(after stating the facts). At common law the husband and wife, being deemed one person, were incapable of contracting with each other, and it was necessary to convey to a third person, as a conduit, in order to pass the title to property from one to the other. The rule was different in equity, where assignments or conveyances were held to raise a trust in favor of the assignee or grantee. Now, however, the wife is allowed to acquire title to property conveyed to her by the husband
or any other person, the conveyances being liable, like other deeds or instruments that pass title, to impeachment for fraud upon sufficient grounds. Walker v. Long 109 N.C. 510; Osborne v. Wilkes, 108 N.C. 651;Woodruff v. Bowles, 104 N.C. 197; Battle v. Mayo, 102 N.C. 413;Brown v. Mitchell, ib., 347; George v. High, 85 N.C. 99. The statute (Code, sec. 1836) declares all contracts between husband and wife, subject to restrictions contained in the preceding section, (1835), valid, unless contrary to public policy. The last named section provides that no contract between them made during coverture shall be valid to affect or change any part of the real estate of the wife or the accruing income thereof for a longer time than three years next ensuing the making of such contract or to impair or change the body or capital of the personal estate of the wife or accruing income thereof for a longer time than three years next ensuing the making of such contract, unless (486) such contract shall be in writing as required for conveyances of land, etc." The section further provides that, in order to render such contract valid, the officer taking the private examination of the wife, as prescribed, must certify, among other things, that "it is not unreasonable or injurious to her." If a policy of insurance for her benefit constituted a part of the body of her personal estate the endorsement thereon was ineffectual to pass her interest to the husband and make him the beneficiary in her stead, as was at first contemplated. It was held in Hooker v. Sugg, 102 N.C. 115, that where the husband takes out a policy on his life for the benefit of the wife her interest vests in her immediately upon its execution. If the plaintiff attempted to comply with his contract by transmitting the beneficiary interest in the policy indirectly through the wife of the husband by assignment, instead of directly by the terms of policy itself, it was incumbent on him to see that her interest passed. If the word "body" in the statute is not meaningless, it must have been intended to include a vested interest from which no present income is derived, though it has a present value dependent upon facts which need be enumerated. The body of one's personal estate manifestly does not include the income derived from it, but does include every such vested interest as a policy of insurance.
The wife, certainly with the assent of her husband, is empowered by law to assign her interest as a beneficiary in a life or fire insurance policy to a third person and where both join her interest passes, unless it is a violation of some enforceable stipulation in the contract of insurance to attempt to transfer the interest in that way. Here, if instead of the notice sent out by the company, it had assented to the (487) validity of the transfer, such assent would have operated as an estoppel on it to deny the right of the husband to recover in case
of the wife's death. Blackburn v. Insurance Co., 116 N.C. 821. But it would still have remained to determine whether in case of the wife's death the policy, without a further transfer such as was contemplated by the statute, would not belong to the wife's estate instead of to the husband as beneficiary. Pretermitting the question upon which the judge below probably passed, viz, whether there was not a failure of consideration, unless the plaintiff complied with the original agreement by delivering the policies applied for, it is manifest that he failed to attain the same end by the indirect method of assignment. Upon his refusal to remedy the defect either by furnishing a policy in which the husband should be named as beneficiary, or making the transfer effectual in law to pass the beneficiary interest out of the wife, the husband was at liberty to renounce the entire contract. The defendant made application for the policies and agreed that, as a consideration for them, he would execute his promissory note. Upon the failure of the agent of the company to deliver the policies applied for, the defendant refused to execute his note and accept those tendered. Upon the agreement on the part of the plaintiff, which must be interpreted as meaning that the assignment should receive the assent of the company, so as at least to work an estoppel on it to deny its validity, the defendant was induced to execute the note. Where the promises of the parties to an executory contract are not independent but conditional, the one upon the other, the failure of one to perform his agreement in whole or in part operates as a discharge of the other party from promises conditioned upon such performance. Clark on contracts, p. 651. In order to deprive the defendant of the right to insist upon a discharge from his promise, the intention to make the mutual agreements independent and (488) unconditional must be clear. Clark, supra, p. 653.
The mutual stipulations of the plaintiff as agent and the defendant company were dependent the one upon the other, and as between them the failure to furnish a policy on the life of the wife, of which the husband should be the beneficiary, operated to relive him from the payment of a promissory note given as a consideration for such a policy. The two policies were of such a nature that the consideration was not divisible. It was given to provide for each in case of surviving the other. Clark, supra, pages 651 to 653; 2 Parson's Cont. (8th Ed.), bottom page 645 and note. If the defendant had paid the money instead of giving his note he could, on the failure or refusal to comply with the mutual and dependent promises, have recovered back. 1 Wharton, supra, sec. 520. For a like reason he could avoid the payment when sued by the payee on a promissory note given in lieu of the money. The defendant made application for two policies.
The insurance company distinctly and unequivocally refused to recognize the validity of the assignment, and while it recognized the agency of the plaintiff Sydnor to take the defendant's note or collect the premium paid as a consideration for a certain policy, it attempts to repudiate the promises he made as an inducement in procuring the execution of the note which was given in lieu of the money and constituted the consideration. It has been distinctly held by this Court that, where the insured is induced to pay money by a representation made by a local agent of the insurer, the latter will be estopped, after receiving the money so procured and placing it in its coffers, from denying the authority of the agent to make the representation which induced its payment. Bergerow v. Ins. Co., 111 N.C. 45; Follette v. Ins. (489) Co., 110 N.C. 377.
There was error in the instruction that the plaintiff complied with his contract, and a new trial is granted to the defendant.
NEW TRIAL.
Cited: Lamb v. McPhail, 126 N.C. 221; Rea v. Rea, 156 N.C. 532.