The question for decision is this: Was the binder or contract of insurance against loss by burglary and robbery, as represented by the letter of 27 December, 1939, superseded by or merged into the formal policy covering robbery only, subsequently delivered, accepted and retained by the assured ? In the light of well recognized principles adopted and applied in decisions of this Court an affirmative answer is dictated.
These principles of law are:
1. In the field of insurance a “binder” or a “binding slip” “is merely a written memorandum of the most important terms of a preliminary contract of insurance intended to give temporary protection pending the investigation of the risk of the insurer, or until the issuance of a formal policy. Ey intendment it is subject to all the conditions in the policy to be issued.” Vance on Insurance, Hornbook Series, 2nd Ed., section 66, page 194, quoted and applied in Gardner v. Ins. Co., 163 N. C., 367, 79 S. E., 806, and Lea v. Ins. Co., 168 N. C., 478, 84 S. E., 813. See also 29 Amer. Jur., 158, Insurance, sec. 143, and 32 C. J., 1099, Insurance, sec. 183.
2. “When the contract of insurance is finally complete, it is customarily embodied in a formal written instrument, termed a ‘policy/ This instrument merges all prior or contemporaneous parol agreements touch*374ing the transaction and upon accepting it the insured is conclusively presumed, in the absence of fraud, to have given his assent to all of its terms.” Vance on Insurance, Hornbook Series, section 68, page 199. Floars v. Ins. Co., 144 N. C., 232, 56 S. E., 915; Clements v. Ins. Co., 155 N. C., 57, 70 S. E., 1076; Wilson v. Ins. Co., 155 N. C., 173, 71 S. E., 79; McNeal v. Ins. Co., 192 N. C., 450, 135 S. E., 300. See also 32 C. J., 1129, Insurance, sec. 233.
In the Floars case, supra, Hoke, J., speaking to the subject, declared that “It is also accepted doctrine that when the parties have bargained together touching a contract of insurance, and reached an agreement, and in carrying it out, or in the effort to carry out the agreement, a formal written policy is delivered and accepted, the written policy while it remains unaltered will constitute the contract between parties, and all prior oral agreements will be merged in the written instrument . . .” And, continuing by quoting from Yance on Insurance, he says: “The rule that all prior agreements are merged in a subsequent written contract touching the same subject matter is now too well established to need support of cited authority. Therefore, when a policy of insurance, properly executed, is offered by the insurer and accepted by the insured as the evidence of their contract, it must be conclusively presumed to contain all the terms of the agreement for insurance by which the parties intend to be bound. If any previous agreement of the parties shall be omitted from the policy, or any term not theretofore considered added to it, the parties are necessarily presumed to have adopted the contract as the final form of their binding agreement.”
3. It is the duty of the applicant tó communicate acceptance or rejection of the policy. In Couch’s Enc. of Insurance Law, Vol. 1, page 172, sec. 94, the author states that: “There is apparently some conflict of authority as to the duty of- an applicant for insurance to discover that the policy delivered to him does not conform to the proposal or agreement, and to notify the company of his rejection or acceptance of the policy as written. The weight of authority seemingly supports the rule that it is incumbent upon an applicant who receives a policy which does not conform,-as to terms, to the agent’s representations, to notify the company of his refusal to accept the policy. And to this end he must examine the policy within a reasonable time after it comes to hand, and promptly, upon discovering obvious departures from the agreement, rescind the transaction and give the company due notice thereof, since, if an applicant receives and retains, without objection, policies made and sent to him, it is regarded as an acceptance.” The decisions of this Court are consonant with the weight of authority as above stated. Floars v. Ins. Co., supra; Graham v. Ins. Co., 176 N. C., 313, 97 S. E., 6; *375 Arndt v. Ins. Co., 176 N. C., 652, 97 S. E., 631. See also Rice v. Ins. Co., 177 N. C., 128, 98 S. E., 283.
