Industrial Mutual Indemnity Company v. Thompson

• Decision Date: 22 July 1907
• Citation: 104 S.W. 200,83 Ark. 575
• Parties: INDUSTRIAL MUTUAL INDEMNITY COMPANY v. THOMPSON
• Court: Arkansas Supreme Court

104 S.W. 200

83 Ark. 575

INDUSTRIAL MUTUAL INDEMNITY COMPANY v. THOMPSON

Supreme Court of Arkansas

July 22, 1907

Appeal from Phillips Circuit Court; Hance N. Hutton, Judge affirmed.

STATEMENT BY THE COURT.

Appellee's mother, Margaret Johnson, was insured with appellant company for $ 210, provided that at the time of her death all dues and assessments due the company were paid. The complaint of appellee alleged that Mrs. Johnson died on March 18, 1906 that all dues and assessments were fully paid; that appellant had paid $ 28.50, and refused to pay the balance. Judgment was asked for $ 181.50. Appellant answered and admitted that in consideration of weekly payments of fifty cents to be paid appellant on or before each Monday during the continuance of the contract, it had insured Mrs. Johnson in the sum claimed. Appellant admitted that appellee was the beneficiary, and admitted the death of the assured. Appellant set up in defense that the policy provided that, "if any payment shall be in arrears more than four weeks, the policy shall become void, and the payments already made be forfeited to the company." It was also provided that the condition which avoids the policy shall not be waived by the acceptance of payments in arrears. Appellant alleged that Mrs. Johnson at the time of her death had failed to make weekly payments for seven weeks, from January 29, 1906, to March 14, 1906 when appellee sent to an agent of appellant the sum of $ 4. Appellant also set up a written receipt signed by appellee and delivered to appellant acquitting appellant of all further liability.

Appellee replied to the answer, alleging that she was an ignorant negro woman, and knew nothing of the rules governing transactions set forth in the receipt which appellant holds and averring that appellant, well knowing her ignorance of such transactions, represented to her that the policy had lapsed and was void because her mother had failed for more than four weeks to make payments of dues; that appellant advised her that it would be for her best interest to accept the $ 28 and execute the receipt. Appellee further alleged that the representations were made by the general agent of the company for the fraudulent purpose of deceiving and depriving appellee of the benefit of the proceeds of the policy; that the representations were false and known to be false at the time they were made by the agent who made them; and that she, being ignorant of the facts and believing that the agent was advising her for her best interests, acted upon such advice in signing the receipt. She alleged that the receipt, by reason of the false and fraudulent representation, coercion and undue influence of appellant in causing her to execute same, was without consideration as an acquittance for a larger sum than $ 28, and did not bar appellee's right to recover the balance claimed.

The appellee proved that her mother had a policy in appellant company, that appellee was the beneficiary. Appellee paid the dues for her mother. She lived at Marvel, in Phillips County, and would pay dues to the agent McCain when he came out from Helena to collect same. That she paid in advance sometimes two or three dollars at a time when the agent would come out and ask for it. The last payment she made before the death of her mother was January 29th. Her mother died March 18. On the 14th of March she received a letter from the agent, McCain, who had been collecting the dues, in which he said: that there were such a few out there he wouldn't come any more to collect, and for appellee to send him four dollars, and he further wrote: "I will never allow it to run out." The next day appellee sent the money. She says that McCain said that four dollars were then due.

