Ormond v. . the Insurance Co.

Smith, C. J., (after stating the facts). Among the clauses found in the application, made with the by-laws and by express words in the policy, a part of it, is the following: “ 3. That under no circumstances shall the policy hereby applied for be in force, until the actual payment to, and acceptance of the annual dues by the Association or its authorized agent, during the life-time and good health of the party who is proposed for membership and insurance.” The policy itself contains a recital clause, declaring, “ and whereas the first payment of such annual dues having first been received by the treasurer or an accredited agent of the Association,” &c. Accompanying the policy and attached to it, is the form of a receipt used by the company in these words: “ The Fidelity Mutual Life Association of Philadelphia, Pa. Philadelphia, Pa., Nov. 19, 1884. Office, 908 Chestnut St. Received from the owner of Policy No. 6934, in the life *162 time, fifteen dollars, for the annual dues, due the 19th day of November, 1884. Portermsofmutualagree-1 Arthük ThatcheB; ment, see application and > R a House, President.” policy . At the foot of the receipt, and in the left corner, is the following: “ Notice to Policy Holders: This receipt to be valid, must be signed by the president or treasurer of the Association, and in exchange therefor, cash or its equivalent be given by the holder of the policy at the date hereof, or within three days allowed by the Association. And when payment hereon is made to an authorized agent, such agent must countersign at the date of paying, as an evidence of jiayment to him.” Beneath the acknowledgment is this: “ Countersigned at .,. , agent,” but without any signature of the agent. The policy thus with the attached receipt, plainly declares that the required precedent payment has not been made, and must be paid to the agent before the contract of insurance becomes complete and operative on the Association, and the policy becomes effectual. Indeed, the recital seems to contemplate the payment as an essential condition of a valid delivery by the agents, to whom the policy was sent. Moreover, this must be “during, the life-time and good health” of the party to be insured. The policy, incorporating with it the other papers by reference, if it be deemed effectual from its date, and the delivery of it in the manner stated effectual, constitutes the contract between .the parties, by which their respective rights and obligations are to be ascertained, and the dues were not paid until four days after the death of the insured. This *163 certainly was not a compliance with the fundamental conditions on which its validity was dependent. The plaintiff insists, that the initiatory payment was dispensed with and waived by the soliciting agent at the time of taking the application, and if not then, by the unqualified transmission to him by the general agent of the policy received by them. The facts do not warrant this contention. The plaintiff, in answer to his inquiry of the agent, McGee, when he would be required to pay, was informed that payments were sometimes made at the taking of the application, and sometimes when the policy was delivered, and in exercising his discretion, the plaintiff said he would pay at the later period. There was no waiver in the case, and the plaintiff, under the agent’s advice, was but availing himself of an allowed option —a conceded right. There was no waiver by the general agents, nor had they authority to dispense with the prepayment, if indeed an inference of an intent to do so can be drawn Rom their act of forwarding the policy without countersigning the receipt. The actual receipt of the dues was indispensable to the efficiency of the insuring contract, and this being a provision in the application, is brought to the knowledge of the plaintiff and forms part of his contract. In Whitley v. Life Ins. Co., 71 N. C., 480; it is declared, that a policy of life insurance is'not binding until the premium is paid, a clause requiring prepayment being contained in the application; and further that any material change in the condition of the health of the insured, intermediate and before the consummation of the contract by payment of the premium, should be communicated to the company. The clause under which the policy, and of course the contract consummated by its issue, became inoperative, is an underlying and essential part of the agreement, and no agent can dispense with its requirement. The policy, as we interpret its recital, makes this a prerequisite to its taking effect *164 by delivery, as does the form of acknowledging payment. The plaintiff therefore, knows that actual payment must be made, and that “ under no circumstances ” can the policy be in force without it is made. We do not propose to enter upon other inquiries discussed with great learning, and after much research, on either side, such as the omission to give information of the sickness of the insured, and the explanation offered for the failure, and the period at which the contract became effective; and will only say, that as there are conditions in the policy not contained in the application, which constitute, after acceptance, part of the policy, it would seem that the plaintiff being at liberty to decline the added conditions, his assent to them would be necessary to a completed agreement. Without passing upon other matters, we put our decision, in accordance with numerous rulings in adjudged cases, upon the ground that the clause in the policy referred to, constitutes a condition precedent, and the waiver relied on does not dispense with it. There is no error, and the judgment is affirmed. No error. Affirmed.