Whitmire v. Provident Life & Accident Ins. Co. of Chattanooga, Tenn.

• Citation: 170 S.E. 118,205 N.C. 101
• Decision Date: 12 July 1933
• Docket Number: 612.
• Parties: WHITMIRE v. PROVIDENT LIFE & ACCIDENT INS. CO. OF CHATTANOOGA, TENN.
• Court: North Carolina Supreme Court

170 S.E. 118

205 N.C. 101

WHITMIRE v. PROVIDENT LIFE & ACCIDENT INS. CO. OF CHATTANOOGA, TENN.

No. 612.

Supreme Court of North Carolina

July 12, 1933

Appeal from Superior Court, Buncombe County; Clement, Judge.

Action by Carr Whitmire against the Provident Life & Accident Insurance Company of Chattanooga, Tennessee. From a judgment in favor of plaintiff, defendant appeals.

Reversed.

Evidence held to show that insured under accident and health group policy, with full knowledge, ratified provisions of policy at variance with alleged representations of insurer's alleged agent that certificate could not be canceled during employment; hence insured could not recover damages for alleged fraudulent issue and cancellation of policy.

Civil action to recover damages for alleged fraudulent issue and cancellation of accident and health policy of insurance.

The record discloses that on November 1, 1929, the defendant issued a policy of group insurance covering members of the Southern Railway System Employees' Pension Association of which plaintiff was a member.

Said policy contains the following provision with respect to the right of discontinuance: "Sec. (6) The Company shall have the option of declining to renew this policy at the expiration of any policy year following the effective date hereof if the total number of employees insured is less than Fifty per cent of the total average number of employees in service of the Employer. The Company agrees to give the Association Sixty days advance notice in writing in the event this option is exercised." A similar provision appears in the application for said policy which was executed and filed by the Employees' Pension Association.

As not more than 20 per cent. of the Southern Railway System employees took advantage of this group insurance, which number had been reduced to approximately 10 per cent. in September, 1931, the defendant notified plaintiff and all other insured employees that it elected to discontinue said insurance and that the same would terminate at the expiration of the policy year November 1, 1931. This notice was given only after repeated efforts to increase the number of employees in the association, failing in which, alternative offers of different insurance were made, but without success.

The gravamen of plaintiff's complaint is that M. L. Chunn, a member of the Employees' Pension Association, and who is alleged to have solicited plaintiff to join the association and take out a certificate of insurance under the group plan assured plaintiff that said certificate "could not be cancelled so long as he remained in the service of the Southern Railway."

The jury returned the following verdict:

"1. Did the defendant through its agent represent to the plaintiff that it could and would issue the plaintiff an accident and health policy described in the complaint containing the provisions alleged in the complaint, to be retained in force so long as the plaintiff remained in the active services of the Southern Railway System, or until such time as he was retired upon an old age pension? 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

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