Court Opinion

ID: 6696730
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:53:53.52528+00
Date Added: 2024-06-11T16:01:16.370018
License: Public Domain

Clakk, O. J.
Tbe policy of insurance in tbis case was issued in favor of tbe executor or administrator, tbe application was signed by plaintiff’s intestate, and tbe plaintiff, as bis administrator, was tbe proper party to bring tbe action. C. S., 159.
Tbis is not an action upon tbe policy itself, wbicb was not delivered, but upon tbe wrongful act or negligence of tbe defendant company through its agent to deliver tbe policy in accordance with tbe agreement entered into with tbe intestate.
It is true that if it bad been stipulated in tbe application for this policy that tbe insurance applied for should not take effect until 60 days thereafter, and then only upon tbe applicant’s continued health, tbe insurance company would have incurred no liability bad tbe applicant died during tbe 60-day period. Tbe difference between that case and tbe present is that here tbe company made an agreement with tbe intestate, and tbe failure to comply with that agreement by tbe negligence of tbe defendant company through its agent was tbe cause, as tbe plaintiff alleges, of bis failure to receive tbe policy, and tbe loss accruing therefrom is a liability incurred by tbe negligence of tbe defendant.
When tbe condition upon wbicb tbe contract of insurance was to take effect never occurred, of course no insurance is effected; but when tbe negligence of tbe company to .comply with tbe conditions specified in its contract for tbe delivery of tbe policy was tbe cause of tbe failure to deliver tbe same, tbe defendant company was liable for tbe loss sustained by tbe negligence of tbe agent of tbe defendant company. Tbe defendant by such' negligence breached tbe legal duty which it owed to tbe plaintiff’s intestate, and for tbe damage sustained thereby an action in tort may be maintained.
Tbe testimony is that tbe defendant adopted tbe custom in carrying on its business of accepting applications, and issuing applications therein for delivery by its agent, stipulating in tbe application that tbe premium should be paid on delivery of the policy, and that tbe policy would, be in force and premiums collected therein as and from tbe date thereof. Tbe defendant, therefore, cannot escape liability -when there is uncon-tradicted evidence that but for tbe unreasonable delay of its agent in making; delivery of tbe policy to plaintiff’s intestate, tbe policy would have been delivered while tbe plaintiff’s intestate was in good health. *124The application for the policy was received, at the borne office in Chattanooga on 7 June, 1921, was duly approved and accepted by the defendant, wbo, on 15 June, sent the policy so dated to its local agent at Mars Hill, N. C., for delivery to the plaintiff’s intestate.
It bas been repeatedly beld tbat an insurance company is chargeable with the negligence of its agent for failing for an unreasonable time to forward the application and medical report for acceptance or rejection. Duffey v. Life Assn., 160 Iowa, 19; 46 L. R. A. (N. S.), 25. There is a full discussion and collection of the cases relating to unreasonable delay in acting upon applications for insurance in Bradly v. Federal Life Ins. Co., 15 L. R. A., 1021, and in the notes thereto. In this case there was no negligence by any unreasonable delay in forwarding the application, nor in acting upon it, but the application was accepted and the policy was issued and signed on 15 June, and promptly forwarded to the defendant’s delivering agent in an envelope stating on the back tbat the applicant was “now a policy bolder in the Volunteer State Life Insurance Company,” the defendant in this action.
This policy, in the ordinary course of mail, should have come to the bands of the defendant’s delivering agent on the next day, 16 June. He lived not far from the insured, wbo met him a few days after the receipt of the policy, and the agent told him tbat be bad the policy for delivery. the assured told him be was ready to pay the premium, and asked the agent to make delivery, which the agent promised to do. the assured remained in good health until 2 July — -15 days thereafter, when be was stricken with typhoid fever, and the agent made no effort to deliver until 6 July, when be declined to deliver because at tbat time the assured bad been taken ill. Had the policy, when placed in the mail on 15 June, been directed to the insured, this would have been a delivery in law. Lynch v. Johnson, 171 N. C., 611. the fact tbat it was sent addressed to the defendant’s agent made the agent a trustee for the delivery to the insured, and it was negligence on the part of the agent not to deliver it in reasonable time, and this negligence was the negligence of the company.
If the defendant’s agent wrongfully failed to deliver the policy within a reasonably short time after its receipt, during which time the plaintiff’s intestate was in good health and ready, able, and willing to pay the premium on delivery, as stipulated, and plaintiff’s intestate having thereafter become ill, the defendant could not withhold the delivery so as to release it from responsibility. Trust Co. v. Ins. Co., 173 N. C., 563.
