#### OMA MINK McLAIN v. SHENANDOAH LIFE INSURANCE CO.

(Filed 3 January, 1945.)

1. Fraud § 1—

Fraudulent statements, sufficient to vitiate an instrument, must be false representations of fact, peculiarly within the knowledge of the party making them, and where the parties, dealing at arms length, have equal means of information, so that with ordinary prudence and diligence either may rely upon his own judgment, they are presumed to have done so, and, if not, they must abide the consequences.

2. Fraud § 11—

In an action to recover double indemnity on a policy of insurance, where all the evidence tended to show that plaintiff settled with the defendant for the face of the policy, without double indemnity, though plaintiff knew the policy carried a rider providing double indemnity and that defendant was contesting the validity of such rider, and that plaintiff signed a full release after an hour’s negotiation with defendant’s representatives, having had the policy in her possession for five weeks before the settlement without excuse for not reading it, and that plaintiff relied on alleged false statements of defendant’s agents that the double indemnity provision was not effective, a motion for judgment as of nonsuit should have been allowed.

*838Appeal by defendant from *Clement, I.,*at September Term, 1944, of Eobsyth.

This- is a civil action to recover upon a double indemnity provision of an insurance policy issued by tbe defendant upon tbe life of Robert Sherrill McLain in which the plaintiff, Oma Mink McLain, his wife, was beneficiary. The insured was killed in a collision between the motorcycle on which he was riding and a truck. The plaintiff accepted the check of the defendant for $2,500.00, and executed and delivered a release of all claims against the defendant. The plaintiff now contends that the execution and delivery by her of a release of all claims against the defendant company was procured by misrepresentation and fraud practiced on her by the defendant, and seeks to avoid the release and to recover the double indemnity provided in the policy. The defendant denies that it practiced any misrepresentation or fraud upon the plaintiff.

The policy in suit was first written to cover only indemnity of $2,500.00 upon the death of the insured, but there was subsequently attached thereto a supplemental contract for “Double Indemnity Benefit,” which provided for payment of an additional $2,500.00 “if the insured . . ., shall die as a result of any bodily injury effected while not under the influence of intoxicants, directly through external, violent and accidental means, . . . provided such death does not result . . . from any violation of the law.”

There arose upon the contradictory allegations and contentions of the plaintiff and defendant the fourth issue which was submitted to the jury, to wit: “4. Was the plaintiff induced to accept the check and execute the release by the fraudulent misrepresentation of the defendant, as alleged in the complaint and reply?”

The jury answered the fourth issue in the affirmative, as contended for by the plaintiff, and the other issues were also answered in favor of the plaintiff. The court entered judgment, predicated on the verdict, that the plaintiff recover of the defendant the amount suéd for, namely, $2,500.00. From this judgment the defendant appealed, assigning errors.

*II. II. Leake, Fred 8. Hutchins, and H. Bryce Parker for plaintiff, appellee.*

*Womble, Carlyle, Martin & Sandridge for defendant, appellant.*

Schenok, J.

The defendant, appellant, states in his brief: “On this appeal the appellant chooses to rely upon its Assignments of Error Nos. 1, 3 and 4, which relate to the signing of the judgment and to the overruling of the defendant’s motion for judgment as of nonsuit made at the conclusion of the plaintiff’s evidence and renewed at the conclusion of all the evidence.” It is the contention of the defendant that there was not *839sufficient evidence of fraudulent misrepresentation to be submitted to the jury, and since the plaintiffs alleged cause of action is bottomed upon the allegation of fraud in the procurement of the release executed and delivered by her, the motion of the defendant for a judgment as in case of nonsuit, or to dismiss the action, should have been allowed. There appears in the brief of the plaintiff, appellee, the following: “As stated by the defendant, the sole question now before the Court is whether there was sufficient evidence of fraud for the jury.”

*We*adopt the statement that “the sole question now before the Court is whether there was sufficient evidence of fraud for the jury.”

