Hayworth v. Philadelphia Life Insurance

Vaesee, J. An action was instituted in the Superior Court of Davidson County between the same parties, and on the same policy, and removed to the District Court of the United States, at Greensboro, and *759 there tried. In this first action, $6,000 was demanded on account of tbe double indemnity provision in tbe policy. Plaintiff there recovered, but, upon writ of error in the Circuit Court of Appeals, the judgment in favor of the plaintiff was reversed, and the action remanded for a new trial. Upon examination of the authorities we are convinced that the reasoning contained in the opinion of Circuit Judge Bose is not only clear and satisfactory, but is supported by the prevailing authorities, and that the plaintiff cannot recover. Philadelphia Life Ins. Co. v. Hayworth, 296 Fed., 339. When this action was remanded to the district court at Greensboro, the plaintiff submitted to a voluntary nonsuit and instituted the present action in Rowan Superior Court, claiming only $3,000, not declaring upon the double indemnity provision of the policy. The facts stated in the complaint, as set out above, were the established facts upon which the Circuit Court of Appeals rendered its opinion. We feel that it would be unnecessary to submit further reasons than those given in this opinion. -However, in addition to the authorities cited in that opinion, there are other decisions from this State fully supporting the conclusions therein reached. When a note is given for the payment of the premium in a life insurance policy and the note and the policy contain a stipulation that, upon the failure to pay the note at maturity, the policy shall cease and determine, then a failure so to pay such premium note renders the policy void. Ferebee v. Ins. Co., 68 N. C., 11; Sexton v. Ins. Co., 157 N. C., 142; Sexton v. Ins. Co., 160 N. C., 597; Murphy v. Ins. Co., 167 N. C., 334, 336; Perry v. Ins. Co., 150 N. C., 145; McCraw v. Ins. Co., 78 N. C., 149; Underwood v. Ins. Co., 177 N. C., 327, 334. It is, also, further established in this jurisdiction that, “in the absence of an agreement to the contrary the delivery of a check by the debtor to the creditor, and the acceptance by the creditor of the check, is not payment of the indebtedness until the check has been paid.” Graham v. Warehouse, 189 N. C., 536; Bank v. Barrows, 189 N. C., 303; Wilson v. Jennings, 15 N. C., 90; Spear v. Atkinson, 23 N. C., 262; Mauney v. Coit, 86 N. C., 463; Bank v. Hollingsworth, 135 N. C., 571; Chemical Co. v. McNair, 139 N. C., 334. In Ins. Co. v. Durham County, ante, 58, the Court says: “The checks which were not paid do not constitute payments.” The premium note was not paid. A worthless check is not a payment. There is no fact in the complaint that tends to show that the check was accepted as a payment. It was a conditional payment and when it was not- paid the condition which prevented it from operating as a payment, happened, and the policy lapsed. The failure to have the funds in the bank to meet the check was the *760 fault of tbe drawer, and no loss resulted from any delay on tbe part of tbe payee. When such a provision of forfeiture appears in tbe policy and in tbe premium note there is no room for construction, tbe intent of tbe parties is clear, and tbe courts must enforce these contracts as made. Tbe forfeiture occurred and plaintiff cannot recover. Pitt v. Berkshire Life Ins. Co., 100 Mass., 500; Crofton v. Home Ins. Co., 199 Ky., 517, 251 S. W., 992. "When tbe note contains tbe forfeiting stipulation and tbe policy does not, nonpayment is fatal according to Holly v. Metropolitan Life Ins. Co., 105 N. Y., 437; Besseler v. Fidelity Life Ins. Co., 110 Tenn., 411. See, also, Hale v. Michigan Farmers Mutual Ins. Co., 148 Mich., 453; TJnierwood v. Security life & Annuity Co., 108 Tex., 381. An interesting note on this subject' is in Yale Law Journal, vol. 35, No. 2. December, 1925, 236. We conclude tbe judgment below must be Affirmed.