parties: G. H. BROCKENBROUGH v. MUTUAL RESERVE LIFE INSURANCE COMPANY.
Judges: CoNNOR, J"., concurs in dissenting opinion of Walker, J.
Reporter: North Carolina Reports
Volume: 145
Pages: 354–366

Head Matter:
G. H. BROCKENBROUGH v. MUTUAL RESERVE LIFE INSURANCE COMPANY.
(Filed 6 November, 1907).
Insurance — Mutual Life Companies — Stockholder—Statute of Limitations — Estoppel.
While the statute o£ limitations does not run against the nonresident defendant, a mutual life insurance company, the plaintiff, who was a policyholder therein, is estopped, after a lapse of nearly seven years without having paid his premiums thereon, from recovering the principal and interest paid on said policy.
Waekee and Connor, JJ., dissenting.
Civil actioN, tried before Peebles, J., and a jury, at October Term, 1906, of the Superior Court of MeckleNbueg-County.
Plaintiff moved for judgment upon the facts alleged in the complaint .and admitted in the answer. Motion overruled, and'plaintiff appealed.
Chase Brenizer for plaintiff.
John W. Hinsdale for defendant.

Opinion:
Claee, C. J.
On 15 December, 1891, the defendant adopted a resolution under which it would assess the plaintiff according to the table for "attained age" endorsed on his policy. He paid the first assessment made upon that basis under protest, and thereafter paid them without objection till an assessment was levied 1 February, 1899, when he quietly and silently dropped 'out, making no complaint or demand till tbe summons was issued in tbis action, 18 January, 1906.
In Green v. Insurance Co., 139 N. C., 312, it is said that "tbe plaintiff voluntarily ceased payment and abandoned bis policy. He cannot be beard to ask damages for its cancellation. Insurance Co. v. Phinney, 178 U. S., 327; Insurance Co. v. Sears, ib., 347; Byan v. Insurance Co., 96 Fed. Rep., 796. In every case where damages bave been allowed for tbe cancellation of a policy of insurance it was alleged and proved that tbe cancellation was wrongful. Braswell v. Insurance Co., 75 N. C., 8; Lovick v. Life Association, 110 N. C., 93; Burrus v. Insurance Co., 124 N. C., 9; Hollowell v. Insurance Co., 126 N. C., 398; Strauss v. Life Association, ib., 971; Simmons v. Life Association, 128 N. C., 469. His motive, or tbe method of reasoning by which be arrived at bis conclusion to abandon bis policy, was irrelevant."
It is true that tbe statute of limitation does not run in favor of tbe nonresident defendant (Green v. Insurance Co., supra), but tbe plaintiff, having abandoned bis policy and stopped payment thereon in February or March, 1899, cannot be beard to assert any rights thereunder in this action, nearly seven years thereafter. He is estopped by bis abandonment and delay. 2 Póm. Eq., sec. 818, says upon tbis bead"Tbis species of estoppel, as well as-other kinds which consist of affirmative acts or representations, applies'to corporations in their dealings with third persons and with their own stockholders. Conversely, stockholders may be estopped by their acquiescence from objecting to tbe acts of tbe corporations which are not illegal or mala prohibita, but ultra vires. When the rights of innocent third parties have intervened, express assent is not necessary to estop the stockholders. When they neglect to promptly .and to actively condemn the unauthorized act and to seek judicial relief after knowledge of its being done, théy will be deemed to have acquiesced and will be estopped as against innocent third persons." To same purport many other authorities can be cited.
.An insurance company exists by means of tbe payments it receives. These must be regular, that it may meet its liabilities. A member cannot drop out, disregard'his duties and make no payments for nearly seven years, and then assert by action .a claim that the other members be assessed to pay him what possibly he might have recovered if he had asserted his claim in apt time. Many thousands of new members have come in, who ought not to have the fund, created almost if not entirely of payments made since the plaintiff dropped out, subjected to payment of claims of which they had no notice and which may be thousands in number and aggregate hundreds of thousands of dollars in amount. If seven years' acquiescence and nonpayment of assessments do not estop the plaintiff, then there is no limit of time or of nonpayment that will bar. No one would be safe in becoming a member of a mutual life insurance company under such circumstances. Leges subveniunt vigilamtibus non dormientibus. The Court properly sustained the demurrer to the evidence.
No Error.