Thomas-Yelverton Co. v. State Capital Life Insurance

Denny, J. 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. Insurance Co., 236 N.C. 734, 73 S.E. 2d 788; Tolbert v. Insurance Co., 236 N.C. 416, 72 S.E. 2d 915; MacClure v. Casualty Co., 229 N.C. 305, 49 S.E. 2d 742; Pearson v. Pearson, 227 N.C. 31, 40 S.E. 2d 477; Collins v. Casualty Co., 172 N.C. 543, 90 S.E. 585; Page v. Insurance Co., 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 Co., 140 N.C. 589, 53 S.E. 354; Insurance Co. v. Grady, 185 N.C. 348, 117 S.E. 289; Short v. Insurance Co., 194 N.C. 649, 140 S.E. 302; Laughinghouse v. Insurance Co., 200 N.C. 434, 157 S.E. 131; Colson v. Assurance Co., 207 N.C. 581, 178 S.E. 211; Cox v. Assurance Society, 209 N.C. 778, 185 S.E. 12; Heilig v. Insurance Co., 222 N.C. 231, 22 S.E. 2d 429, and similar eases, 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 t<r his principal is well stated in the case of Insurance Co. v. Grady, supra, in the following language: “In the absence of fraud or collusion between *282 the insured and the agent, the knowledge of the agent when acting within the scope of the powers entrusted 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. Indemnity Co., 124 N.C. 405, 32 S.E. 734; Gardner v. Insurance Co., 163 N.C. 367, 79 S.E. 806; Inman v. Woodmen of the World, 211 N.C. 179, 189 S.E. 496. In the case of Hedgecock v. Insurance Co., 212 N.C. 638, 194 S.E. 86, 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. 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 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 the 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 intention to deceive or to wrongfully induce the assurer to act, or whether the statement be made in ignorance or good faith, or unintentionally.” Assurance Society v. Ashby, 215 N.C. 280, 1 S.E. 2d 830; Petty v. Insurance Co., 212 N.C. 157, 193 S.E. 228; Inman v. Woodmen of the World, supra; Insurance Co. v. Box Co., 185 N.C. 543, 117 S.E. 785; Insurance Co. v. Woolen Mills, 172 N.C. 534, 90 S.E. 574; Hardy v. Insurance Co., 167 N.C. 22, 83 S.E. 5; Gardner *283 v. Insurance Co., supra; Alexander v. Insurance Co., 150 N.C. 536, 64 S.E. 432; Bryant v. Insurance Co., 147 N.C. 181, 60 S.E. 983. In the instant ease, 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. Insurance Co., supra. Affirmed. WiNBORNE, J., took no part in the consideration or decision of this case.