Burton v. Life & Cas. Ins. Co. of Tennessee

• Decision Date: 19 March 1930
• Docket Number: 471.
• Parties: BURTON v. LIFE & CASUALTY INS. CO. OF TENNESSEE.
• Court: North Carolina Supreme Court

152 S.E. 396

198 N.C. 498

BURTON v. LIFE & CASUALTY INS. CO. OF TENNESSEE.

No. 471.

Supreme Court of North Carolina

March 19, 1930

Appeal from Superior Court, Mecklenburg County; Stack, Judge.

Action by Mark Burton against the Life & Casualty Insurance Company of Tennessee. From the judgment rendered, plaintiff appeals.

No error.

Proof must be clear, cogent, and convincing to warrant reformation of written instrument.

The plaintiff alleged that on or about November, 1924, the defendant, through its agent, sold to him a certain accident insurance policy known as the "Industrial Travel & Pedestrian Policy." That thereafter, as a result of negotiations, the defendant company issued to the plaintiff one accident policy of insurance known as the "Standard Industrial Travel & Pedestrian Policy." Plaintiff alleged that the agent represented to him that this policy provided an indemnity of $500 against loss of either eye from "any cause."

Plaintiff further alleged, as a second cause of action, that in November, 1927, the agent of the defendant again solicited him to purchase an accident policy of insurance, and that thereafter the defendant issued its "Standard Travel & Pedestrian Policy." The plaintiff alleged that the agent represented that the second policy would provide "a benefit to him of $1,250.00 for the loss, by any cause, of either eye, foot, or hand, and certain other benefits for other physical injuries."

Plaintiff further alleged that he was unable to read, and accepted both of said policies, believing that they contained provisions as represented by the agent of defendant. It was alleged that in 1928 "plaintiff lost the sight of his left eye, for all practical purposes, when he was hit in the eye, by a police officer, with a black-jack."

The first policy required the payment of a weekly premium of 5 cents, and provided a benefit of $500 for the loss of either eye "if the insured be struck or knocked down or run over while walking or standing on a public highway by a vehicle, propelled by steam, cable, electricity, naptha gasoline, horse, compressed air, or liquid power--or by the collision of or by any accident to any railroad passenger car or passenger steamship or steamboat, in or on which such insured is traveling as a fare-paying passenger; or, by the collision of or by any accident to any public omnibus, street railway car, taxicab, or automobile stage, or by any accident to any private horse-drawn vehicle, or motor-driven car in which insured is riding or driving; or, if the insured shall by being accidentally thrown from any such vehicle or car suffer any of the specific losses set forth below," etc.

The second policy required an annual premium of $5, and provided a benefit of $1,250 for the loss of either eye, and contained the same coverage clause as the first policy above, and, in addition thereto, contained a clause covering injury to a "telegraph or other messenger boy," etc.

Plaintiff further alleged that, after sustaining the injuries alleged he discovered that the policies which he held were totally different from those represented to him by the agent of the defendant at the time he acquired the insurance, and that the representations so made were false and fraudulent, intended to deceive, were reasonably relied upon, and did deceive the plaintiff; whereupon plaintiff prayed judgment for the sum of $1,750, same being the indemnity provided in both policies.

The defendant denied that any false representations were made, and asserted that the plaintiff received the identical policies applied for, and that the agent had no authority to contract for a policy of insurance other than that authorized by the defendant.

The evidence disclosed that the plaintiff had paid in premiums on both policies the sum of $20.40.

The issues and answers thereto were as follows:

1. "Did the defendant, through its agent, represent to the plaintiff that it could and would issue to the plaintiff insurance policies containing the provisions set forth in the complaint, to-wit, a benefit of $500.00 for the loss of an eye, by any cause, and a benefit of $1,250.00 for the loss of an eye by any cause?" Answer: "Yes."

2. "If so, were such representations false and made for the purpose of deceiving the plaintiff?" Answer: "Yes."

3. "If so, were such representations relied upon by the plaintiff?" Answer: ""Yes."

4. "If so, was the plaintiff induced thereby to enter into said contracts of insurance?" Answer: "Yes."

5. "What amount is the plaintiff entitled to recover of the defendant?" Answer: "$20.40 with interest."

The court instructed the jury to answer the fifth issue $20.40 with interest.

G. T. Carswell and Joe W. Ervin, both of Charlotte, for appellant.

Hamilton C. Jones, of Charlotte, for appellee.

BROGDEN J.

1. Can an illiterate insured, receiving certain written policies of insurance not covering his injury, recover benefits falsely and fraudulently represented to be contained in the policies, without reforming the contracts?

2. Can such contracts be reformed by a mere showing of fraud and without any allegation or issue warranting reformation and without a prayer for such relief?

Justice Hoke, delivering the opinion in Floars v. Insurance Co., 144 N.C. 232, 56 S.E. 915, 916, wrote: "It is also accepted doctrine that when the parties have bargained together touching a contract of insurance and reached an agreement, and in carrying out, or in the effort to carry out, the agreement, a formal written policy is delivered and accepted, the written policy, while it remains unaltered will constitute the contract between the parties, and all prior parol agreements will be merged in the written instrument; nor will evidence be received of prior parol inducements and assurances to contradict or vary the written policy while it so stands as embodying the contract between the parties. Like other written contracts, it may be set aside or corrected for...