Cochran v. Nat'l Cas. Co.

• Decision Date: 03 January 1933
• Docket Number: No. 75.,75.
• Citation: 261 Mich. 273,246 N.W. 87
• Parties: COCHRAN v. NATIONAL CASUALTY CO.
• Court: Michigan Supreme Court

261 Mich. 273

246 N.W. 87

COCHRAN

v.NATIONAL CASUALTY CO.

No. 75.

Supreme Court of Michigan.

Jan. 3, 1933.

Appeal from Circuit Court, Muskegon County; John Vanderwerp, Judge.

Suit by James C. Cochran against the National Casualty Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

Argued before the Entire Bench.

Alexis J. Rogoski, of Muskegon, for appellant.

Harold H. Smedley, of Muskegon, for appellee.

FEAD, J.

Plaintiff had verdict of a jury and judgment in suit on a health and accident insurance policy. Defendant contends the court should have directed a verdict in its favor. This being the only claim of error, the facts must be taken most favorably to plaintiff.

Clarence Wilfong, defendant's agent to solicit policies and collect premiums, solicited plaintiff's policy, which was issued January 30, 1928. He told plaintiff he would call for the premiums every month. He or his representative called at plaintiff's home and collected premiums for over three years.

In May 1929, plaintiff sustained a broken leg and was disabled for sixty days. Defendant paid him $150, through Wilfong, deducting two months' premiums from the final payment as Wilfong did not collect during plaintiff's disability. Wilfong handled the matter and obtained the necessary doctor's certificates of the injury.

March 20, 1931, plaintiff contracted pneumonia and was incapacitated until May 13th. The March premium had been paid. On April 22d, when $75 was due plaintiff, defendant issued to him a check for $50, which Wilfong delivered to plaintiff at the hospital. The check contained a writing to the effect that its indorsement by the payee should be considered as full compromise and settlement and release and payment of all claims under the policy for the pneumonia or any continuance or effects thereof. Plaintiff, whose eyes were affected by the illness, said he did not read the writing, but indorsed the check, and his wife cashed it. There was no talk of settlement or compromise at the time, and Wilfong said the writing might have been a mistake on the part of the insurance company.

Wilfong also told plaintiff the company would settle with him as it had before, and that he, Wilfong, would fill out the final blanks when the doctor released plaintiff.

Wilfong did not call for the April, May, or June premiums, nor obtain the doctor's certificate of discharge of plaintiff from treatment. Plaintiff was always ready to make payment. He tried to get in touch with Wilfong, but could not.

June 12th plaintiff had an accident which resulted in loss of an eye. Wilfong was notified and then made the claim that the policy had lapsed for failure to pay the premiums.

July 14th plaintiff wrote defendant for payment of the balance of the pneumonia claim and for adjustment of the eye injury. Defendant replied, claiming, first, that the check for $50 was in full settlement and release of the pneumonia liability, and, second, there was no liability for the eye injury because the policy had lapsed for nonpayment of premiums.

Defendant urged these grounds on motion for directed verdict, and also that plaintiff had not furnished periodical doctor's reports required by the policy.

The policy also provided that, if continued in force by payment of premiums on or before the due dates, 5 per cent. would be added to the benefits for each period of three consecutive months immediately preceding the accident or illness.

Plaintiff had verdict of a jury for balance of the pneumonia claim, for the eye injury, and the accumulated additions.

The $50 check was not given and received in compromise. There was no dispute between the parties. Admittedly, $75 was then due plaintiff under the policy. The cases relative to the finality of a settlement or the necessity for tender back on compromise, induced by fraud or in case of dispute, are not...