Case Name: MRS. EVA TOLBERT v. THE MUTUAL BENEFIT LIFE INSURANCE COMPANY
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1952-11-05
Citations: 236 N.C. 416
Docket Number: 
Parties: MRS. EVA TOLBERT v. THE MUTUAL BENEFIT LIFE INSURANCE COMPANY.
Judges: 
Reporter: North Carolina Reports
Volume: 236
Pages: 416–419

Head Matter:
MRS. EVA TOLBERT v. THE MUTUAL BENEFIT LIFE INSURANCE COMPANY.
(Filed 5 November, 1952.)
1. Insurance § 37—
Proof of tbe execution and delivery of tbe policy of life insurance sued on in consideration of premium paid, and of tbe subsequent death of insured, makes out a prima facie case, with tbe burden on insurer to prove its defense of false and material representations avoiding tbe policy, and therefore in such instance insurer’s motion to nonsuit is properly denied.
2. Insurance § 31a (2)—
A policy of life insurance may be avoided by showing that insured made representations which were material and false.
3. Same—
A representation in an application for a policy of life insurance is deemed material if tbe knowledge or ignorance of it would naturally influence tbe judgment of insurer in making the contract, and written questions relating to health and their answers in an application are deemed material as a matter of law.
4. Insurance § 37—
Where insurer seeks to avoid a policy of life insurance on the ground of material and false representations made by insured in the written application for the policy, an instruction of the court which tends to leave the impression that it was not only necessary that insurer show that the repre sentations were false and material but also that they were fraudulently made with intent to deceive, must be held for prejudicial error.
Appeal by defendant from Sink, J., May Term, 1952, of Caldwell. New trial.
This was a suit on a policy of insurance on the life of J. Eay Tolbert issued by the defendant.
The policy in the sum of $5,000 was issued 1 May, 1951, and the insured died 12 December, 1951. The defendant admitted the issuance of the policy and the death of the insured, but denied liability on the ground that in his application the insured had made certain false and material representations which caused the defendant to act favorably on the application and to issue the policy.
Issues arising on the pleadings were submitted to the jury and answered in favor of the plaintiff.
The determinative issue submitted was in these words: “2. Did the deceased make false or fraudulent representations in his application, as alleged in the answer?” To this the jury answered “No.”
From judgment on the verdict for the amount of the policy the defendant appealed.
Folger L. To.ivnsend and James R. Todd, Jr., for plaintiff, appellee.
Williams & Whisnant and Hal B. Adams for defendant, appellant.

Opinion:
Devin, C. J.
The written application signed by the insured upon which the policy of insurance was issued contained the following questions and answers:
"29. Have you ever had eleetro-cardiographic or X-ray studies made? 29. No.
"31. A. Has a physician or other practitioner examined you within 2 months? 31. A. No.
"32. B. Have you had any reason, during the past six months, to think you might be physically impaired, temporarily or otherwise? 32. B. No.
"34. For what have you consulted, or been attended by a physician or surgeon or other practitioner during the past seven years? None."
There was evidence offered by the defendant that on 30 March, 1951, before the issuance of the policy 1 May, 1951, a physician had given the insured a thorough physical examination which included X-ray pictures and a stomach examination. The physician testified: "He (the insured) said he was tiring easily at his work, that his appetite was not as good as usual, and that he was generally not up to par. . . . During my examination I felt a lump over the liver area." The physician further testified that in June he saw the insured again and advised an exploratory opera tion. Tbis was bad in July, 1951, resulting in discovery that insured bad cancer of tbe liver wbicb in December following caused bis death.
Tbe defendant excepted to tbe denial of tbe motion for judgment of nonsuit, but evidence of tbe execution and delivery by tbe defendant of tbe policy of insurance on tbe life of tbe insured, in consideration of tbe premium, and tbe subsequent death of tbe insured made out a prima facie ease and put tbe burden on tbe defendant to substantiate its affirmative defense of false and material representations in tbe application. Hence nonsuit was improper. Davis v. Jenkins, ante, 283, 72 S.E. 2d 673; MacClure v. Casualty Co., 229 N.C. 305, 49 S.E. 2d 742.
Tbe defendant, however, assigns error in tbe instructions given tbe jury in that the court repeatedly referred to tbe ground of defendant's defense as "false or fraudulent" representations by the deceased, whereas tbe allegation was "false and material." Tbe court instructed tbe jury that tbe representations would not prevent recovery on tbe policy unless material or fraudulent, and thereupon charged as follows:
"Therefore, let us see for a moment what these, words mean in tbe language and in tbe sense that we are considering. A fraudulent representation is a representation of a subsisting fact falsely made, with knowledge of its falsity, intended and calculated to deceive, and wbicb does actually deceive, causing another to do what be would not have otherwise done. A false statement is an untrue or erroneous statement, intended and calculated to deceive and influence another. In law tbis word usually means something more than untrue. It means something designedly untrue and deceitful, and implies an intention to perpetrate some subterfuge or fraud."
Tbe defendant did not allege fraud. To avoid liability on tbe policy it was only required to show that tbe representations were material and that they were untrue. Bryant v. Ins. Co., 147 N.C. 181, 60 S.E. 983; Gardner v. Ins. Co., 163 N.C. 367, 79 S.E. 806; Schas v. Ins. Co., 166 N.C. 55, 81 S.E. 1014; Inman v. Woodmen of the World, 211 N.C. 179, 189 S.E. 496; Wells v. Ins. Co., 211 N.C. 427, 190 S.E. 744; Assurance Society v. Ashby, 215 N.C. 280, 1 S.E. 2d 830.
We think tbe court inadvertently left tbe jury under tbe impression that tbe defendant's defense was bottomed on fraud, and that it was necessary for tbe defendant to show not only that tbe representations were false but that they were made designedly with intent to defraud. True tbe issue submitted contained tbe words false or fraudulent, but tbe court's references to and definition of tbe meaning of fraudulent representations as pertinent to tbis case may have bad a prejudicial effect on tbe minds of tbe jury.
A representation in an application for an insurance policy is deemed material "if tbe knowledge or ignorance of it would naturally influence tbe judgment of the insurer in making the contract, or in estimating the degree and character of the risk, or in fixing the rate of premium." Wells v. Ins. Co., supra; Petty v. Ins. Co., 212 N.C. 157, 193 S.E. 228; Ins. Co. v. Box Co., 185 N.C. 543, 117 S.E. 785; Ins. Co. v. Woolen Mills, 172 N.C. 534, 90 S.E. 574.
The statute provides that statements in an application for a policy of insurance "shall be deemed representations and not warranties, and a representation, unless material or fraudulent, will not prevent a recovery on the policy." G.S. 58-30. Interpreting this statute, it is well settled that a material representation which is false will constitute sufficient ground upon which to avoid the policy.
In Assurance Society v. Ashby, 215 N.C. 280, 1 S.E. 2d 830, Justice Barnhill, speaking for the Court, said: "The representations made were material to the risk. They are in the form of written answers to written questions. In such case the questions and answers are deemed to be material by the acts of the parties to the contract." And in Petty v. Ins. Co., 212 N.C. 157, 193 S.E. 228, Justice Winborne used this language:
"It is settled law in North Carolina that answers to specific questions like the one asked in the instant case, where there had been medical examination, are material as a matter of law."
In the case at bar the credibility of the evidence to support the defendant's defense was a matter for the jury. There were no requests for instruction.
For the reasons herein stated we think there should be a new trial, and it is so ordered.
New trial.