It was shown the amount received for dues was entered in a book, and that according to this the last payment of dues before the four dollars were sent was on January 29, when appellee paid fifty cents. Appellee executed to appellant a receipt for $ 28 "in full settlement of all claims and demands" against appellant arising under the policy sued on. Appellee details the circumstances under which the receipt was executed as follows: "When the agent came, I asked him, 'Is my mama all right? There is nothing behind now is there, and you will pay the money, won't you?' And he said, 'Of course, we will pay the money. You come in Saturday, and the money will be in my office.' When I got there, he had a great long letter stating that my mother was unfinancial, and he told me: 'The best thing you can do is to take what you paid in for your mother, because you can't get nothing else.' I thought he was telling me the truth about it, is the reason I took it. He advised me as a friend, and said, inasmuch as it was me he would pay the amount I had paid in, said that was the best I could do, and all I could get, and I relied upon his word and signed the paper because I didn't know nothing else to do." Appellee testified that she was a colored woman. The appellant introduced the policy which contained the following conditions:

"3. If any of the statements or warranties herein referred to, and upon which this policy is granted, be not true, or if the conditions of said policy be not in all respects observed, or if this policy shall be in arrears more than four weeks, this policy shall thereupon terminate or become void, all payments paid shall be forfeited to the company except as provided herein, and it is expressly stipulated and agreed that the foregoing provisions, which avoid the policy, in case any payment shall be in arrears more than four weeks, shall not be considered in any respect waived by any act of grace by the company in the acceptance of payments in arrears more than four weeks upon this or any other policy."

"4. The contract between the parties hereto is completely set forth in this policy and the application therefor, taken together, and none of its terms can be varied or modified nor any forfeiture waived, except by agreement in writing signed by one of the following officers, namely the president, vice president, secretary, whose authority will not be delegated; no other person has or will be given authority. Therefore agents, which terms includes superintendents and assistant superintendents, are not authorized, and have no power, to make, alter, or discharge contracts or waive forfeitures or receive payments on policies in arrears more than four weeks, or to receipt for same in the receipt book, and all such arrears given to an agent shall be at the sole risk of those who pay them, and shall not be credited upon the policy, whether entered in the receipt book or not."

Appellant introduced the receipt book in which the payments were entered from time to time as they were made, showing that the last payment was made as above mentioned, and containing this recital: "Agents are required to call with regularity for the weekly payments, but an omission to do so will not be an excuse for your policy being in arrears. * * * All moneys paid at the time of application for membership and every subsequent payment must be entered in this book."

Witness Metlock on behalf of appellee testified that he was in the employ of appellant from October 26, 1904, to April 20, 1906; that he was the superintendent of agencies, and his duties were also to solicit for business, to collect premiums on same, and to adjust and settle claims. McCain was an employee of the appellant at the same time. He turned over to witness Metlock money received by him from one Florence Thompson or Margaret Johnson as dues and assessments on the policy sued on. This money, all, except the four dollars which was collected after the policy had been cancelled, was turned over to appellant company to be credited on the policy as dues. He did not turn over the four dollars because that was received after the policy had lapsed, and it was the instructions of appellant to hold such money until official notice was received from the company that same had been received and placed upon the company's books, and in this instance the holder of the policy died before he had forwarded revival application to the company at Little Rock.

The duties of McCain were to solicit for new business and to collect premiums on policies of insurance as long as they were in force, or until the dues were four weeks or more in arrears. The witness in regard to the receipt testified as follows:

"On the day of appointment Florence Thompson came to my office, and I told her that I had a letter from the company, and showed her the letter. I further told her the policy on her mother had been cancelled for non-payment of dues, and that the company was not liable in any way under the same, and read to her clause "four" in the policy, showing her why the company was not liable, etc. She then said that she owed a funeral bill, etc. And that she thought that, if we would give her her money back, she could satisfy the undertaker, etc. I then counted up what had been paid on the policy and gave it to her--twenty-eight dollars in all--explaining to her that the company was donating the amount only, as we owed her nothing. I then read the receipt, which she afterwards signed and which is attached hereto, to her, and gave same to her to read for herself, and explained fully that she was signing a receipt in full against all claims against the company under her mother's policy. She said she was glad to get twenty-eight dollars, as she realized fully that she was entitled to nothing, and, thanking me for my kindness, etc., went out. As agent of the company, I received from Florence Thompson a receipt, which I file with my deposition."

The contents of the receipt are set forth. Instruction No. 2 given by the court, was as...