Action on Note — Contract — Consideration — Payment of Premium on Life Insurance Policy.
1. A father gave a note for the first premium on a life insurance policy, taken out by his son, in consideration that the policy should be made payable to him and his heirs. The policy, when issued, was made payable to him, and after his death to the son, and he made no objection until after the maturity of the note: Held, that the failure of the maker of the note to give notice of his objection to the form of the policy within a reasonable time after acquiring knowledge of its precise terms was a waiver of his right to object to it.
2. The benefit of the policy for the year, with the privilege of continuing it in force for the lifetime of the father, constituted a partial consideration for the note given by him.
3. The fact that the note was given to an individual instead of to the company which issued the policy is immaterial.
MACRAE, J., did not sit on the hearing of this case.
AVERY, J.
The benefit of the policy for the year, with the privilege of continuing it in force for the defendant's lifetime, constituted a partial consideration for the note. The acceptance of this benefit until the maturity of the note, with full notice of the modification of the original agreement, was a waiver of objection to the policy in the form in which it was issued. To lend our sanction to the contention of the defendant would give him all of the advantage of a beneficiary under the policy held by the assured for him, even though his purpose may have been, by apparent acquiescence, to place himself in a position to recover in case of the death of the assured, while he entertained the purpose during the interval to repudiate the contract in case his son should survive the maturity of the note. If defendant's conduct did not estop him, it was at least a waiver of the right to object when he failed to give notice of such objection within a reasonable time after acquiring knowledge of the precise terms of the policy delivered to the assured. That the note was given to the agent as an individual, instead of to the company, does not affect the principle. If the plaintiff's money paid for the benefit that he silently accepted, it was not less a fraud to repudiate it than one payable to the insurer. The delivery to the assured was sufficient, and the failure to object must be construed as an acceptance of its benefits. There was error in the charge given and in the refusal of instruction asked, for which a new trial must be granted.
New trial.
Cited: Annuity Co. v. Costner, 149 N.C. 298.
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