This is an action at law to recover benefits allegedly owing under the terms of an insurance policy. It is not a controversy without action, submitted upon an agreed statement of facts for the determination of a question in difference between the parties, as' authorized by G.S. 1-250.
Dowling v. R. R.,
Absent the stipulations, the action was for trial upon evidence pertinent to the issues raised by the pleadings. The crucial issues were raised by the allegations of defendant’s further answer and defense and plaintiff’s reply thereto. They were, in substance, as follows: (1) Did defendant issue its policy in reliance upon false statements made by Swartzberg in his application therefor, as alleged by defendant? (2) If so, is defendant’s right to rescind the policy barred by estoppel or by waiver, as alleged by plaintiff? (3) Is defendant’s right to rescind barred by the statute of limitations? In lieu of having these issues determined upon evidence by the court or a jury, the parties submitted the case for determination by the court on stipulated facts.
G.S. 58-30 provides: “All statements or descriptions in any application for a policy of insurance, or in the policy itself, shall be deemed *155 representations and not warranties, and a representation, unless material or fraudulent, will not prevent a recovery on the policy.”
“Interpreting this statute, it is well settled that a material representation which is false will constitute sufficient ground upon which to avoid the policy.”
Tolbert v. Insurance Co.,
Defendant excepted to said additional finding of fact. True, unless so authorized by the stipulations under which the case was submitted, the 'court had no authority to make additional findings of fact.
Edwards v. Raleigh,
Whether the doctors who treated Swartzberg would have divulged the falsity of said statements in the application is not determinative. Nor does decision depend upon whether defendant, by questioning these doctors or otherwise, could have discovered^ within a reasonable time after January 2, 1952, that Swartzberg’s said statements were false.
The conclusions of law to the effect that defendant had waived its right to rescind by its failure to ascertain within six months from January 2, 1952, that said statements were false, and by its acceptance of premiums, are erroneous. The legal principles applicable to waiver are fully discussed in
Gouldin v. Insurance Co.,
In
Gardner v. Insurance Co.,
The burden of proof was on plaintiff to establish facts sufficient to constitute waiver or estoppel. Gouldin v. Insurance Co., supra; Peek v. Trust Co., supra. She failed to do so.
When we come to consider the statute of limitations, the shoe is on the other foot. Here, as indicated below, the burden of proof was on defendant.
It is noted that defendant, having paid or tendered a total of $325.30, an amount equal to the premiums paid by Swartzberg, seeks to avoid the policy ab initio and' in its entirety. Although called a further answer and defense, defendant’s plea is in legal effect a cross action to rescind the policy.
Plaintiff’s plea of the statute of limitations was sufficient. McIntosh, North Carolina Practice and Procedure, § 142, and cases cited. Defendant’s cause or right of action to rescind accrued on January 2, 1952, immediately after the issuance of the policy. “In general a cause or right of action accrues, so as to start the running of the statute of limitations, as soon as .the right to institute and maintain a suit arises, . . .” 54 C.J.S., Limitation of Actions § 109; 34 Am. Jur., Limitation of Actions § 113;
Aydlett v. Major & Loomis Co.,
Obviously, defendant’s alleged cause of action to rescind is barred by the three year statute of limitations if considered solely as an action for breach of contract. G.S. 1-52(1). The view most favorable to defendant is that G.S. 1-52(9) applies, under which an action “(f) or relief on the ground of fraud or mistake” must be .instituted within three years from the date the cause of action accrues, but in such case “the cause of action shall not be deemed to have accrued until the discovery 'by the aggrieved party of the facts constituting the fraud or mistake.” “In the construction of this section, the words, ‘relief on the ground of fraud,’ are used in the broad sense, to apply to all actions, both legal and equitable, where fraud is an element, and to all forms of fraud, including deception, imposition, duress, and undue influence.” McIntosh, North Carolina Practice and Procedure, § 183;
Little v. Bank,
The burden was on defendant to show that'it instituted its action to rescind within the period prescribed by statute.
Shearin v.
Lloyd;
*157
To reso/lve crucial factual issues raised by the pleadings, it was necessary to determine when defendant acquired knowledge or notice of the falsity of the statements in Swartzberg’s application. As to this, the stipulations .are silent. As indicated, with reference to estoppel and waiver, the burden of proof was on -plaintiff to show that defendant had paid claims or accepted premiums after it acquired such knowledge or notice; but to repel the bar of the three-year statute of limitations, the burden of proof was on defendant to show that it did not acquire such knowledge or notice until within a period of three years next preceding the filing of its cross action to rescind the policy.
Thus, the stipulations do not provide the answers to crucial factual issues raised by the pleadings. The question arises: When the stipulations are silent as to such facts, are the respective issues to be decided by the court adversely to the party -upon whom rests the burden of proof? This was done in
Brinson v. R. R.,
In
New Bern v. White,
Accordingly, the judgment is vacated and the 'cause remanded to the end that there may be a determination, in the light of the principles of law stated herein, of the facts necessary to a determination of the issues relating to (1) waiver and estoppel and (2) the statute of limitations. This course seems particularly appropriate when, as here, it appears that the court’s decision was based on a misapprehension as to the applicable principles of law.
Judgment vacated, cause remanded.