McCrimmon v. NC MUT. LIFE INS. CO.

317 S.E.2d 709 (1984)

Willis Gordon McCRIMMON
v.
NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY.

No. 8311DC490.

Court of Appeals of North Carolina.

July 17, 1984.

Edward L. Bullard, Jr., Sanford, for plaintiff-appellee and cross-appellant.

Albert L. Willis, Durham, for defendant-appellant.

WEBB, Judge.

G.S. 58-197 provides that a person who solicits a life insurance policy upon the life of another is the agent of the company issuing the policy upon such application. The plaintiff contends that Edward Keller, the agent of the defendant, committed a fraudulent act by getting the plaintiff to sign an application with material misrepresentations and the defendant should bear the burden of Edward Keller's fraud. Our Supreme Court has held in Thomas-Yelverton Co. v. Insurance Co., 238 N.C. 278, 77 S.E.2d 692 (1953) that "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 is not imputed to the principal. See Jones v. Insurance Co., 254 N.C. 407, 119 S.E.2d 215 (1961).

In applying this rule our Supreme Court held in Inman v. Woodmen of the World, 211 N.C. 179, 189 S.E. 496 (1937), that if an application for insurance containing material misrepresentations is filled in by the agent before being signed by the applicant, these are material misrepresentations of the applicant which bar recovery. We believe we are bound by Inman to hold that the plaintiff's action should have been dismissed. All the evidence showed that Mr. Keller filled in the application and the plaintiff signed it. The plaintiff is a high school graduate and can read and write. Under Inman the false statements are imputed to him. See also Cuthbertson v. Insurance Co., 96 N.C. 480, 2 S.E. 258 (1887).

We do not believe Buchanan v. Nationwide Life Ins. Co., 54 N.C.App. 263, 283 S.E.2d 421 (1981), relied on by the plaintiff, governs. This Court based its ruling in that case on what it said were conflicts in the evidence as to whether the insured had seen any doctor or had been treated at any clinic other than what had been disclosed to the insurance company's agent. In this case there is no dispute that the plaintiff signed the affidavit which contained material misrepresentations. Inman requires that the plaintiff's action be dismissed.

Reversed and remanded.

BECTON and EAGLES, JJ., concur.

EAGLES, Judge, concurring:

I concur because I believe that we are bound by Inman v. Woodmen of the World, 211 N.C. 179, 189 S.E. 496 (1937). But for Inman, equity would dictate that, in the absence of collusion between the insured and the selling agent, the insurance company would be estopped and would be bound by the actions of their selling agent.

BECTON, J., joins in this concurring opinion.