Collins v. United States Casualty Co.

Walker, J., after stating the case: The motion for a nonsuit on the evidence was properly denied. There was evidence in the case upon which the jury could return a verdict for the plaintiff, as the evidence, upon such a motion, must be construed most favorably in behalf of the plaintiff, and if in any reasonable view of it he is entitled to recover, it should be submitted to the jury, and they have found that there was no fraud or misrepresentation on the part of the plaintiff. Brittain v. Westhall, 135 N. C., 492; Shaw v. Public Service Corporation, 168 N. C., 611; Clark v. Whitehurst, 171 N. C., 1. The court told the jury that should they find from the evidence that the loss resulted from sickness or disease which existed before the policy was issued, or which was contracted before that time, their answer to the ninth issue would be “Yes.” This was fully responsive to defendant’s special prayer for an instruction upon the ninth issue, and was really a more preferable form of instruction than the one which was asked to be given. While we have not rejected the form of instruction which appears in the defendant’s prayer, where there is no prejudice from it, we have yet commended the other form as the more desirable one. Merrell v. Dudley, 139 N. C., 57; Sossamon v. Cruse, 133 N. C., 470; Alexander v. Statesville, 165 N. C., 527. The third assignment of error, as to the burden of proof upon the ninth issue, is untenable. The court properly instructed the jury that the burden was upon the defendant, and for this reason: The •policy insured against “loss resulting from sickness or disease,” and the plaintiff made out a prima facie case when he exhibited the policy and proved that he was sick and confined to the hospital and his home by such illness after the insurance was taken out. The clause of the policy withdrawing from its operation what would otherwise be embraced by it is in the nature of an exception, or an exemption of the company, under the specified circumstances, from liability thereon, and *547 if tbe company would avail itself of tbe exemption, it must establish tbe facts wbieb bring tbe case witbin tbe same. “Plaintiff, to establish a prima facie ease, must prove: (1) Tbe existence of tbe contract or policy sued on; (2) tbe death of the insured or tbe happening of tbe event provided for in tbe policy, and tbe giving of notice and proof of death (or other event), as required by tbe policy. On tbe other band, tbe burden is on tbe company to show a violation of conditions avoiding an otherwise valid policy, or exceptions in tbe policy wbieb limit tbe liability of tbe company.” 25 Cyc., 926; Int. Order of Twelve v. Boswell, 48 S. W., 1108; 9 Cyc., 762. Tbe burden was on tbe plaintiff to show a case witbin tbe terms of tbe policy which entitled him to its protection and benefit; but be did this by tbe proof that he became ill after the policy was issued, and went to the hospital for an operation, and there is evidence that while be was there tbe second premium due on the policy was paid by him and received by tbe defendant. Tbe policy is broadly worded, covering all cases of sickness, and if there was any special kind of illness which was excepted from the general words, tbe defendant should have shown it. There was proof that tbe defendant’s agent knew that plaintiff bad been ill some time prior to tbe date of tbe policy, as it appears, by construing tbe evidence most favorably for plaintiff as against a motion to nonsuit, that tbe plaintiff stated frankly and fully to tbe agent, at tbe time of tbe application for tbe insurance, in answer to questions propounded to him, every fact in regard to previous illness, giving all tbe information in connection therewith. If tbe agent, by inadvertence or otherwise, failed to insert tbe answers in tbe application as they were given to him, it was not tbe fault of tbe plaintiff, but of the defendant’s agent who represented it in tbe transaction. If it be said that tbe plaintiff was negligent in not reading tbe application before he signed it, tbe answer is that there is, at least, some evidence to tbe effect that plaintiff was induced not to do so by what tbe agent said to him, and upon a motion to nonsuit we must take this evidence to be true; and, in this view, it is not necessary to decide tbe interesting question whether, 'if plaintiff bad not thus been misled by. the agent, which excused him from reading tbe policy, his omission to read could be imputed to him as negligence which would exonerate the company or whether knowledge of tbe agent acquired even in this way would still be charged to tbe company. Tbe authorities are not at one in regard to this proposition. Some cases bold that where tbe applicant is not, by tbe conduct of tbe agent, excused from reading tbe policy, but is negligent in not doing so, tbe company is not liable. Ryan v. W. M. L. Ins. Co., 41 Conn., 168 (19 Am. Rep., 490); N. Y., Life Ins. *548 Co. v. Fletcher, 117 U. S., 519. Other authorities hold the contrary. 