The defendant bad a form of receipt attached to its application for advance payment of premium, and it was stipulated therein that the insurance was effective from the date of tbe approval of the application *125from the defendant’s medical director. Tbe agent elected to waive the advance payment on the premium, and stated that the premium was to be paid on delivery of the policy. The defendant accepted the application and issued its policy with knowledge of the waiver and stipulation. That is, it agreed that the insurance was to be effective from the date of the approval of the application by its medical director, but that the premium need not be paid until the policy was delivered.
In Paul v. Ins. Co., 183 N. C., 159, it was held: “The time limited by a contract of life insurance for the payment of premiums to avoid a forfeiture is for the benefit of the insurer (the company), which it may waive by its acts and conduct.”
In Elam v. Realty Co., 182 N. C., 602, this Court said: “This action is not one against the insurance company in which plaintiff is seeking to hold it liable for an obligation not contained in the written policy, but plaintiff sues the agent broker for negligent failure to perform a duty he had undertaken and assumed as agent, by which plaintiff has suffered the loss complained of, and in our opinion the authorities cited are not apposite to the question presented on the record. It is further insisted for defendant that no cause of action is disclosed because there is no consideration given for defendant’s promise, but the better considered decisions on this subject are to the effect that while the agent or broker in question was not obligated to assume the duty of procuring the policy, when he did so the law imposed upon him the duty of performance in the exercise of ordinary care.”
The liability of the agent for negligently failing to perform his duties is clear, and the defendant is also liable for the acts and omissions of its agent within the scope of his employment. The duty rests upon every man to so conduct his affairs whether by himself or his agent as not to injure another, and if he does not do so, and another is thereby injured, he shall answer for the damages. Inasmuch as he had made it possible for his employee to inflict the injury, it is but just that he should be held accountable. 21 R. C. L., pp. 844 to 846; Williams v. Lumber Co., 176 N. C., 180.
The soliciting agent of the defendant is made its agent and not the agent of the applicant. C. S., 6457. There are numerous decisions to the above effect.
The above authorities exactly apply to the case before us, and with the additional force that in this instance during the 15 days from the receipt of the policy to the time (2 July) during which the insured was in good health, he met the defendant’s agent, who told him he had the policy for delivery and would deliver the same, and the assured told him that he was ready and able to make the payment and asked for the delivery, and there is the additional fact in this case that the policy *126stated on its face that it was in effect from its date, from which time forward payments of premiums were to be counted, and the defendant was aware of the agreement that the company waived payment of the advance premium until its agent should make delivery.
Whether a policy is for life insurance or for fire insurance, the party making the application is entitled to have the security he asks for, and when his application has been accepted, as here, upon an agreement that the policy shall be valid from such acceptance, the insured should not be deprived of the benefit of the policy by the negligence of the company’s agent in making delivery.
In Duffey v. Life Ins. Co. (Iowa), 46 L. R. A. (N. S.), 25, it is held: “An insurance company is chargeable with the negligence of its agent in failing for an unreasonable time to forward application and medical report for acceptance.”
It is held that the insurance company is liable for negligent delay in passing upon or issuing a policy until a loss. Boyer v. Ins. Co., 40 L. R. A. (N. S.), 164; and for unreasonable delay in passing upon an application. Ins. Co. v. Neafus, 36 L. R. A. (N. S.), 1211.
This case is much stronger, for here the application was accepted, the policy .was issued, and was sent to the defendant’s agent for delivery. He gave notice of its possession to the assured, who asked for its delivery and offered to pay the premium, and the failure to deliver was caused by the unreasonable delay of the' agent, who should have delivered it, or, at least, the jury should have been permitted to find as a fact upon the evidence whether the delay was unreasonable or not.
In the very recent case of Ins. Co. v. Phillips, 113 S. E., 815, in which the opinion was filed 26 September, 1922, the Court of Appeals of Georgia held: “The deposit by the insurer in the mails of a policy of life insurance, addressed to the local agent of the insurer for delivery to the insured, upon which the premium has been paid and accepted by the insurer, amounts to its acceptance of the application and the delivery of the policy to the insured, and is a binding contract of insurance, and this is not defeated by the death of the insured before delivery of the policy, when at the time of the deposit of the policy in the mails he was alive and in good health, although he died before it was actually received by the local agent for delivery,” citing 14 R. C. L., 899; 25 Cyc., 718; 16 A. & E. (2 ed.), 855; Joyce on Insurance (2 ed.), sec. 90; Kilborne v. Ins. Co., 99 Minn., 176; Francis v. Ins. Co., 55 Oregon, 280. To same purport, Hoke, J., in Waters v. Annuity Co., 144 N. C., 663.
The judgment of nonsuit should be set aside, and it must be submitted to the jury to pass upon the question whether upon the evidence there was unreasonable delay on the part of the defendant’s agent in the delivery of this policy to the assured.
Reversed.