Musgrave v. Mutual Savings & Loan Ass'n

Annotate this Case

174 S.E.2d 820 (1970)

Lucille F. MUSGRAVE and Gale M. Lanning, Administratrix of Clyde Wilson Musgrave v. MUTUAL SAVINGS AND LOAN ASSOCIATION.

No. 7022SC272.

Court of Appeals of North Carolina.

June 24, 1970.

*823 Walser, Brinkley, Walser & McGirt by Walter Brinkley, Lexington, for plaintiff appellants.

J. Lee Wilson and Ned A. Beeker, Lexington, for defendant appellee.

GRAHAM, Judge.

Plaintiffs' only assignment of error is to the entry of judgment for defendant notwithstanding the jury verdict for plaintiffs. The judgment was entered 12 January 1970 and undoubtedly represents one of the early instances where the provisions of Rule 50 of the Rules of Civil Procedure (G.S. § 1A-1, effective 1 January 1970) were applied. The provisions of Rule 50 pertinent to the appeal are as follows:

(b) Motion for judgment notwithstanding the verdict. (1) Whenever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the submission of the action to the jury shall be deemed to be subject to a later determination of the legal questions raised by the motion. Not later than 10 days after entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict; or if a verdict was not returned such party, within 10 days after the jury has been discharged, may move for judgment in accordance with his motion for a directed verdict. In either case the motion shall be granted if it appears that the motion for directed verdict could properly have been granted. A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative. If a verdict was returned the judge may allow the judgment to stand or may set aside the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed. * * * *824 * * * * * * (c) Motion for judgment notwithstanding the verdictconditional rulings on grant of motion. (1) If the motion for judgment notwithstanding the verdict, provided for in section (b) of this rule, is granted, the court shall also rule on the motion for new trial, if any, by determining whether it should be granted if the judgment is thereafter vacated or reversed, and shall specify the grounds for granting or denying the motion for the new trial. If the motion for new trial is thus conditionally granted, the order thereon does not affect the finality of the judgment. In case the motion for new trial has been conditionally granted and the judgment is reversed on appeal, the new trial shall proceed unless the appellate division has otherwise ordered. In case the motion for new trial has been conditionally denied, the appellee on appeal may assert error in that denial; and if the judgment is reversed on appeal, subsequent proceedings shall be in accordance with the order of the appellate division. (2) The party whose verdict has been set aside on motion for judgment notwithstanding the verdict may serve a motion for a new trial pursuant to Rule 59 not later than 10 days after entry of the judgment notwithstanding the verdict."

(See also Rule 41 for the procedure to be followed when the trial is by the court without a jury).

The availability of a motion for a judgment notwithstanding the verdict constitutes an innovation in the civil procedure of this State. Formerly, a motion for nonsuit made under the provisions of former G.S. § 1-183 could not be allowed after verdict for insufficiency of the evidence. Jones v. Dixie Fire Insurance Co., 210 N.C. 559, 187 S.E. 769. The granting of a motion for judgment notwithstanding the verdict constitutes an adjudication on the merits of a case. Here, defendant did not move in the alternative for a new trial pursuant to Rule 50(c) (1). Neither have plaintiffs, under the provisions of Rule 50(c) (2), moved for a new trial. Consequently, the issue before this court is: Did the trial court properly direct judgment for defendant notwithstanding the jury verdict on the grounds set out in its judgment; namely, that the evidence was legally insufficient to permit plaintiffs to recover under any claim asserted? If we answer in the affirmative, the judgment of the trial court will stand. If we answer in the negative, the judgment will be reversed and it will be ordered that the verdict be reinstated and that judgment be entered thereon. In either event, there can be no right to a new trial, for, as previously pointed out, neither party has preserved such a right by proper motion.

In determining the sufficiency of the evidence, we are guided by the same principles that prevailed under our former procedure with respect to the sufficiency of evidence to withstand a motion for nonsuit under G.S. § 1-183. See Dumas v. MacLean, 404 F.2d 1062 (1st Cir. 1968). All evidence which supports plaintiffs' claim must be taken as true and considered in the light most favorable to plaintiffs, giving them the benefit of every reasonable inference which may legitimately be drawn therefrom, and with contradictions, conflicts and inconsistencies being resolved in plaintiffs' favor. Bowen v. Gardner, 275 N.C. 363, 168 S.E.2d 47, and cases therein cited.