4. Reasonable time begins to run wben the applicant receives the policy. Couch’s Enc. of Insurance Law, Vol. 1, sec. 94, page 173.
5. As to what is reasonable time within which to discover that the policy received differs from the one applied for, or agreed upon, these cases indicate periods of retention without objection which have been held unreasonable: Carrigan v. Nichols, 148 Ark., 336, 230 S. W., 9, three months; Goldstone v. Columbia Life and Trust Co., 33 Cal. App., 119, 164 P., 416, four months; Empire State Life Ins. Co. v. Beckwith, 5 Hun (N. Y.), 122, four months; Bostwick v. Ins. Co., 116 Wis., 392, 67 L. R. A., 705, 89 N. W., 538, 92 N. W., 246, four and one-half months. And this Court, while sustaining judgment of nonsuit on another ground in the Floars case, supra, had this to say: “There is also strong authority fo,r the position that on the facts of this case the relief sought would not be open to plaintiff, even if there had been a mutual mistake in the preliminary bargain and with persons with full power to contract, for the reason that plaintiff accepted the policy with the alleged stipulation omitted without having read same, and held it without protest for three months . . .,” and refers to Bostwick v. Ins. Co., supra, as “a well considered case.” This headnote epitomizes the decision of the Supreme Court of Wisconsin in this respect: “If a person contracts with another for an article to be delivered or gives an order therefor, and thereafter a thing is delivered to him ostensibly in compliance with the order or fulfillment of the contract, unless, at the time thereof or within a reasonable time thereafter, he notifies such other that such article will not be accepted as satisfying the contract or order, he will be conclusively presumed to have waived all departures therein from the thing bargained for which are obvious to the senses by ordinary exercise thereof.”
Applying the above principles to the case in hand: It is manifest from the complaint and the agreed facts that at the time the “binder” was given the parties contemplated the subsequent issuance of a policy of insurance covering burglary and robbery on the inside of plaintiff’s premises to the extent of $1,300.
At the outset in the complaint it is alleged that “on the 21st day of December, 1939, plaintiff applied to the said I. J. Dowdy, Jr., agent of the defendant, for a policy of insurance to cover the plaintiff against burglary and robbery on premises of the plaintiff,” and that “on December 27, 1939, the said I. J. Dowdy, Jr., accepted the said application of insurance and entered into a contract of insurance with the plaintiff . . .” The agreed facts indicate that the original application was for robbery insurance for $1,300 on the inside,” and that plaintiff “amplified *376said application ... by applying for a policy of burglary insurance in addition to the policy of robbery insurance above mentioned.” Nevertheless, the letter of 27 December, 1939, which constitutes the binding acceptance of the application, and is the temporary contract, refers to the coverage requested as “$1,300 for burglary and robbery inside your premises . . .” and says “we will need additional information to enable us to issue the policy itself, however, in the meantime, you may be sure you are covered as requested.” This language of the binder, in reference to issuance of policy is in the singular. Thus it is clear that the parties had in mind a single policy of insurance covering both burglary and robbery on the inside of plaintiff’s premises. The policy delivered was ostensibly pursuant to the order therefor. Moreover, the policy as delivered plainly stated that “The assured has no other burglary, robbery or theft insurance, . . .,” and that “the declarations are declared by the assured to be true.”
Therefore, conceding that the policy as delivered, does not cover burglary, as counsel for plaintiff concedes, and that there was a departure from the application in that respect, it was the duty of the plaintiff to examine the policy within a reasonable time after it came to hand, and promptly upon discovering the obvious departures from the agreement, to rescind the transaction and give the company due notice thereof. And having received and retained the policy, without objection, so far as the record shows, for more than five months, and until nearly two-thirds of the life of the insurance had expired, it will be conclusively presumed that plaintiff accepted the policy as written with the obvious departure from the binder or preliminary agreement.
Such being our opinion, the judgment below will be