Court Opinion

ID: 6698623
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:02:30.92101+00
Date Added: 2024-06-11T16:01:20.102755
License: Public Domain

DeNNY, J.,
concurring: Tbe opinion disposes of tbe questions properly presented upon tbe petition to rehear, but, in view of tbe position' taken in tbe dissenting opinion, I deem it not improper to discuss tbe extraneous questions raised.
It is true tbat no specific issue of damages for breach of tbe insurance contract was tendered by tbe plaintiff, but an issue based on tbe alleged wrongful cancellation of tbe policy was tendered and its submission to tbe jury refused by tbe trial judge. It was beld in tbe original opinion, reported in 223 N. C., 500, 27 S. E. (2d), 148, tbat this was error, and *4the majority opinion adheres to the original decision. The issues tendered by the plaintiff were intended and were sufficient to cover' both phases of the case.
In the dissenting opinion it is stated: “The original opinion assumes that the complaint states, and plaintiff relies upon, two causes of action. In this I think there is error.” In the trial below the defendant made no such contention, and, as stated in the majority opinion, “the case was tried on both causes of action and there was no objection or challenge to the joinder of the two causes of action in the same complaint.”
Plaintiff’s right to bring an action for breach of the insurance contract is challenged on the following grounds: (1) plaintiff had no vested interest in the policy during the life of the insured because the right to change the beneficiary was reserved by the insured; (2) there is no contract relation between the plaintiff and the defendant; and (3) the policy being canceled and the contract terminated during the life of the insured, the beneficiary loses any contingent interest he may have had; for his rights, if any, are predicated upon the existence of the contract.
In the first place, the challenge comes too late, none of these questions were raised in the trial below or before this Court when the case was here on appeal, they are raised for the first time in the brief on rehearing. In the case of Gorham v. Ins. Co., 214 N. C., 526, 200 S. E., 5, it was held: “The rule is, that an appeal ex necessitate follows the theory of the trial. Dent v. Mica Co., 212 N. C., 241, 193 S. E., 165; Keith v. Gregg, 210 N. C., 802, 188 S. E., 849; In re Parker, 209 N. C., 693, 184 S. E., 532. Having tried the case upon one theory, the law will not permit the defendant to change its position, or To swap horses between courts in order to get a better mount in the Supreme Court.’ Weil v. Herring, 207 N. C., 6, 175 S. E., 836; Holland v. Dulin, 206 N. C., 211, 173 S. E., 310. ‘The theory upon which a case is tried must prevail in considering the appeal, and in interpreting a record and in determining the validity of exceptions’—Brogden, J., in Potts v. Ins. Co., 206 N. C., 257, 174 S. E., 123.” See also Gorham v. Ins. Co., 215 N. C., 195, 1 S. E. (2d), 569.
In the second place, I do not concede that plaintiff’s interest was contingent and that he could not have brought an action during the life of the insured, in the light of the facts disclosed on this record: (1) The right to change the beneficiary was a restricted one. The policy states, “The right on the part of the insured to change the beneficiary, in the manner hereafter prescribed, is reserved.” The record does not disclose the manner provided for changing the beneficiary; (2) at the time of the lapse, or wrongful cancellation, of the policy, the insured had been adjudged non compos mentis and committed to the State Hospital for the Insane, and was incapable of changing the beneficiary; and (3) the *5beneficiary in this policy had furnished the consideration money of the contract.
Justice Walker, in speaking for the Court in the case of Wooten v. Order of Odd Fellows, 176 N. C., 52, 96 S. E., 654, said: “The general rule is that the right of a policy of insurance, at least to one of the ordinary character, and to the money which may become due under it, vests immediately, upon its being issued, in the person who is named in it as beneficiary, and that this interest, being vested, cannot be transferred by the insured to any other person (Central National Bank v. Hume, 128 U. S., 195) without his consent. This does not hold true, however, when the contract of insurance provides for a change of the beneficiary by the insured, or such a right arises in some other way, for in such a case the right of the beneficiary vests conditionally only, and is subject to be defeated by the terms of the very contract, or instrument, which created it, and is destroyed by the execution of the reserved power'. These principles, we take it, are well settled by the highest authority and great weight of judicial opinion. 4 Cooley’s Briefs on the Law of Insurance, par. 3762-3772; Nally v. Nally, 74 Ga., 669; McGowan v. Supreme Court of Ind. Order of Foresters, 104 Wis., 173; Shoenan v. Grand Lodge, 85 Minn., 349; Sanburn v. Black, 67 N. H., 537; St. L. Police Relief Assc. v. Strode, 103 Mo. App., 694; Luhrs v. Luhrs, 123 N. Y., 367; Donnelly v. Burnham, 86 App. Div. (N. Y.), by Hun., p. 226 (Aff. in same case, 177 N. Y., 546) ; Hancock Mutual L. Ins. Co. v. White, 20 R. I., 457.”
