Pippen v. Mutual Benefit Life Insurance

This is an action brought by the administrator of Joseph H. Pippen to recover the sum of $1,000, alleged to be due upon the death of said Joseph by reason of a certain life insurance policy issued by defendant company to said Joseph. It appears from the facts agreed that Joseph was an infant when he applied for and obtained the policy, and died during his infancy. The application was made on 4 February, 1897, and the policy was issued to him on the 10th of said month.

It was agreed in its policy by the defendant company that, in consideration of $40.54 to it in hand paid and of the annual premium of $40.54 to be paid on 10 February in every year until twenty full years' premiums shall have been paid, it would, on 10 February, 1917, pay to the assured $1,000, or should he die before that time, then, upon his death and proof thereof, to pay said amount to his executors, administrators and assigns. After the issuance of the policy, and while the same was in force, plaintiff's intestate, pursuant to a provision contained in said policy, in consideration of the sum of $54.40 (the then cash value of said policy) paid to him by the company, fully surrendered and delivered the said policy to the defendant company, and thereafter, to wit, on 17 February, 1899, died.

The good faith and fairness of these transactions with the infant (intestate) is not questioned; and it is expressly stated in the case agreed that "the said surrender was voluntarily made and executed in writing by the said intestate bona fide and without compulsion or undue influence on the part of the defendant."

The main contention of the plaintiff is that the surrender of (25) the policy by his infant intestate was a voidable contract, which he, in this action, seeks to avoid, and sues to recover upon the original contract of insurance, which he endeavors to affirm. His Honor, upon the facts agreed, rendered judgment in favor of the defendant, and plaintiff appealed.

We sustain his Honor, and hold that the plaintiff is not entitled to recover.

The contract of insurance made with the infant, plaintiff's intestate, was not for necessaries, and was therefore, voidable at his election, but binding upon the defendant company. It was an executory contract (Lovell v.Insurance Co., 111 U.S. 264), relating to personalty (Conigland v. Smith,79 N.C. 303; Simmons v. Biggs, 99 N.C. 236; Hooker v. Sugg, 102 N.C. 115), 3 L.R.A., 217; 11 Am. St., 717, and could, therefore, be avoided by him during his infancy. S. v. Howard, 88 N.C. 650, on page 652; Clark on Contracts, page 244. His disaffirmance could have been made either by refusing to perform his part of the contract, and then pleading his disability in a suit for its enforcement, or by a voluntary annulment or cancellation made by agreement with the company. And it appears that he adopted the latter course by a voluntary surrender of the policy and receiving its cash value.

But it was argued by the learned counsel for plaintiff that the intestate did not receive the full amount to which he was entitled by reason of the terms expressed in a "note" or condition appearing on the policy. Be that as it may, the disaffirmance of the contract by voluntarily surrendering it rendered the contract void ab initio, and the intestate then became entitled to be restored to his original status, which is not the subject of this controversy.

It is further insisted by plaintiff that the surrender or delivering up of the policy, in consideration of the sum paid to him by the (26) company, was a sale of the policy made by his intestate to the company, and in this action he, having affirmed the contract of insurance, disaffirms the sale, and is therefore entitled to recover upon the policy, although it had been delivered to the company. This contention can not be sustained, because the property, or interest, so vesting in the intestate was a contingency liable to be defeated and incapable of delivery, actual or constructive, and therefore not the subject of sale; or, should it be considered an assignment, the instant the interest of the intestate passed out of him into the company, eo instanti the obligations therein imposed ceased and the contract rescinded.

In Edgerton v. Wolf, 6 Gray, 453, the defendant, an infant, purchased a horse, which was delivered to him, with the right to return the horse if he could not get the money to pay for him, and, after failing to get the money, returned the horse to the vendor plaintiff; but afterwards took the horse from plaintiff's possession and sold him. The Court there held that the sale made to the infant was voidable at his election, and his returning the horse voluntarily, intending to give up all his interest in the property, was an avoidance of the contract, and all the rights of the vendor revested in him, and the infant defendant ceased to have any right over the property, and could not retake the same against the will of the vendor plaintiff.

So, it appearing that the surrender of the policy was a disaffirmance of the original contract of insurance, rendering the same absolutely voidab initio (Clark on Contracts, page 258), a "disaffirmance can not be retracted. Ratification of a contract, after it has once been disaffirmed, comes too late. . . . When the infant has exercised the privilege to rescind his contract, he can not afterwards abandon or repudiate the rescission and take the other alternative." "The contract (27) having been made void, can not be revived, except by mutual consent," says the Court in McCarty v. Iron Co., 92 Ala. 463; 12 L.R.A., 136.

There is no error, and the judgment of the court below must be

Affirmed.