Johnson v. Pilot Life Ins. Co.
| Decision Date | 28 February 1940 |
| Docket Number | 92. |
| Citation | 7 S.E.2d 475,217 N.C. 139 |
| Parties | JOHNSON v. PILOT LIFE INS. CO. |
| Court | North Carolina Supreme Court |
Dan B. Bryan, Harold D. Cooley, and I. T. Valentine, all of Nashville, for plaintiff, appellant.
Smith Wharton & Hudgins, of Greensboro, Battle & Winslow of Rocky Mount, and O. B. Moss, of Spring Hope, for defendant, appellee.
The appeal of the plaintiff is from a judgment as of nonsuit made at the conclusion of plaintiff's evidence and at the conclusion of all the evidence.
Plaintiff sued on an insurance contract containing provisions for the payment of fixed installments to the insured on proof of total and permanent disability, as defined in the contract and, upon the conditions named, waiving further payment of premiums.
Plaintiff claims that by reason of an accident, presently described, he was disabled within the meaning of the insurance policy and liability thereon had accrued He further complains that while he was physically weak and without mental capacity to make a contract, the defendant, through its representatives and agents, came to see him and fraudulently procured from him a release from liability on the payment to him of the sum of $5,000, which he alleges is an unfair and inadequate consideration. He seeks to have this settlement rescinded and to recover the amount alleged to be due on his insurance down to the institution of this action--$13,500, subject to the credit of $5,000 received in the challenged settlement.
The defendant admits the contract, denies liability upon it pleads the release, and claims that the settlement was fair and unaccompanied by any fraud or undue influence or unfair practice in its procurement. Defendant avers that plaintiff was mentally competent to execute the release and contends that the settlement, as it appeared at the time, was not unfavorable to plaintiff.
Defendant further pleads the bar of the statute of limitations, alleging that the plaintiff's cause of action did not accrue during the three years next preceding the commencement of this action. C.S. § 441.
The plaintiff, seeking to repel the bar of the statute, alleges that he was wanting in mental capacity, in fact was insane, and, therefore, under disability to sue from the time he sustained his injury, which resulted in his disablement under the terms of the policy, until a time well within the period of three years next preceding the institution of the action, and could not be held, therefore, to have discovered, during that period, the fraud perpetrated upon him.
In view of the conclusion we have reached in this case, much of the evidence need not be restated. We think the case boils down to a consideration of the bar of the statute of limitations, and the evidence pro and con upon this point.
From the record, it appears that the plaintiff sustained his injury on May 20, 1929. On that day he was run over and trampled by a mule on his farm. The upper vertebra of his neck was broken and he sustained other injuries which necessitated hospital treatment. He was put in a cast which reached from the base of the skull almost to the lower end of the spinal column, and remained in this condition for a long while.
Nurses at the hospital and certain persons who came in contact with him from that time on testified that he was mentally incapacitated from that time down to the trial of the case, and the evidence had sufficient body and probative force to be submitted to the jury on that point, if there is no legal impediment to its consideration. Against this evidence, and in contradiction thereof, the defendant offered much evidence to the effect that the plaintiff was mentally competent to transact business, not only at the time the release was procured, but for a time outside the three year period, during which, as it contends, his cause of action must have accrued, if he had knowledge of the fraud perpetrated upon him or was put upon inquiry as to it. In support of this contention, the defendant introduced testimony of experts and evidence of many business transactions had between the plaintiff and others during that period which tended to prove him of sound mind.
Also, the defendant introduced records showing that the plaintiff had been committed to the State Hospital as an insane person and guardians appointed for him on the 21st day of March, 1933, and the record of a lunacy proceeding had on the 7th day of November, 1933, in which a jury found the plaintiff to be of sound mind, following which the guardianship ended and he was restored to the management of his own affairs. In this connection, the defendant contends that under the evidence plaintiff's cause of action accrued during this guardianship, and, in support of that, introduced correspondence between the guardians and the Insurance Company relating to the insurance and settlement had with plaintiff. The defendant further contends that the order in the lunacy proceeding in which plaintiff was pronounced sane and restored to the management of his affairs is res judicata on this point in the present case and bars the plaintiff from asserting a condition of insanity contrary to that finding.
To summarize, the defendant insists, (a) that plaintiff is now barred from maintaining this action, since the statute began to run during the guardianship, and that the bar was effective, therefore, long before plaintiff sued, and (b) that the lunacy proceeding definitely established his status as a sane person; and whether or not the statute had begun to run before that, it must have run from that time, which was several days over the three year period. This action was begun November 28, 1936, and the adjudication was November 25, 1933. This would have left the plaintiff only a part of three days in which to piece together the mental picture and make whatever investigation might be necessary before discovery might be said to be complete.
Defendant points out that since plaintiff is endeavoring to repel the statute, because of fraud practiced upon him, he must show affirmatively that such discovery was made, or that the circumstances putting him on inquiry occurred within the three year period, and that upon this the record is silent.
Nothing else appearing, this is true; but all of these conditions may be met by proof of mental incapacity until within the statutory period, unless, as a matter of law, the plaintiff is precluded from the benefit of such evidence.
1. The mental capacity of the plaintiff was a fact, capable of...
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