Kelley v. United Mut. Ins. Ass'n

• Decision Date: 10 January 1938
• Docket Number: No. 18854.,18854.
• Citation: Kelley v. United Mut. Ins. Ass'n, 112 S.W.2d 929 (Mo. App. 1938)
• Parties: KELLEY v. UNITED MUT. INS. ASS'N.
• Court: Missouri Court of Appeals

112 S.W.2d 929

KELLEY v. UNITED MUT. INS. ASS'N.

No. 18854.

Kansas City Court of Appeals. Missouri.

January 10, 1938.

Rehearing Denied January 31, 1938.

Appeal from Circuit Court, Jackson County; Daniel E. Bird, Judge.

"Not to be published in State Reports."

Action by Howard W. Kelley, administrator of the estate of Aurilla B. Ervin, deceased, who was substituted as plaintiff on the death of the deceased, against the United Mutual Insurance Association, a corporation, on four life policies issued by defendant and of which deceased was beneficiary. Judgment for plaintiff for $3,000, $1,000 having been previously paid as settlement, and defendant appeals.

Reversed and remanded.

Morrison, Nugent, Wylder & Berger, of Kansas City, and Irwin, Bushman & Buchanan, of Jefferson City, for appellant.

F. M. Kennard and Walter J. Gresham, both of Kansas City, for respondent.

SHAIN, Presiding Judge.

In this action the plaintiff seeks to recover on four policies of insurance issued by defendant on the life of Buford W. Ervin, in the amount of $1,000 each. In each of said policies Aurilla B. Ervin, wife of insured, is made the beneficiary.

Suit was filed by Aurilla B. Ervin on August 22, 1934. Mrs. Ervin died on October 8, 1934, and the administrator of her estate was duly substituted as the plaintiff.

Plaintiff's petition is in five counts. The first four counts are each conventional in form, declaring upon the policy and pleading requisites of such cause of action.

The fifth count of plaintiff's petition presents the vital issue before us for review and is as follows:

"For his fifth cause of action plaintiff makes all of the allegations of his first four causes of action a part of this his fifth cause of action, and states that after the death of said insured a representative of the defendant visited said beneficiary while she was ill and distracted, and that defendant falsely represented to her that said insured had made misrepresentations in obtaining said policies, and while she was mentally distracted and in no condition to know what was being done or to understand the nature thereof, said representative delivered to her the sum of One Thousand ($1,000.00) Dollars, instead of the sum of Four Thousand ($4,000.00) Dollars to which she was legally entitled, and fraudulently and by duress obtained the signature of said beneficiary to a release in full, and when she requested further payment defendant refused to pay and asserted that it had been released from all liability thereby.

"Plaintiff states that by reason of said fraud and duress said release is void and of no effect. Plaintiff states that by reason of said partial payment of One Thousand ($1,000.00) Dollars the defendant should be allowed credit in said sum upon his four causes of action as above set out."

Defendant's answer, as to each of the first four counts, is in conventional form denying liability on grounds of misrepresentations by insured in his application for insurance and further pleads a compromise settlement.

Defendant's answer as to the fifth count of plaintiff's petition is as follows:

"1. Answering the fifth count of plaintiff's amended petition, the defendant admits that it paid the plaintiff the sum of $1,000.00, but says that the same was paid as a compromise and settlement of all claim and demand under the four policies sued upon and in the manner hereinafter stated, and denies each and every other allegation in the fifth count of plaintiff's petition contained.

"2. Further answering the fifth count of plaintiff's petition, defendant says that after the death of Buford W. Ervin it discovered that the said Buford W. Ervin at the time of the making of his written application for membership in the defendant association and at the time of the issuance of the four separate certificates or policies sued upon in the first four counts of plaintiff's petition, was and had been suffering with a malignant injury to his foot, which was a cancerous condition; that he was and had been diseased and not in good health, and that within two years prior to the making of the application and the issuance of said certificates or policies, had received medical and surgical treatment; that a controversy then arose between the defendant association and Aurilla B. Ervin, the beneficiary named in said certificates or policies, as to whether or not said certificates were of any force and value, and as to whether or not the defendant association was indebted to the said Aurilla B. Ervin on account of said certificates on policies in any sum whatever; that because of the misrepresentations and false statements and warranties so made by the said Buford W. Ervin that he was not or had not been afflicted with cancer, that he was at the time not diseased but was in good health, and that he had not within two years received any medical or surgical treatment, it believed in good faith that it was not liable for any sum whatever on account of said certificates or policies, but that said certificates were null and void; but in order to settle the dispute with the said Aurilla B. Ervin, the beneficiary, and to avoid further controversy and litigation, it entered into a compromise settlement, an accord and satisfaction, with the said Aurilla B. Ervin, and defendant paid the said Aurilla B. Ervin the sum of $250.00 on each of said policies, or $1,000.00 in all, in full settlement, compromise, accord and satisfaction of her claim; that said Aurilla B. Ervin accepted said sum of $1,000.00 in full settlement, compromise, accord and satisfaction of her claim, agreed to and did release the defendant from further liability on account of said certificates or policies and each thereof, and surrendered said policies to the defendant to be cancelled, and at the same time released the defendant from any and all liability arising out of or on account of said certificates and each thereof; that said release was in writing duly made and executed by the said Aurilla B. Erwin, a duly verified copy thereof being attached hereto and marked Exhibit A. Defendant now pleads said settlement as an accord and satisfaction for any and all claim or claims under or on account of said four certificates or policies and each thereof. Defendant further says that the plaintiff further says that the plaintiff has ever since retained and still retains the said sum of $1,000.00 paid as aforesaid as a compromise and settlement and has not tendered or offered to tender back said sum to this defendant, and is thereby estopped from asserting any claim or right under or on account of said four certificates or policies or either thereof."

There are no questions raised as to incorporation, issuance of policies for due consideration, nor as to death of insured and due proof of same.

We deem it our duty to review this case with consideration to the theory assumed by plaintiff and defendant in the trial of the case in the circuit court. The theory upon which the issues were presented is best shown by plaintiff's principal instruction and by defendant's principal instruction which we set out in full.

Plaintiff's instructions are as follows:

"`The court instructs the jury that if you find and believe from the evidence that Buford W. Ervin was in good health at the time he took out the certificates of insurance mentioned in evidence, and if you further find that he was not then afflicted with cancer or other disease which caused or contributed to his death, and if you further find that Aurilla B. Irvin was in a distracted mental condition at the time she signed the release introduced in evidence, and if you find that defendant's representative took advantage of such mental condition, if any, to induce her to sign said release, and if you find that she could not and did not understand the nature and effect of the transaction, and if you find that she was unable to realize the antagonistic position of defendant's representative, then your verdict will be for the plaintiff in the sum of $3,000.00, and you may also allow interest on such sum at the rate of six per cent per annum from June 19, 1934, to date.'"

Defendant's instructions are as follows:

"`The court instructs the jury that if you find that after death of Buford Ervin, the defendant company received information that the said Buford Ervin was not in good health but was suffering from cancer at the time he applied for the policies of insurance,...