Schenck, J.
There is no conflict in tbe evidence. It all tends to show tbe issuance of tbe policy, tbe payment of premiums, tbe total and permanent disability of tbe insured from tbe date claimed, tbe notice to tbe insurance company of such disability, and tbe institution of this action after tbe expiration of two years from tbe issuance of tbe policy. Tbe two-year incontestability clause in tbe policy sued on is made applicable to tbe “Supplemental Contract” for “Total and Permanent Disability” by these words: “No other provisions of said policy shall be held or deemed to be a part hereof, except (a) tbe provisions of said policy as to incontestability shall apply hereto, . . .” Tbe amounts contained in tbe answers to tbe fifth and sixth issues were agreed upon by tbe parties.
Tbe controversy centers around tbe fourth issue.
Tbe defendant issued an income policy, fifty-three-year endowment, upon tbe life of tbe plaintiff for six thousand dollars, dated 2 February, 1931, by tbe terms of which tbe defendant agreed to waive further payment of premiums and to pay certain benefits to tbe plaintiff, should be become totally and permanently disabled, tbe terms and conditions under which said benefits were payable being fully set forth therein. About May, 1931, tbe plaintiff permitted said policy to lapse for nonpayment of premiums, and, upon application, tbe policy was reinstated 28 September, 1931. About March, 1932, plaintiff made application to tbe defendant for benefits under tbe policy, and tbe defendant tendered to tbe plaintiff tbe return of all premiums, with interest, and notified him that it would resist and contest any payment under tbe policy, which return premiums tbe plaintiff declined to accept.
On 1 September, 1932, tbe plaintiff instituted an action in tbe recorder’s court of Cleveland County to recover tbe amount of benefits under said policy on account of alleged total and permanent disability from
19 November, 1931, till tbe institution of tbe action, namely, $480.00. Tbe defendant filed an answer in said recorder’s court, in wbicb it alleged tbat.it bad been induced to issue tbe policy by reason of false and fraudulent statements as to tbe condition of tbe bealtb of tbe plaintiff, wbicb were made in his written application for insurance dated 26 January, 1931, and that tbe defendant bad been induced to reinstate said policy by reason of similar false and fraudulent statements made in tbe plaintiff’s application for reinstatement of tbe policy dated 28 September, 1931.
Tbe cause came on for trial in tbe recorder’s court on 7 October, 1932, and judgment was rendered in favor of tbe defendant, from wbicb tbe plaintiff appealed to tbe Superior Court of Cleveland County. Tbe case pended on appeal in tbe Superior Court of Cleveland County until tbe March Term, 1934, thereof, when tbe plaintiff took a voluntary nonsuit, and thereafter, on 8 June, 1934, instituted this action in tbe Superior Court of Buncombe County.
At tbe trial of tbe instant case bis Honor, War lick, J., held that tbe judgment in tbe recorder’s court of Cleveland County was a bar to tbe recovery by tbe plaintiff of tbe amount sued for in that court, but was not a bar to tbe recovery of additional benefits accruing after that suit was instituted, and permitted tbe plaintiff to offer evidence tending to establish that such additional benefits bad accrued.
Judge Warlick refused to permit tbe defendant to introduce evidence to sustain its alleged defense based upon tbe procurement of tbe policy by false and fraudulent statements as to tbe condition of tbe plaintiff’s bealtb, made in bis applications for insurance and reinstatement, for tbe reason that tbe instant action was commenced after tbe time limit in tbe incontestability clause bad elapsed, and charged tbe jury that if they found tbe facts to be as shown by all tbe evidence they would answer tbe issues as shown in tbe record.
Tbe court’s ruling denying tbe defendant tbe right to introduce evidence tending to establish its defenses based upon allegations of fraud in tbe procurement of tbe policy, and bolding that tbe incontestability clause was applicable to this case, were made tbe bases of tbe defendant’s exceptive assignments of error.
Tbe first question presented to us for determination is whether tbe judgment in tbe recorder’s court of Cleveland County is a bar to tbe plaintiff’s setting up tbe incontestability clause of tbe policy. That judgment is as follows:
“This cause, coming on to be beard before tbe undersigned recorder
pro tem
for tbe recorder’s court of Cleveland County, on 7 October, 1932, and being tried, and after tbe introduction of evidence by tbe plaintiff and defendant and tbe argument of attorneys, tbe court is of
the opinion that the plaintiff is not to recover anything from the defendant in this action, and the issues of fact are answered in favor of the defendant;
“Now, therefore, it is order, adjudged, and decreed by the court that the plaintiff take nothing by this action. It is further ordered that the policy of life insurance sued upon by the plaintiff be and the same is hereby canceled and this action dismissed, and the costs are taxed against the plaintiff.”
