Smith v. . Insurance Company

ClabksoN, J. The defendant, at the close of the plaintiff’s evidence and at the close of all the evidence, made motions for judgment as in case of nonsuit. C. S., 567. The court below granted defendant’s motion at the close of all the evidence-, and in this we think there was error. *582 Tbe questions involved: (1) "Was tbe plaintiff at tbe time of tbe alleged injury or disability, an employee of tbe News and Observer Publishing Company, under wbat is known as tbe substitute rule, and did tbe defendant issue tbe group insurance and through its agent or agents collect tbe insurance premiums from plaintiff with knowledge of tbe substitute rulef (2) Did tbe defendant or its agent or agents after tbe group insurance was issued collect tbe premiums from plaintiff and by its acts, conduct, transactions or declarations treat tbe policy as still in force with knowledge of tbe substitute rul&f It is not denied that plaintiff has paid tbe premiums required by defendant. We think tbe whole question depends on tbe fact as to whether when defendant issued tbe "group insurance” it knew of tbe substitute rule, or with knowledge of tbe rule received premiums and by its acts, conduct, transactions or declarations treated tbe policy as still in force. Tbe certificate says: “This insurance will cease upon failure on the part of the employee la pay the required premium contribution to the News and Observer Publishing Company, or upon termination of employment, except that tbe insurance of an employee shall not terminate while be is disabled and entitled to benefits hereunder; or upon tbe discontinuance of tbe group policy.” Tbe'policy says: “Insurance on any employee shall terminate as of the date he ceases to malee the required premium contribution toward the cost of the insurance, leaves the service of the employer, is dismissed therefrom, is pensioned or otherwise discontinues working for said employer." As far as tbe employer, tbe News and Observer Publishing Company, is concerned, tbe evidence is plenary that it recognized tbe substitute rule, and under its terms considered plaintiff its employee. Further, plaintiff has never left tbe service of tbe employer or been dismissed, pensioned or otherwise discontinued working for said employer. It may be that this alone, under a liberal construction of tbe policy, is'decisive under tbe language of tbe policy, but we do not so decide. Poole v. Insurance Co., 188 N. C., at p. 469; McCain v. Insurance Co., 190 N. C., at p. 551. There.is evidence on tbe part of plaintiff that defendant, through its agent or agents knew of and recognized this substitute rule and issued tbe “group insurance” and took tbe premium from defendant with full knowledge, and after issuing tbe policy knew of tbe substitute rule, received tbe premiums on tbe policy and by its acts, conduct, transactions or declarations treated tbe policy as still in force. In Grabbs v. Insurance Co., 125 N. C., at p. 396, it is stated: “We think the rule is well settled that where an insurance company, life or fire, issues a policy with full knowledge of existing facts which by its terms would work a forfeiture of the policy, the insurer must be held *583 to bare waived all such, conditions, at least to the extent of its knowledge, actual or constructive. It cannot be permitted to knowingly issue a worthless policy upon a valuable consideration. An implied waiver is in the nature of an estoppel in pais, which might well be enforced by any court of equity, under such circumstances.” Gerringer v. Ins. Co., 133 N. C., 407. In Bullard v. Ins. Co., 189 N. C., at p. 37, we find: “The ‘iron-safe clause’ in policies of insurance is generally upheld by the courts as a ■reasonable contract limitation upon the insurer’s risk (Coggins v. Ins. Co., 144 N. C., 7); but if the company, .knowing the insured has not complied with this provision, collects the premiums and recognizes the validity and binding force and effect of the policy it has issued, it should not be heard to insist upon the introduction of records, the keeping of which it has thus tacitly waived. There- is a distinction between waiver and estoppel; but the waiver of a forfeiture, though in the nature of an estoppel, may be created by acts, conduct, or declarations insufficient to create a technical estoppel. . . (p. 38) Conditions which form a part of the contract of insurance at its inception may be waived by the agent of the insurer, although they are embraced’ in the policy when it is delivered; and the- local agent’s knowledge of such conditions is deemed to be the knowledge of his principal.” The principle is-thus stated in Midkiff v. Ins. Co., 197 N. C., at p. 143: “In the instant case, there was evidence tending to show that the local agents of the defendant company, at the time they countersigned and issued to the plaintiffs the policy of insurance, insuring their stock of merchandise, knew that plaintiffs had and kept dynamite and dynamite caps on 'the described premises, as part of said stock of merchandise, and that with this knowledge they issued the policy. There was no evidence tending to show that the dynamite and dynamite caps on said premises, kept by plaintiffs as part of said stock of merchandise, at the date of the fire, had been added to said stock of merchandise since the issuance of the policy. The knowledge of the local agents, in this instance, was the knowledge of' the defendant. It must be held, therefore, that defendant having issued the policy, with knowledge of the ■presence of the dynamite and dynamite caps on the premises described in the policy, waived this condition, and is estopped to rely upon the presence of the dynamite and dynamite caps, on said premises, at the date of the fire, as releasing the defendant from liability under the policy.” In Houch v. Ins. Co., ante, at p. 305, it is written: “There was evidence tending to show that at the date of the issuance of the policy, defendant’s agent was informed by the plaintiff, N. F. Houck, that he and M. Y. Houck owned only an estate in the land for his life, and that *584 bis children owned the remainder in fee. This knowledge is imputed to the defendant. This evidence was sufficient to show a waiver by defendant of the provisions of the policy on which it relies,” citing authorities. Clapp v. Ins. Co., 126 N. C., 388; Strause v. Ins. Co., 128 N. C., 64; Gerringer v. Ins. Co., supra; Cockfield v. Fireman’s Ins. Co., 144 S. E., 71, 146 S. C., 351. The eases above cited from the decisions of this Court are fully sustained by Mr. Cooley in his brief on Insurance, 2 ed., Vol. 5, p. 4204, et seq. Mr. Cooley further, at p. 4272, says: “If, therefore, an insurance company, with knowledge of facts vitiating a policy, enters into negotiations or transactions with the insured, by which the company recognizes or treats the policy as still in force, or by its acts, declarations, or dealings leads the insured to regard himself as protected by the policy, or induces him to incur trouble or expense, such acts, transactions, or declarations will operate as a waiver of the forfeiture, and estop the company from relying thereon as a defense to an action on the policy.” And at p. 4290: “The weight of authority supports the proposition that an insurance company waives or is estopped to assert a violation of the terms of an insurance contract if the company, on being notified of the violation, remains silent and fails to object or to declare a forfeiture, or cancel or rescind the contract, within a reasonable time. This rule is no doubt in most eases based on the theory that it is a breach of good faith on the part of an insurance company to remain silent and inactive on notice of a breach, and to retain the unearned premiums, and so lead the insured to believe that his insurance contract is regarded as valid notwithstanding the breach.” Collins v. Farmville Ins. & Banking Co., 79 N. C., 279. See Mutual Protective League v. Walker (Ky.), 173 S. W. Rep., 804; Citizens Nat. Life Ins. Co. v. Egner (Ky.), 180 S. W. Rep., 778. It is the settled rule of practice in this jurisdiction that, on a motion to nonsuit, the evidence which makes for the plaintiff’s claim and which' tends to support his cause of action, whether offered by the plaintiff or elicited from the defendant’s witnesses, is to be taken and considered in its most favorable light for the plaintiff, and he is entitled to the benefit of every reasonable intendment upon the evidence and every reasonable inference to be drawn therefrom. We think the evidence of plaintiff was sufficient and should have been submitted to the jury. Eeversed.