With these principles in mind we first examine the evidence with respect to whether it is sufficient to support a jury finding under the first issue that defendant, through its agent Mrs. Everhart, actually undertook to obtain a policy of insurance on the life of Mr. Musgrave by taking his application for it. While there is no direct evidence on this issue, there is evidence *825 from which reasonable inferences may be drawn that an application for insurance was obtained from Mr. Musgrave as alleged by plaintiffs. Mrs. Musgrave was present when the loan was closed. She testified that all of the papers signed at that time were white except for one which was colored. Mr. Musgrave was asked his date of birth while Mrs. Everhart filled in the various forms. The uncontradicted evidence is that all forms used by defendant in connection with its loans were white. The insurance application forms were blue. Only the insurance application required that a date of birth be given. Mrs. Everhart stated that after the death of Mr. Musgrave she went immediately to defendant's office to determine whether the insurance papers had been returned. Defendant customarily made insurance available to its customers, and Mr. Musgrave had obtained insurance through defendant's agent, Mrs. Everhart, on six previous occasions to cover loans continuously owed over a period of twenty-five years. It is true that usage and custom cannot take the place of a contract. Edwards v. Cleveland Mill & Power Co., 193 N.C. 780, 138 S.E. 131; 25 C.J.S. Customs & Usages § 20. However, a person's custom or practice of doing a certain thing in a certain way is admissible as evidence that he did the same thing in the same way on a particular occasion in issue. Stansbury, N.C. Evidence 2d, § 95.

It may well be that none of the above factors, if considered separately, would be sufficient to take the case to the jury on the question of defendant's undertaking to procure insurance for Mr. Musgrave. When considered together, however, it is our opinion that they are sufficient to support the jury's finding on this issue.

The remaining question is whether there was sufficient evidence of negligence on the part of defendant to support the jury's finding as to the second issue. Defendant has presented no argument on this question, having relied completely upon its contention that the evidence was insufficient to permit a finding for plaintiffs on the first issue.

The general rule is that an insurance agent acts as agent of the insured in negotiating for a policy, and that he owes a duty to his principal to exercise reasonable skill, care and diligence in effecting the insurance. Elam v. Smithdeal Realty & Insurance Co., 182 N.C. 599, 109 S.E. 632; 43 Am.Jur.2d Insurance, § 174, p. 230; Annot., 29 A.L.R.2d 171 (1953). Although there is some authority to the effect that one who gratuitously undertakes to procure insurance for another is not liable for his omission to do so, the general rule is that the undertaking in itself imposes a duty. 43 Am.Jur.2d, Insurance, § 174, p. 231. "[T]he better considered decisions on the subject are to the effect that while the agent or broker in question was not obligated to assume the duty of procuring the policy, when he did so, the law imposed upon him the duty of performance in the exercise of ordinary care, * * *" Elam v. Realty Co., supra, at p. 602, 109 S.E. at p. 633. "If a broker or agent is unable to procure the insurance he has undertaken to provide, he impliedly undertakesand it is his duty to give timely notice to his customer, the proposed insured, who may then take the necessary steps to secure the insurance elsewhere or otherwise protect himself. [Citations omitted]. When, under these circumstances, the broker fails to give such notice, he renders himself liable for the resulting damage which his client suffered from lack of insurance. 44 C.J.S. Insurance § 172 (1945)." Wiles v. Millinax, 267 N.C. 392, 148 S.E.2d 229.

No insurance was procured for Mr. Musgrave by defendant and he was not given timely notice of this fact. The question of defendant's negligence was therefore properly for the jury.

The judgment entered for defendant notwithstanding the verdict is therefore reversed and it is ordered that the jury verdict *826 be reinstated and that judgment be entered thereon.

Reversed and remanded.

MALLARD, C. J., and MORRIS, J., concur.

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