25 Cyc., 803 (d), 804, 805. It is there said: “Misstatements by way of representation or warranty which are made through the fraud of the company’s agent cannot be relied on by it to defeat the policy; and especially is this so where the insured is misled by the agent into making the false statements. But the insured must act in good faith, and if by collusion between him and the agent false statements are made for the purpose of securing the insurance, he cannot recover, notwithstanding the agent’s participation in the fraud. An insurance company cannot dispute the truthfulness of false statements written in the application for insurance by its agent without fraud or collusion on the part of the applicant, where the applicant made truthful answers to the agent, even though such statements are expressly made warranties on the basis of which the policy is issued. The theory on which the falsity of answers written in the application by the agent is charged to the company, and not to the insured, is that the agent represents the company in filling out or assisting to fill out the application, and this has been held to be so in some jurisdictions, notwithstanding any stipulation in the application that the agent in taking the application is to be considered the agent of the applicant.” Numerous cases are cited in the note to sustain the text. Otte v. Hartford L. Ins. Co., 88 Minn., 423; McArthur v. H. L. Assn., 73 Iowa, 336; Foster v. Mut. Ins. Assn., 37 Wash., 288; Mass. L. Ins. Co. v. Esleman, 30 Ohio St., 647; Keystone Mut. Ben. Assn. v. Jones, 72 Md., 363; Marer v. Fed. Mut. L. Assn., 78 Fed., 566 (24 C. C. A.; 239); Hook v. M. M. L. Ins. Co., 90 N. Y. Suppl., 56; C. M. I. L. Assn. v. Parham, 80 Texas, 518; Ins. Co., v. Wilkinson, 13 Wall. (80 U. S.), 222; Ins. Co. v. Malone, 21 Wall. (88 U. S.), 152. See, also, as bearing upon the same question, Follette v. Accident Assn., 110 N. C., 377; Sprinkle v. Indemnity Co., 124 N. C., 405; Gwaltney v. Assur. Society, 132 N. C., 925; Fishblate v. Fidelity Co., 140 N. C., 589. But we need not decide this question, as we have held that there was' proof - of circumstances in this case which exempted the plaintiff from the operation of the principle, as stated and applied in Ryan v. Ins. Co., supra, and Ins. Co. v. Fletcher, supra. The conversation plaintiff had with the agent, as detailed by him, was calculated to throw him off his guard and to justify his placing trust and confidence in the agent’s proper discharge of his, plain duty, which he owed to him and the company, to write the answers correctly in the application. This prevented the plaintiff from reading the policy, which would have disclosed the errors to him; but the company, in such a case, must be bound by the acts of its agent within the principle stated in Griffin v. *549 Lumber Co., 140 N. C., 514, and Keystone Mut. Ben. Assn. v. Jones, 72 Md., 363. As against a nonsuit, as we have already said, we must assume the truth of plaintiff’s testimony as to wbat passed between Mm and the agent, and that the jury would have found that plaintiff was misled thereby and was not guilty of any negligence when he trusted the agent, and believed that he had written the answers as they had been given to him. This phase of the case does not seem to be discussed in the defendant’s brief, but is embraced, perhaps, by the motion to-nonsuit, and we have, therefore, referred to it. We have construed any doubtful meaning of the policy in favor of plaintiff, according to the settled rule. Bray v. Ins. Co., 139 N. C., 390. The refusal to set aside the verdict because it is against the weight of the testimony is not reviewable here. We have found no error in any of the particulars to which exception was taken. No error.