Clements v. Life Ins. Co. of Virginia

• Decision Date: 26 April 1911
• Citation: 70 S.E. 1076,155 N.C. 57
• Parties: CLEMENTS v. LIFE INS. CO. OF VIRGINIA.
• Court: North Carolina Supreme Court

70 S.E. 1076

155 N.C. 57

CLEMENTS v. LIFE INS. CO. OF VIRGINIA.

Supreme Court of North Carolina

April 26, 1911

Appeal from Superior Court, Durham County; Daniels, Judge.

Action by W. B. Clements against the Life Insurance Company of Virginia. Judgment for plaintiff, and defendant appeals. Dismissal.

In order to overcome a presumption in favor of the correctness of a written instrument as executed, and justify a reformation on the ground of mistake, the party seeking such relief must make out his case by clear, strong, and convincing proof.

Bryant & Brogden, for appellant.

Bramham & Brawley and Manning & Everett, for appellee.

WALKER J.

The plaintiff brought this action to recover the amount of premiums paid by him on two insurance policies, with interest.

He alleged that an agent of the defendant had represented to him that he was selling policies for the defendant, by the terms of which his life would be insured for 10 years; that, if he died before the expiration of the 10 years, the beneficiaries would receive the amount of the policy, but, if he lived to the end of the insurance period, he could withdraw the total amount of premiums paid to the company by him, with 4 per cent. interest. After some solicitation, he consented to take the policies, and they were sent to him. He put them in his trunk without reading them, although he could read, and without making any effort to ascertain whether they conformed to the representation or agreement of the agent. The plaintiff paid the premiums regularly, and continued to do so, even after he had received information sufficient to put him on his guard, and to notify him that no stipulation for the return of the premiums and interest was in the policy which was the fact. There is a provision for the surrender of the policy at the end of the dividend period of 10 years, and the payment to him of the entire cash value--that is, his part of the legal reserve computed according to the tables of mortality, and 4 per cent. interest, together with the dividends, or for a settlement with the company upon the basis of either one of four other options; but none permitting a withdrawal of all premiums paid, and interest.

The plaintiff appears from his own evidence, none having been introduced by the defendant, to be an intelligent man, fully capable of taking care of himself in any negotiation between him and the defendant's agent, who dealt with him, for the purchase of the policies. There is absolutely no evidence tending to show that the agent attempted to take any advantage of him, except in making the false representation or promise, or that he resorted to any trick, devise, or artifice to prevent his reading the policies, or that he misread them to him, or made any false statement about their contents when the policies were delivered. They were left with him at his home by the agent, without a word being said as to their contents. It is true the plaintiff testifies that he was not a good reader, and was not able to make out some words of the policies when he took them from his trunk and attempted to read them afterwards; but he could not say what words they were, and he also stated that he could easily have had them read to him, though he did not ask any one to do so. The defendant, at the close of the evidence, moved to nonsuit the plaintiff. The motion should have been allowed, and the refusal of the court to grant it was error.

The defendant's agent may have made a false promise to the plaintiff; but there is no more than this in the case. There is no element of fraud in the transaction, and no case made out for either a rescission or reformation of the contract. "The rule that all prior parol agreements are merged in a subsequent written contract touching the same subject-matter is now too well established to need the support of cited authority. Therefore, when a policy of insurance, properly executed, is offered by the insurer and accepted by the insured as the evidence of their contract, it must be conclusively presumed to contain all the terms of the agreement for insurance by which the parties intend to be bound. If any previous agreement of the parties shall be omitted from the policy, or any terms not theretofore considered added to it, the parties are necessarily presumed to have adopted the contract as written as the final form of their binding agreement." Vance on Insurance, p. 348.

In Insurance Co. v. Mowry, 96 U.S. 547, 24 L.Ed. 674 the rule is thus strongly expressed by Justice Field "The entire engagement of the parties, with all the conditions upon which its fulfillment could be obtained, must be conclusively presumed to be there stated. If, by inadvertence or mistake, provisions were omitted, the parties could have had recourse, for a correction of the agreement, to a court of equity, which is competent to give all needful relief in such cases. But until thus corrected the policy must be taken as expressing the final understanding of the assured and of the insurance company."

There is always a strong presumption in favor of the correctness of the instrument as written and executed, for it must be assumed that the parties knew what they had agreed, and have chosen fit and proper words to express that agreement in its entirety. In order to overcome this fair presumption the one who alleges that there is a mistake therein, and seeks to reform the contract, is required to make out his case by clear, strong, and convincing...