It is well settled in this jurisdiction that a clause in a policy of life insurance making it incontestable after a given time covers the defense of alleged bad health of the insured at the time of delivery, and also that of false and fraudulent statements alleged to have been made by the insured in his application, as well as all other defenses except nonpayment of premiums.
Hardy v. Insurance Co.,
180 N. C., 180, and cases there cited.
The recorder’s court of Cleveland County had jurisdiction of the amount sued for, namely, $480.00, by reason of alleged disability benefits accruing up to the time of the institution of the action therein, and the holding of the Superior Court that that portion of the recorder’s judgment to the effect that the plaintiff take nothing was a bar to his recovery of that amount in this action is not appealed from. However, that portion of the judgment of the recorder’s court which provides that the life insurance policy sued upon by the plaintiff be canceled was void, since it was an attempt to administer equitable relief, namely, cancellation or rescission, and the recorder’s court of Cleveland County is without equitable jurisdiction.
Professor McIntosh, in his valuable work, N. C. Prac. and Proc., par. 62, p. 60, in speaking to the subject of the jurisdiction of our courts, says: “The Superior Court, prior to 1868, had exclusive equity jurisdiction, to be administered in accordance with the procedure existing in the English court of chancery. The new Constitution abolished the distinction between the two systems of procedure, but left the rights and remedies to be administered by the Superior Court, with all the powers formerly exercised by it as a court of equity. Such jurisdiction is still exclusive, in the absence of statutes conferring it upon some other court.” The recorder’s court of Cleveland County was created by chapter 243, Public-Local Laws of 1911, and an examination of this statute, and of the amendment thereto, chapter 390, Public-Local Laws of 1931, fails to reveal that any equitable jurisdiction has been conferred upon the court thereby created.
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Schenck, J.
There is no conflict in tbe evidence. It all tends to show tbe issuance of tbe policy, tbe payment of premiums, tbe total and permanent disability of tbe insured from tbe date claimed, tbe notice to tbe insurance company of such disability, and tbe institution of this action after tbe expiration of two years from tbe issuance of tbe policy. Tbe two-year incontestability clause in tbe policy sued on is made applicable to tbe “Supplemental Contract” for “Total and Permanent Disability” by these words: “No other provisions of said policy shall be held or deemed to be a part hereof, except (a) tbe provisions of said policy as to incontestability shall apply hereto, . . .” Tbe amounts contained in tbe answers to tbe fifth and sixth issues were agreed upon by tbe parties.
Tbe controversy centers around tbe fourth issue.
Tbe defendant issued an income policy, fifty-three-year endowment, upon tbe life of tbe plaintiff for six thousand dollars, dated 2 February, 1931, by tbe terms of which tbe defendant agreed to waive further payment of premiums and to pay certain benefits to tbe plaintiff, should be become totally and permanently disabled, tbe terms and conditions under which said benefits were payable being fully set forth therein. About May, 1931, tbe plaintiff permitted said policy to lapse for nonpayment of premiums, and, upon application, tbe policy was reinstated 28 September, 1931. About March, 1932, plaintiff made application to tbe defendant for benefits under tbe policy, and tbe defendant tendered to tbe plaintiff tbe return of all premiums, with interest, and notified him that it would resist and contest any payment under tbe policy, which return premiums tbe plaintiff declined to accept.
On 1 September, 1932, tbe plaintiff instituted an action in tbe recorder’s court of Cleveland County to recover tbe amount of benefits under said policy on account of alleged total and permanent disability from
19 November, 1931, till tbe institution of tbe action, namely, $480.00. Tbe defendant filed an answer in said recorder’s court, in wbicb it alleged tbat.it bad been induced to issue tbe policy by reason of false and fraudulent statements as to tbe condition of tbe bealtb of tbe plaintiff, wbicb were made in his written application for insurance dated 26 January, 1931, and that tbe defendant bad been induced to reinstate said policy by reason of similar false and fraudulent statements made in tbe plaintiff’s application for reinstatement of tbe policy dated 28 September, 1931.
Tbe cause came on for trial in tbe recorder’s court on 7 October, 1932, and judgment was rendered in favor of tbe defendant, from wbicb tbe plaintiff appealed to tbe Superior Court of Cleveland County. Tbe case pended on appeal in tbe Superior Court of Cleveland County until tbe March Term, 1934, thereof, when tbe plaintiff took a voluntary nonsuit, and thereafter, on 8 June, 1934, instituted this action in tbe Superior Court of Buncombe County.
At tbe trial of tbe instant case bis Honor, War lick, J., held that tbe judgment in tbe recorder’s court of Cleveland County was a bar to tbe recovery by tbe plaintiff of tbe amount sued for in that court, but was not a bar to tbe recovery of additional benefits accruing after that suit was instituted, and permitted tbe plaintiff to offer evidence tending to establish that such additional benefits bad accrued.
