Mutual Life Ins. Co. v. Leaksville Woolen Mills

• Decision Date: 22 November 1916
• Docket Number: 356.
• Citation: 90 S.E. 574,172 N.C. 534
• Parties: MUTUAL LIFE INS. CO. v. LEAKSVILLE WOOLEN MILLS ET AL.
• Court: North Carolina Supreme Court

90 S.E. 574

172 N.C. 534

MUTUAL LIFE INS. CO. v. LEAKSVILLE WOOLEN MILLS ET AL.

No. 356.

Supreme Court of North Carolina

November 22, 1916

Appeal from Superior Court, Rockingham County; Webb, Judge.

Consolidated actions by the Mutual Life Insurance Company against the Leaksville Woolen Mills and another. From adverse judgments defendants appeal. Affirmed.

A policy holder in a mutual life insurance company is not disqualified as "interested in the event of the action" to testify for the company suing to cancel another policy.

Two civil actions consolidated and tried as one, upon these issues:

(1) Did J. Sanford Patterson represent in his application for the insurance policies sued on that he had had no illnesses diseases, injuries or surgical operations since childhood except fracture of the femur in 1885? Answer: Yes.

(2) Was the said representation true? Answer: No.

(3) Did said J. Sanford Patterson represent in his application for the insurance policies sued on that he had not been prescribed for or treated by or had consulted any physician or practitioner in the past five years before the date of said application? Answer: Yes.

(4) Was the said representation true? Answer: No.

(5) Did the said J. Sanford Patterson in said application for the insurance policies sued on represent, in answer to the inquiry in that behalf, that he had stated all illnesses diseases, injuries, or surgical operations which he had had since childhood? Answer: Yes.

(6) Was said representation true? Answer: No.

(7) Did said J. Sanford, in answer to an inquiry in that behalf, state that he had named every physician and practitioner consulted by him in five years next previous to the said application, with dates of consultation? Answer: Yes.

(8) Was said representation true? Answer: No.

(9) Did Dr. W. E Reaves, on or about July 29, 1913, perform surgical operations on said J. Sanford Patterson for ethmoiditis and maxillary sinusitis? Answer: Yes.

(10) Did Dr. W. C. Banner, on or about the 15th day of May, 1909, perform a surgical operation on the said J. Sanford Patterson for polypus? Answer: Yes.

(11) Did the said J. Sanford Patterson consult Dr. W. P. Reaves, a physician, within five years prior to the date of his application for the policy sued on? Answer: Yes.

(12) Did the said J. Sanford Patterson consult Dr. W. C. Banner, a physician, within five years prior to the date of his application for the policy sued on? Answer: Yes.

(13) Were the said representations material to the risks applied for to be assumed? Answer: No.

Upon motion of plaintiff the court set aside the finding on the thirteenth issue, and held as matter of law that the representations were material, and rendered judgments, canceling the two policies of insurance upon return of the premiums paid thereon, with interest. Defendants appealed.

Pharr & Bell, of Charlotte, Ivie & Trotter, of Spray, and Lindsay Patterson, of Winston-Salem, for appellants.

Jas. H. Pou, of Raleigh, H. R. Scott, of Reidsville, and King & Kimball, of Greensboro, for appellee.

BROWN J.

The purpose of the action is to cancel two policies of insurance issued by plaintiff upon the life of James S. Patterson, one for the benefit of his estate, and the other for the Leaksville Woolen Mills.

The principal question presented upon this appeal relates to the effect of the statements made by the insured in his applications for the insurance. It is contended that these statements constituted a part of the contract, were material to the risk, and, being untrue, avoid the policies. The defendants excepted to the issues, and tendered others. It is well settled that the discretion of a trial judge in settling issues is not reviewable, provided they are so framed that the parties have opportunity to present every material phase of their contentions. Cunningham v. Railroad, 139 N.C. 427, 51 S.E. 1029, 2 L. R. A. (N. S.) 921; Redman v. Mullenax, 113 N.C. 505, 18 S.E. 708. The issues submitted present every controverted fact necessary to a decision of the case, while those tendered by defendants are very general in their terms, and not so well calculated to focus the minds of the jurors upon the exact facts alleged on one side and denied on the other as those submitted by the judge.

The defendants excepted to the testimony of Dr. Sweeney, upon the ground that he is a policy holder in plaintiff company and James S. Patterson is insane. The testimony of witness is material, and relates to transactions with Patterson in regard to the applications for the policies. He is not so "interested in the event of the action" as to disqualify him. The interest which disqualifies is a legal and pecuniary interest (Jones v. Emory, 115 N.C. 163, 20 S.E. 206), and it must be in the event of the action. Bunn v. Todd, 107 N.C. 266, 11 S.E. 1043; Mull v. Martin, 85 N.C. 406; Helsabeck v. Doub Adrier, 167 N.C. 205, 83 S.E. 241. The rights of the witness as a policy holder were not affected, so far as the evidence discloses, by the result of this action. His policy was subject to forfeiture for nonpayment of premiums and to many other contingencies usually provided in such instruments. He had no interest in the event of this action, or, if so, it is so infinitesimally small as to be impossible of ascertainment and comes within the maxim, "De minimis non curat lex."

It is unnecessary to discuss the many other exceptions relating to the evidence, as we think they are without merit and unimportant in the view we take of the case. The facts are practically undisputed, and the verdict of the jury upon the issues submitted could not well have been otherwise.

Before either of the policies were issued the insured signed an application, which contained the following language:

"All the following statements and answers, and all those that I make to the company's medical examiner in continuation of this application, are true and are offered to the company as an inducement to issue the proposed policy. I especially waive, on behalf of myself and of any person who shall have or claim any interest in any policy issued hereunder, all provisions of law forbidding any physician or other person who has attended or examined me, or who may hereafter attend or examine me, from disclosing any knowledge or information which he thereby acquired."

The application contained a report to be made by the medical examiner. The questions were to be propounded by him to the applicant and answered by the latter. At the end of the statement to the medical examiner is the following certificate of the insured:

"I certify that each and all of the foregoing statements and answers were read by me, and are fully and correctly recorded by the medical examiner.

James Sanford Patterson."

Upon the faith of this application and these answers, and on the report of the medical examiner, plaintiff issued and delivered the policies in August, 1913, and the defendants paid the first premium. There is no evidence whatever that plaintiff or its agents knew of any facts contrary to those stated by insured in his application. The jury found that the representations alleged to have been made by the insured were made by him to plaintiff's medical examiner, and that each and every of said statements were untrue. The jury found that on or about the 29th day of July, 1913, Dr. W. P. Reaves performed a surgical operation on insured for ethmoiditis and maxillary sinusitis, and that on or about the 15th day of May, 1909 (within the period of...