Gwaltney v. Provident Savings Life Assurance Society ( 1903 )

MONTGOMERY, J., dissenting. This action was brought to recover the premiums, with interest thereon, paid on a life insurance policy issued to the plaintiff by the defendant in 1899, through its general agent in this State. The complaint alleges that said agent, in soliciting the application, agreed to issue to the plaintiff a level rate policy, whereas the one issued increased the premiums with age. The application on its face is for a policy "upon the annual renewal plan, with surplus applied to keeping premiums level, participating premiums payable quarterly," and the policy provides for "payment of the annual renewal premium for the actual age attained, in accordance with schedule printed on next page of this policy for each $1,000, except as reduced by the application of the surplus and guaranty fund," and at the foot of said table in the policy is the following: "Note. — Provided the mortality in this society shall be as favorable in the future as it has been in the past in the largest and best of the other companies (thus far it has been more favorable), this insurance will be extended and renewed during the whole expectation or probable lifetime of the insured at the rate of premium charged for the first year only of the policy."

There were thirteen issues submitted to the jury, which with the responses thereto establish the following state of facts: "That one Jones was the general agent in this State of the defendant at the time the application was made and the policy issued; that as such general agent of the defendant, by false and fraudulent representations, he induced the plaintiff to make the application and take out the policy of insurance upon an agreement, made at and before the delivery of the policy, that the premiums per quarter should be $22.41 for the life of the assured and no more, and thereby induced the plaintiff to accept the policy; that the application was filled out by the (927) defendant's general agent (Jones) and the plaintiff was induced to accept the policy and pay $22.41 per quarter, and was misled and prevented from examining the terms of the policy at the time of delivery and till demand of increase of premium, by reason of false, deceitful, and fraudulent representations of said Jones at and before the delivery of the policy; that the defendant received the premiums from the plaintiff at the rate of $22.41 for nine years, and then demanded an increase of premiums to $28.01 per quarter, which the plaintiff paid, but under protest, for two years, when the amount demanded was raised to $41.73 per quarter, and upon the plaintiff's refusal to pay the same the defendant discontinued the policy and held all the premiums paid to that date; that after the execution and delivery of the policy, the defendant through its general agent agreed to continue the policy upon the payment of $22.41 per quarter during the life of the plaintiff, waiving the provisions in the policy which permitted an increase in the premiums; that the defendant at the time of issuing the policy had notice of the special contract with the plaintiff, made by Jones; that the policy was not issued in accordance with the aforesaid verbal contract with the defendant's general agent; that the increase in rates was contrary to said agreement, though permitted by the terms of the policy, which the plaintiff had retained in his possession from its delivery to him." There were allegations and evidence justifying the above verdict, if the jury believed the evidence.

The defendant objected to the evidence by the plaintiff of the conversations and agreements between him and the defendant's general agent, before or contemporaneous with the delivery of the policy, because such verbal agreements were merged in the written application and (928) policy, and also under The Code, sec. 590, because the said general agent Jones was dead at the time of the trial.

The rule that parol agreements are merged in a written contract has no application when, as here, the allegation is that the written contract was by fraud (or mistake) executed differently from the terms of said agreement. Powell v. Heptinstall, 79 N.C. 207; McLeod v. Bullard,84 N.C. 527; Bank v. McElwee, 104 N.C. 305. The plaintiff's testimony is substantially set out in his complaint, which is summarized in the opinion in this case, 130 N.C. at p. 630. It appeared in the plaintiff's evidence, if believed, that the plaintiff was ignorant of the terms and provisions of life insurance policies, and that the agent put him off his guard by agreeing in advance that the policy should be for level premiums, and hence, the plaintiff relying on said agent's representations, did not scrutinize the policy, but the agent handed it to him on the street when there was no opportunity to examine it, telling him "here is your policy." From which the plaintiff understood it was the policy agreed on. The receipt of the policy under circumstances similar to these, without reading, was held not binding on the assured.Fitchner v. Fidelity Assn., 103 Iowa, citing numerous cases at p. 279; Kister v. Ins. Co., 128 Pa., 553, 5 L.R.A., 646, 15 Am. St., 696; McMaster v. Ins. Co., 183 U.S. 37. A deed under such circumstances can be avoided between the parties. Medlin v. Buford,115 N.C. 260. The premiums were collected on the level of $22.41 per quarter for nine years, and not till the plaintiff was too old to obtain insurance in any other company was the premium raised to $28.01, which he paid for two years under protest (thus reserving his rights), and then suddenly the premium was jumped to $41.73 per quarter, being very nearly double the original rate, which the plaintiff testified, and the jury find, the general agent promised him should not be raised. Such promise was not such an unreasonable one that (929) the plaintiff as an ordinarily prudent man should have refused to rely upon it, for the table annexed to the policy and referred to therein contained the note above set out, that unless there was unforeseen mortality the company expected to maintain the level rate of the first premium in all cases. The plaintiff testified that his policy was taken out on an express agreement that this level rate should be maintained in his case.

The testimony of the agreement and conversations of the plaintiff with the defendant's agent was competent, notwithstanding the death of the agent. Roberts v. R. R., 109 N.C. 670; Sprague v. Bond, 113 N.C. 551.

The plaintiff further testified, and the jury found, that in December, 1890, after the policy was issued, the defendant through its general agent agreed to renew and extend the policy for the term of the plaintiff's life at a level premium of $22.41, and waived the conditions of said policy providing for an increase of the rate of premium for age attained." The authorities are numerous that a general agent can waive any stipulation in the policy notwithstanding a clause in the policy forbidding it, for he can waive that clause as well as any other. A party cannot bind himself not to agree to modifications in a contract, and a corporation acts through its agents in the scope of their agency, and the agency here was a general agency. Wood v. Ins. Co., 149 N.C. 385, 52 Am. St., 733; Ins. Co. v.Gray, 43 Kan. 504; R. R. v. Ins. Co., 105 Mass. 570; 1 May on Ins. (4 Ed.), sec. 151; Rainer v. Ins. Co., 74 Wis. 98; Ins. Co. v. Johnson,4 Kan. App. 10; Ins. Co. v. Wilkinson, 80 U.S. 234; Ins. Co. v. McCain,96 U.S. 84.

The issues submitted arose upon the pleadings, and as every phase of the controversy could be presented thereon, they were not objectionable. Clark's Code (3 Ed.), pp. 474-476; Patterson v. Mills, 121 N.C. 266. What has been already said disposes of the exceptions for (930) refusal of instructions and refusal to nonsuit the plaintiff upon the evidence.

The exceptions to the charge are without merit, but we must further say that they are not properly presented for consideration. Each exception to the charge is required by the statute (The Code, sec. 550) to be "stated separately in articles numbered," and no exception should contain more than one proposition, else it is not "specific" and must be disregarded. Clark's Code (3 Ed.), pp. 513, 514, 773, and numerous cases there cited. It is not a compliance with the statute to divide the charge (as here) into four sections, each containing many propositions and divers paragraphs, and to except seriatim to each of those four subsections of the charge. The object of the statute is to give the appellee information as to the errors, by specific exceptions, so that he may prepare himself to meet them on the argument here.

The policy having been wrongfully canceled, the amount of the recovery is the return of the premiums, with interest on each from the date of payment. Braswell v. Ins. Co., 75 N.C. 8; Lovick v. Life Assn.,110 N.C. 93; Burrus v. Ins. Co., 124 N.C. 9; Hollowell v. Ins. Co.,126 N.C. 398; Strauss v. Life Assn., ibid., 976, 54 L.R.A., 605, 83 Am. St., 699; S. c., 128 N.C. 468.

Affirmed.