Opinion
(Filed 3 May, 1911.)
1. Insurance — Parol Evidence — Policy — Merger — Cancellation — Reformation.
An acceptance of a policy of insurance merges all prior parol agreements and inducements leading up to it, and parol agreements may not vary, alter or contradict the written terms of the policy unless and until reformed or set aside in an action for mistake or fraud.
2. Insurance — Policy — Fraud or Deceit — Equity — Justice's Court — Jurisdiction.
A policy of life insurance may not be reformed on the ground of fraud or deceit in a court of a justice of the peace, the remedy sought being equitable, and the justice of the peace having no jurisdiction thereof.
3. Same — Appeal — Superior Court.
When the plaintiff seeks only equitable relief in a court of a justice of the peace, no jurisdiction can be acquired over the subject-matter by the Superior Court on appeal, the proceedings being void ab initio.
4. Insurance — Justice's Court — Jurisdiction — Contract — Tort.
An action brought by an insured to recover money due to him by an insurance company under its policy, whether in contract or tort arising in the transaction, is cognizable in a court of a justice of the peace where the recovery sought does not exceed the sum of $50 and no equitable remedy is sought.
5. Contracts — Fraud and Deceit — Evidence.
Evidence considered and held insufficient to establish actionable fraud or deceit.
(174) APPEAL from Daniels, J., at January Term, 1911, of DURHAM.
Appeal from justice of the peace tried before Daniels, J., and a jury, at January Term, 1911, of DURHAM. Evidence was offered, and on the argument before the court, the jury, the court having intimated an opinion that on the evidence, if believed, plaintiff was not entitled to recover, in deference to such intimation, plaintiff duly excepting, submitted to a nonsuit and appealed.
Manning Everett; Branham Brawley for plaintiff.
Bryant Brogden for defendant.
CLARK, C. J., concurs in the result.
There was no error in the ruling of the court below. It appeared that on 21 March, 1898, plaintiff took out a life insurance policy in defendant company, insuring his life for a period of ten years on payment of weekly premiums, and at the end of the specified time the policy contained several options looking to a continuance of the same on certain terms and also one numbered four in words as follows:
"4. Surrender this policy and draw the entire cash value, that is, the legal reserve computed according to the actuaries table of morality and four per cent interest, together with the dividend." The premiums having been paid for ten years and plaintiff having elected to terminate the contract relation under the fourth option set out above, the claim was calculated and the amount due under the provisions of said option $3.62 was duly tendered plaintiff and refused. Plaintiff made the refusal on the ground that the agent of the company during the bargain about the policy assured plaintiff that at the end of ten years he would (175) get back the premiums and interest thereon at four per cent and on the trial testified to that effect.
We have said in Floars v. Insurance Co., 144 N.C. 232-235: "It is also accepted doctrine that when the parties have bargained together touching a contract of insurance and reached an agreement, and in carrying out, or in the effort to carry out, the agreement a formal written policy is delivered and accepted, the written policy, while it remains unaltered, will constitute the contract between the parties, and all prior parol agreements will be merged in the written instrument; nor will evidence be received of prior parol inducements and assurances to contradict or vary the written policy while it so stands as embodying the contract between the parties. Like other written contracts, it may be set aside or corrected for fraud or for mutual mistake; but, until this is done, the written policy is conclusively presumed to express the contract it purports to contain," citing Beach's Laws of Insurance, secs. 495, 496; Vance on Insurance, 163, 348; Insurance Co. v. Mowry, 96 U.S. 547. This position being well recognized and the policy not providing for any such settlement or adjustment of plaintiff's claim as he now demands, a recovery could only be had by reformation of the policy or on the ground of fraud or deceit. The action having originated in the court of a justice of the peace and that court having no equitable jurisdiction in actions for reformation of written instruments, the first ground of relief is not open to plaintiff. Berry v. Henderson, 102 N.C. 525; Dougherty v. Sprinkle, 88 N.C. 301; Fisher v. Webb, 84 N.C. 44. And the demand can only be maintained, if at all, on the second ground stated, for fraud or deceit. The suit being for no more than fifty dollars, there is no defect of jurisdiction in this aspect of the case whether the action be considered as one in tort or in contract. Stroud v. Insurance Co., 148 N.C. 54; Duckworth v. Mull, 143 N.C. 461.
We concur in the opinion, however, that the evidence is not sufficient to sustain an action for fraud or deceit. Nor would it justify a reformation of the policy on that ground. True, plaintiff testified that defendant's agent assured him in general terms that the investment was as good as a savings bank and told him that under this clause four (176) he would get his premiums back with interest at four per cent, but these representations were not of a kind nor under circumstances that justified plaintiff in relying upon them, nor would they uphold the view that an actionable fraud had been perpetrated. The testimony showed that plaintiff was a man of fair intelligence and some business experience. He could read and write, had worked for about twelve months in a furniture store, taking written leases from purchasers; that he also worked in a grocery store five or six years, selling goods on time and entering up the items of charge in the credit department of the business, and in a hardware store for some months, where he had done the same thing; that plaintiff and defendant's agent, who solicited the insurance, had worked in a mill together, and there was nothing to show any disparity between them either in intellect or information, and the case, we think, comes clearly under the class considered and passed upon in Cathcart v. Insurance Co., 144 N.C. 623, and Clements v. Insurance Co., ante, 57.
There is no error and the judgment of nonsuit is
Affirmed.