Thomas-Yelverton Co. v. State Capital Life Ins. Co.

77 S.E.2d 692 (1953)

238 N.C. 278

THOMAS-YELVERTON CO., Inc. v. STATE CAPITAL LIFE INS. CO.

No. 97.

Supreme Court of North Carolina.

September 30, 1953.

*693 Gardner, Connor & Lee, Wilson, for appellant.

*694 Carr & Gibbons, Wilson, and Allen & Hipp, Raleigh, for appellee.

DENNY, Justice.

The sole question presented for decision on this appeal is whether or not the court below committed error in sustaining the defendant's motion for judgment as of nonsuit.

Ordinarily in an action to recover on a life insurance policy, where the execution and delivery of the policy and the subsequent death of the insured are proven or admitted, and the premiums have been paid, the burden of establishing an affirmative defense rests upon the insurer. Strigas v. Durham Life Insurance Co., 236 N. C. 734, 73 S.E.2d 788; Tolbert v. Mutual Benefit Life Insurance Co., 236 N.C. 416, 72 S.E.2d 915; MacClure v. Accident & Casualty Ins. Co., 229 N.C. 305, 49 S.E.2d 742; Pearson v. Pearson, 227 N.C. 31, 40 S.E.2d 477; Collins v. United States Casualty Co., 172 N.C. 543, 90 S.E. 585; Page v. Life Insurance Co. of Virginia, 131 N. C. 115, 42 S.E. 543.

The provisions of G.S. § 58-197 read as follows: "A person who solicits an application for insurance upon the life of another, in any controversy relating thereto between the insured or his beneficiary and the company issuing a policy upon such application, is the agent of the company and not of the insured."

The plaintiff is relying on the above statute and Fishblate v. Fidelity & Casualty Co., 140 N.C. 589, 53 S.E. 354; National Life Insurance Co. v. Grady, 185 N.C. 348, 117 S.E. 289; Short v. La Fayette Life Insurance Co., 194 N.C. 649, 140 S.E. 302; Laughinghouse v. Great National Insurance Co., 200 N.C. 434, 157 S.E. 131; Colson v. State Mutual Life Assurance Co., 207 N.C. 581, 178 S.E. 211; Cox v. Equitable Life Assurance Society, 209 N.C. 778, 185 S.E. 12; Heilig v. Home Security Life Insurance Co., 222 N.C. 231, 22 S.E.2d 429, and similar cases, to sustain its contention that knowledge of its agent constitutes knowledge of the defendant and that the defendant is estopped from denying the validity of the policy, now held by it as assignee.

The rule with respect to the knowledge of an agent being imputable to his principal is well stated in the case of National Life Insurance Co. v. Grady, supra [185 N.C. 348, 117 S.E. 291], in the following language: "In the absence of fraud or collusion between the insured and the agent, the knowledge of the agent when acting within the scope of the powers intrusted to him will be imputed to the company, though a direct stipulation to the contrary appears in the policy or the application for the same." However, it is otherwise when it clearly appears that an insurance agent and the insured participated in a fraud by inserting false answers with respect to material facts in an application for insurance. The knowledge of the agent in such instances will not be imputable to his principal. Sprinkle v. Knights Templar & Masons' Life Indemnity Co., 124 N.C. 405, 32 S.E. 734; Gardner v. North State Mutual Life Insurance Co., 163 N.C. 367, 79 S.E. 806, 48 L.R.A.,N.S., 714; Inman v. Sovereign Camp, Woodmen of the World, 211 N.C. 179, 189 S.E. 496.

In the case of Hedgecock v. Jefferson Standard Life Insurance Co., 212 N.C. 638, 194 S.E. 86, 88, this Court, speaking through Barnhill, J., said: "When the plaintiff offers evidence sufficient to constitute a prima facie case in an action in which the defendant has set up an affirmative defense, and the evidence of the plaintiff establishes the truth of the affirmative defense as a matter of law, a judgment of nonsuit may be entered."

In Butler v. New York Life Insurance Co., 213 N.C. 384, 196 S.E. 317, the defendant plead a violation of the conditions attached to the delivery of the policy, and, in addition, that it was secured by fraudulent misrepresentations and concealments. At the trial it was admitted that the plaintiff could not refute testimony concerning consultations by the applicant and her treatment by a physician within the period which *695 was material to the issue in controversy. Whereupon, the court dismissed the action as in case of nonsuit. In sustaining the dismissal, Stacy, C. J., speaking for the Court, said: "We think it is clear that plaintiff is in no position to insist upon a recovery. Undoubtedly there was a suppression of a material fact, * * * which would have resulted in nondelivery of the policy, but for such suppression. * * * A suppressio veri by one whose duty it is to speak is equivalent to a suggestio falsi. Isler v. Brown, 196 N.C. 685, 146 S.E. 803; 10 R.C.L. 324."

Unquestionably the defendant would not have issued a policy of insurance on the life of Roney D. Boykin if the application had disclosed the true facts with respect to his health. It is settled in this jurisdiction that a misrepresentation of a material fact, or the suppression thereof, in an application for insurance, will avoid the policy "even though the assured be innocent of fraud or an intent to deceive or to wrongfully induce the assurer to act, or whether the statement [be] made in ignorance or good faith, or unintentionally." Equitable Life Assurance Society of United States v. Ashby, 215 N.C. 280, 1 S.E.2d 830, 833; Petty v. Pacific Mutual Life Insurance Co. of California, 212 N.C. 157, 193 S.E. 228; Inman v. Woodmen of the World, supra; Washington Life Insurance Co. v. Box Co., 185 N.C. 543, 117 S.E. 785; Mutual Life Insurance Co. v. Leaksville Woolen Mills, 172 N.C. 534, 90 S.E. 574; Hardy v. Phoenix Mut. Life Insurance Co., 167 N.C. 22, 83 S.E. 5; Gardner v. North State Mutual Life Insurance Co., supra; Alexander v. Metropolitan Life Insurance Co., 150 N.C. 536, 64 S.E. 432; Bryant v. Metropolitan Life Insurance Co., 147 N.C. 181, 60 S.E. 983.

In the instant case, when the insured signed the application he knew the agent had written the answers to the questions contained in it; and by signing it in the form submitted, he represented that the answers were true. The plaintiff's evidence clearly establishes the truth of the affirmative defenses of the defendant. Hence, the ruling of the court below will be upheld. Hedgecock v. Jefferson Standard Life Insurance Co., supra.

Affirmed.

WINBORNE, J., took no part in the consideration or decision of this case.