Judge Warlick refused to permit tbe defendant to introduce evidence to sustain its alleged defense based upon tbe procurement of tbe policy by false and fraudulent statements as to tbe condition of tbe plaintiff’s bealtb, made in bis applications for insurance and reinstatement, for tbe reason that tbe instant action was commenced after tbe time limit in tbe incontestability clause bad elapsed, and charged tbe jury that if they found tbe facts to be as shown by all tbe evidence they would answer tbe issues as shown in tbe record.
Tbe court’s ruling denying tbe defendant tbe right to introduce evidence tending to establish its defenses based upon allegations of fraud in tbe procurement of tbe policy, and bolding that tbe incontestability clause was applicable to this case, were made tbe bases of tbe defendant’s exceptive assignments of error.
Tbe first question presented to us for determination is whether tbe judgment in tbe recorder’s court of Cleveland County is a bar to tbe plaintiff’s setting up tbe incontestability clause of tbe policy. That judgment is as follows:
“This cause, coming on to be beard before tbe undersigned recorder
pro tem
for tbe recorder’s court of Cleveland County, on 7 October, 1932, and being tried, and after tbe introduction of evidence by tbe plaintiff and defendant and tbe argument of attorneys, tbe court is of
the opinion that the plaintiff is not to recover anything from the defendant in this action, and the issues of fact are answered in favor of the defendant;
“Now, therefore, it is order, adjudged, and decreed by the court that the plaintiff take nothing by this action. It is further ordered that the policy of life insurance sued upon by the plaintiff be and the same is hereby canceled and this action dismissed, and the costs are taxed against the plaintiff.”
It is well settled in this jurisdiction that a clause in a policy of life insurance making it incontestable after a given time covers the defense of alleged bad health of the insured at the time of delivery, and also that of false and fraudulent statements alleged to have been made by the insured in his application, as well as all other defenses except nonpayment of premiums.
Hardy v. Insurance Co.,
180 N. C., 180, and cases there cited.
The recorder’s court of Cleveland County had jurisdiction of the amount sued for, namely, $480.00, by reason of alleged disability benefits accruing up to the time of the institution of the action therein, and the holding of the Superior Court that that portion of the recorder’s judgment to the effect that the plaintiff take nothing was a bar to his recovery of that amount in this action is not appealed from. However, that portion of the judgment of the recorder’s court which provides that the life insurance policy sued upon by the plaintiff be canceled was void, since it was an attempt to administer equitable relief, namely, cancellation or rescission, and the recorder’s court of Cleveland County is without equitable jurisdiction.
Professor McIntosh, in his valuable work, N. C. Prac. and Proc., par. 62, p. 60, in speaking to the subject of the jurisdiction of our courts, says: “The Superior Court, prior to 1868, had exclusive equity jurisdiction, to be administered in accordance with the procedure existing in the English court of chancery. The new Constitution abolished the distinction between the two systems of procedure, but left the rights and remedies to be administered by the Superior Court, with all the powers formerly exercised by it as a court of equity. Such jurisdiction is still exclusive, in the absence of statutes conferring it upon some other court.” The recorder’s court of Cleveland County was created by chapter 243, Public-Local Laws of 1911, and an examination of this statute, and of the amendment thereto, chapter 390, Public-Local Laws of 1931, fails to reveal that any equitable jurisdiction has been conferred upon the court thereby created. While the recorder’s court of Cleveland County, in like manner as a justice of the peace, may have the right to allow an equitable defense, this does not extend to it the right to affirmatively administer equitable relief. See cases cited under par. 62, N. C. Prac. and Proc.,
supra.
The setting up in the answer in the recorder’s court of the defense of fraud in the procurement of the policy, and the tendering of the amount of premiums theretofore paid, was nothing more than notice by the defendant to the plaintiff of its intention to rescind the policy. It was not a rescission thereof for the reason that the company alone could not rescind it, nor could the company procure a valid judgment rescinding it from a court without equitable jurisdiction. It was necessary for the insurer, within the time allowed in the incontestability clause, to bring suit in a court of competent equitable jurisdiction for the cancellation of the policy to prevent it from remaining binding and enforceable by the insured.
Trust Co. v. Insurance Co.,
173 N. C., 558. "Like other written contracts, it (the policy) 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.”
Wilson v. Insurance Co.,
155 N. C., 173 (175).
The court was correct in holding that the judgment of the recorder’s court was not a bar to the plaintiff’s setting up the incontestability clause in this action, and, since such clause was so set up, the court was also correct in ruling that the evidence tending to show the ill health of the plaintiff or false and fraudulent statements in his applications for insurance and reinstatement was incompetent, since under the two-year incontestability clause the policy could be contested in this action, instituted more than two years since the issuance of the policy, only upon the ground of nonpayment of premiums.
In the trial and judgment in the Superior Court we find
No error.
Devin, J., took no part in the consideration or decision of this case.