45 S.E. 649 | N.C. | 1903
This is an action to recover the proportionate amount of certain premiums paid on a life insurance policy, or "benefit certificate," as it appears to be called in the nomenclature of the association, upon a reduction of the face value of the policy. On 15 August, 1883, the defendant association issued to the plaintiff Metrah Makely a benefit *300 certificate in the nature of a life policy, promising to pay to the wife of said Makely at his death a sum not exceeding $5,000. The insured paid all premiums and assessments up to September, 1900, when, without any default or consent on his part or the beneficiary of the policy, the face value thereof was reduced from $5,000 to $2,000, with a corresponding reduction in the amount of the premium. The plaintiff, referring to the insured, testified as follows, without contradiction: "I was insured 15 August, 1883; was insured before this; exchanged first policy for this one. I paid all premiums up to September, 1900. After that date I sent premiums to Newman, treasurer of Council, but they were returned. They sent back three-fifths and kept two-fifths of premiums. I (369) did not agree to this. I wanted to keep up my insurance for $5,000. Finally I wrote them, as they would not receive full amount of premium, there was no use for me to continue to send full amount; sent full premiums for year after the change; told treasurer, Newman, I objected to my insurance being cut down. I did not acquiesce in my insurance being cut down to $2,000; I protested against it. I afterwards agreed to pay two-fifths of premium. No complaint has ever been made of my failing to keep other agreements referred to in the application. To January, 1902, I paid $3,006.40, not including interest. Including interest to 1 January, 1902, have paid $4,231.46. Application dated 9 August, 1881. No notice was given me that they were going to make change referred to in by-law before change was made. There was no friction between me and defendant until by-law was changed. I paid all the premiums. Sometimes had to pay one, sometimes two, and sometimes three premiums per month. A check dated 28 December, 1900, was for the full amount of premium, and was returned. I paid full amounts all along as they became due; think checks were not sent back to me right away. Can't tell when check was first returned to me. I commenced sending two-fifths of original amount, and have kept it up to present. I am still a member, and have recently paid two-fifths of original premium; have kept it (two-fifths) up. I am, I suppose, still insured for $2,000. I am still holding policy. Am suing for damages for destroying policy. We didn't expect damages for more than three-fifths; I claim damages for three-fifths of policy." Redirectexamination: "I paid the two-fifths under protest, because they would not receive the whole amount; protested when I sent two-fifths amount. Paid since September, 1900, $470."
The defendant offered very little testimony, the greater part of which was properly excluded as irrelevant. What was admitted raised no material issue of fact. *301
Practically, the case is before us on questions of law, which (370) we think have been substantially decided in the following cases:Strauss v. Life Assn.,
The defendant has filed with us a copy of a recent opinion of the Court of Appeals of New York, delivered 7 April, 1903, inLangan v. Legion of Honor,
"But he was not obliged to remain thus quiescent and to incur apprehended risks which might present themselves to his mind as possibly consequent upon the illegal act of the defendant. He was fairly and justly entitled to know his rights and to have such protection against the apprehended consequences as the court might afford him. He could invoke the exercise of the power of a court of equity to protect his rights by compelling the defendant to receive his assessments upon a basis of an insurance of $5,000 and to recognize the contract as in force. With just grounds to fear the consequences of the illegal corporate act, he could demand the issuance of a writ of prevention to accomplish the ends of precautionary justice by restraining the defendant from carrying out the amended by-law."
It appears that three of the seven judges dissented in this case without, however, giving any reason therefor. As they dissented from the judgment, it would seem that they must concur in the opinion that the defendant could not legally reduce the amount of its policy, and dissented only from that part of the opinion holding that the plaintiff could not recover in damages; otherwise, they would have concurred in the result. With the highest respect for that able Court, we cannot concur in the opinion that the plaintiff cannot recover his premiums because the contract is still enforcible. We do not think the plaintiff should be denied his only practicable remedy simply because the action of the defendant is unlawful and void. In view of the persistence of the defendant in pursuing its arbitrary and unlawful course, it would seem a denial of substantial justice to require the insured to bequeath to his wife a *303 lawsuit for the support of her declining years, or to force him back into a hostile association where he would have no effective means of protecting his rights. We think it but just to say to the (373) defendant: "You have refused to recognize your legal obligations to the insured; now pay back the money you have received as the consideration for your repudiated contract."
There are two contentions strenuously urged by the defendant in its oral argument and elaborate brief which remain to be considered. It insists that the policy did not stipulate to pay the fixed sum of $5,000 upon the death of the insured, but only agreed to pay some indefinite sumnot exceeding that amount. If this contention were correct and carried to its legitimate conclusion it would enable the defendant to meet its obligations upon its own terms and thus defeat the essential elements of a contract. Such a construction would doubtless insure the continued existence of the association in a prosperous condition, but it contains no element of reciprocity, and we cannot suppose that it was ever contemplated by the plaintiff. For seventeen years the defendant continued to receive from the plaintiff the full premium based upon a policy for $5,000, and when it reduced the face of the policy to $2,000 it reduced the premium in proportion. Under such circumstances we must hold that the benefit certificate was in legal effect an insurance policy for $5,000. Again, it is contended by the defendant that the plaintiff accepted the reduction in the amount of his policy by continuing to pay the reduced premium, and that he thereby waived all right of recovery for breach of the original contract. We do not think so. There is certainly no evidence of an intentional waiver, and there are no facts demanding a constructive waiver in the face of the repeated tender and protest on the part of the plaintiff. The plaintiff protested against the reduction of his policy and continued for a year to pay to the defendant the full amount of his original premium or assessment, three-fifths of which was always returned. Finding it was useless to continue this method of procedure, he again protested against the reduction of (374) his policy, continued to pay the reduced premium, and brought suit to recover the three-fifths of his back premiums paid upon the repudiated portion of his policy. He received nothing from the defendant in consideration of any implied waiver. The defendant did not pay him any money, nor did it give him any additional benefit or security. It simply repudiated three-fifths of its contract of insurance. It is true, it reduced its premium in proportion, but it did not repay or offer to repay any part of the premiums already paid on the full amount of the policy. If it can do that, why can it not still further reduce the value of the policy to $500 or even to any nominal sum? Any such construction *304 would defeat the essential objects of insurance, and cannot be supposed to have been bona fide in the original contemplation of either party to the transaction. There are other exceptions of the defendant, but none of them can be sustained under the decisions of this Court.
The judgment is
Affirmed.
Cited: Caldwell v. Ins. Co.,
(375)