The fraud alleged and relied upon by the plaintiff consisted of the alleged false statements made by the representatives of the defendant to the plaintiff as to the provisions contained in the policy, namely, that the policy had not been in force long enough to put in effect the provision for double liability, and that the policy did not cover death caused by a motorcycle. The policy, of which she was the beneficiary and which was the subject of the settlement, was in the possession of the plaintiff, and, according to her own testimony, she had known the policy contained double indemnity provision from the time it was issued in December, 1934, that she had access to it during her husband’s lifetime and since his death it had been in her possession. The double indemnity contract was on a separate piece of paper attached to the policy and its provisions stated in plain easily understood language. There is no evidence of .any resort to artifice or trick to prevent plaintiff from reading the contract. She was literate, and had been for six or seven years helping her father in his business, keeping his books, writing and depositing his checks, and carrying on his correspondence. She testified that she discussed the settlement with the representatives of the defendant for approximately an hour and relied upon their statements as to the provision of the double indemnity contract instead of reading the provision herself. She and the representatives of the defendant were dealing at arms length. She had the contract during the negotiation for settlement and delivered it to said representatives only after she had signed the total release and received the check for $2,500.00.

The plaintiff’s own testimony shows that she had every opportunity to know the contents of the double indemnity provision of the insurance contract. If she did not read the provision there was nothing to prevent her from doing so. As to her reading or failure to read such provision her own testimony shows she was a perfectly free agent. She not only had the contract for five weeks prior to the execution of the release, but it was actually in her possession during the discussion of the settlement, which she says lasted an hour. The principle applicable to alleged fraudulent statements relied upon to vitiate an instrument, is stated in *840
      *Ward v. Heath,*222 N. C., 470, 24 S. E. (2d), 5, as follows: “It must be a false representation of fact materially affecting tbe value of tbe contract and wbicb is peculiarly witbin tbe knowledge of tbe person making it and in respect to wbicb tbe other person in tbe exercise of proper vigilance bas not an equal opportunity of ascertaining tbe truth.”

Tbe principle with which we are now concerned is also clearly stated in Cooley on Torts (Fourth Edition), at page 580, in tbe following words: “Where ordinary care and prudence are sufficient for full protection, it is tbe duty of tbe party to make use of them, and that, therefore, if false representations are made regarding matters of fact, and tbe means of knowledge are at band and equally available to both parties, and tbe party, instead of resorting to them, sees fit to trust himself in tbe bands of one whose interest it is to mislead him, tbe law, in general, will leave him where be bas been placed by bis own imprudent confidence.”

It bas long been a recognized principle of law that where parties have equal means of information, so that with ordinary prudence and diligence, either may rely upon bis own judgment, they are presumed to have done so, or, if they have not done so, they must abide tbe consequences.

Furthermore, it appears from tbe evidence that tbe plaintiff bad knowledge of tbe fact that tbe defendant was contesting any payment under tbe double indemnity feature of tbe contract a considerable time before she accepted tbe check and signed and delivered tbe release, and notwithstanding this knowledge she relied upon tbe alleged statements of tbe defendant’s representatives, rather than make her own investigation. “A party having notice must exercise ordinary care to ascertain tbe facts, and if be fail to investigate when put upon inquiry, be is chargeable with all tbe knowledge be would have acquired, bad be made tbe necessary effort to learn tbe truth of tbe matters affecting bis interests. *Austin v. George,*201 N. C., 380, 160 S. E., 364; *Wynn v. Grant, 166*N. O., 39, 81 S. E., 949; *Hwbank v. Lyman,*170 N. C., 505, 87 S. E., 348; *Sanderlin v. Gross,*172 N. C., 234, 90 S. E., 213.” *Hargett v. Lee,*206 N. C., 536, 174 S. E., 498.

We are of tbe opinion, and so bold, that even if tbe representatives of tbe defendant company did make to tbe plaintiff tbe false statements regarding tbe provisions of tbe policy she alleges they made, namely, that tbe policy bad not been written a sufficient length of time to cover death by accident or that tbe policy did not cover death due to a motorcycle, there was no actionable fraud, for tbe reason tbe plaintiff failed to take advantage of tbe opportunity she bad to inspect tbe policy and to learn tbe truth as to its provision. Therefore we bold that tbe Superior Court erred in overruling tbe defendant’s demurrer to tbe evidence, and in declining to allow bis motion for judgment as in case of nonsuit and to *841dismiss tbe action, as on tbe record it was barred by tbe statute of limi- ' tations.

For tbe reasons given, tbe judgment below is

Beversed.