In this jurisdiction where one not a party or privy to a contract, but who is a beneficiary thereof, and furnishes the consideration money of the contract, such beneficiary is entitled to maintain an action for its breach. Whatever the law may be elsewhere, this Court, in the leading case of Gorrell v. Water Supply Co., 124 N. C., 328, 32 S. E., 720, laid down the above principle of law, which has been adhered to for more than half a century. The plaintiff had a vested interest in the policy prior to the death of the insured.
In 29 Amer. Jur., sec. 313, p. 286, it is said: “It is generally held that a beneficiary who has a vested interest in a policy may protect his rights and has a cause of action for damages in case of the wrongful cancellation or repudiation of the insurance contract by the insurer, but a beneficiary who has no vested interest cannot maintain such a suit. Vicars v. Mutual Ben. Health & Acci. Asso., 259 Ky., 13, 81 S. W. (2d), 874, citing R. C. L., 124 Wis., 221, 102 N. W., 593, 109 Am. St. Rep., 931.”
Notwithstanding the uneontradicted evidence that over a period of twelve years and six months, the defendant collected fifty quarterly premiums, of $9.46 each, from the plaintiff, beneficiary, in this policy, the dissenting opinion states: “The defendant was under no legal.obliga*6tion to give plaintiff notice of premiums. It was its duty to notify tbe insured. That plaintiff received no notice is no indication tbat notices were not duly mailed, as required by statute — C. S., 6465; G. S., 58-207.” I tbink tbe long course of dealing between tbe plaintiff and tbe defendant, tbe fact tbat tbe beneficiary field tbe policy, together with tbe admission by tbe defendant tbat it knew tbe insured was insane, necessitated notice to plaintiff as required by law.
Tbe question as to whether or not a notice was sent to tbe plaintiff or tbe insured, is now settled. Tbe defendant admits, for tbe first time, in its brief on rehearing, tbat “Tbe defendant sent no notice complying with tbe statute of tbe premium due August 27, 1939.” It still contends, however, tbat plaintiff does not know whether tbe policy was wrongfully canceled or not, since it has not seen fit to disclose tbe date of its action in tbat respect. Tbe defendant states in its petition to rehear : “It does not appear from tbe statement in tbe further answer, even if it bad been introduced, whether tbe defendant’s act of mailing check took place during or after tbe grace period figured from August 27, 1939, or even whether it took place within or after tbe year’s extension of tbe grace period, granted by O. S., 6465.”
An insurance company will not be permitted to admit tbe execution of a policy of life insurance and tbe death of tbe insured and merely deny tbe policy was in force at tbe time of tbe death of tbe insured, unless it elects to run tbe risk of an adverse verdict. Urey v. Ins. Co., 197 N. C., 385, 148 S. E., 432. Tbe burden of proving tbe policy was not in force at tbe time of tbe death of tbe insured is on tbe defendant. Page v. Ins. Co., 131 N. C., 115, 42 S. E., 543. This is in conformity with tbe rule laid down in 25 Cyc., 927, which is as follows: “Ordinarily, where tbe company pleads tbe failure to pay premiums or assessments, tbe burden is on it to prove such failure. And if a statute requires service of notice by tbe company on tbe insured before a forfeiture can be declared, tbe company has tbe burden of proving tbe service of such notice.”
Tbe case of West v. Ins. Co., 210 N. C., 234, 186 S. E., 262, is not in point.
It is conceded tbat when a policy is wrongfully canceled by an insurance company, if tbe insured desires to insist upon reinstatement and continuance, be must pay or offer to pay tbe premium called for in tbe contract. But, suppose a policy is wrongfully canceled and tbe insured does not tender tbe premium or request reinstatement of tbe insurance contract. Is be to be denied redress for tbe injury be has sustained by reason of the wrongful cancellation of tbe policy? Such is not tbe law. Tbe original opinion and tbe opinion dismissing tbe petition to rehear, do not undertake to pass upon tbe merits of this controversy, further than to say tbe plaintiff, under tbe facts presented, is entitled to have a *7jury pass upon tbe question as to whether or not the company did wrongfully cancel the policy. If it did so, the plaintiff is entitled to recover the damages he has sustained by reason of the breach; if not, the defendant will be absolved from any liability arising out of the alleged breach. Likewise, whether or not the plaintiff has performed his own antecedent obligations to the insurance company as required, in order to prevail on the issue of wrongful cancellation, is now a matter of proof. This Court has decided only that he shall be given an opportunity to present his case, based on alleged wrongful cancellation, to the twelve.
I do not think the other authorities cited in the dissenting opinion are authoritative, when considered in relation to the facts and questions presented on the record in this case.