Kellogg v. Iowa State Traveling Men's Ass'n, 47056.

CourtUnited States State Supreme Court of Iowa
Citation29 N.W.2d 559,239 Iowa 196
Docket Number47056.
Decision Date11 November 1947

29 N.W.2d 559

239 Iowa 196


No. 47056.

Supreme Court of Iowa

November 11, 1947

[29 N.W.2d 560] [Copyrighted Material Omitted] [29 N.W.2d 561]

Dickinson & Dickinson and Jens Grothe, all of Des Moines, for appellant.

Evans, Riley, English & Jones, of Des Moines, for appellee.

BLISS, Justice.

The defendant, an Iowa corporation, with its principal place of business at Des Moines, Iowa, on March 14, 1931, issued to James M. Flowers its certificate of membership, naming Willie P. Flowers, wife of the insured, as the beneficiary. The insured on June 25, 1945, while driving his Chevrolet coupe on a street of Atlanta, Georgia, collided with a motor truck and died shortly thereafter. His widow, as beneficiary under the certificate, filed the petition in this action, and sometime thereafter and before trial, died. The ancillary administrator of her estate was then substituted as plaintiff.

The insured, sixty-eight years old at his death, was then [239 Iowa 200] a 'Class A Member' of defendant in good standing. Section 1 of Article II of its substituted bylaws, then in force, subject to the conditions, limitations, and exceptions thereinafter stated, provided: 'Whenever a member of this Association shall through accidental means receive bodily injuries which shall, independently and exclusively of all other causes, result within 90 days, in the death of the member, his beneficiary shall, in lieu of weekly indemnity in these bylaws provided, by indemnified in the sum of, (1) $5000.00 in case of Class A Member * * * at the time of injury, * * *.'

The petition, admitted the payment of $500, and prayed judgment under said section for $4500.

Defendant's answer did not challenge the petition other than to deny that the insured's [29 N.W.2d 562] death was the result of bodily injuries accidentally received, and independently and exclusive of all other causes, and to allege two separate defenses. The first of these alleged that among the conditions, limitations and exceptions in said Article II of the bylaws was the following:

'H. This association shall not be liable in excess of one-tenth (1/10) of the amounts in these by-laws provided for death, disability, or specific loss arising from, resulting in, or effected or aggravated by (1) infection; (2) heart disease; (3) appoplexy; (4) cerebral hemorrhage; (5) paralysis.'

Defendant alleged that the insured for sometime prior to his death had been suffering from heart disease, and that his death was effected thereby within the meaning of said paragraph 'H,' and therefore plaintiff was not entitled to recover in excess of ten percent of the maximum benefit otherwise payable under the certificate, to wit, $500.

Another separate defense alleged was that: The beneficiary submitted to defendant proofs of loss which included a doctor's certificate stating that the cause of death was coronary thrombosis and shock from auto accident, and after its receipt defendant sent to the beneficiary a draft for $500 stating on its face that the endorsement of the check by her as payee [239 Iowa 201] would be a settlement in full of all claims for indemnity because of the accidental injuries sustained; and the beneficiary endorsed the draft and secured the $500 and thereby accepted the conditions on which it was tendered and compromised and settled all claims that she might have against the defendant under the certificate.

In reply to the answer plaintiff alleged: That the death of the insured was caused by internal injuries and shock received in the collision, and not from heart disease or coronary thrombosis; that she received the $500 draft not in compromise and settlement of her claim of $5000, but as a credit thereon; that she did not sign the release accompanying the draft, nor surrender the certificate as requested by defendant; that her claim for $5000 was an absolute and liquidated demand to which defendant had no defense, and said claim was not of a doubtful nature and defendant so knew, and the claimed compromise and settlement was without any consideration and void; that it was of no effect because of overreaching; that the draft was in payment of an amount owing and due the beneficiary by virtue of the certificate, articles of incorporation and bylaws of defendant, and the purported compromise and settlement was without consideration, void, and not binding on plaintiff; and there was no bona fide dispute or good faith controversy touching the subject matter of the claimed compromise and settlement between the beneficiary and the defendant, and the acceptance of the draft did not constitute an accord and satisfaction.

All pleaded issues were submitted to the jury, and neither party excepted to any instruction, so that they are the law of the case. In instruction five the jury was told that 'the plaintiff has the burden of establishing by a preponderance or greater weight of the evidence that there was no accord and satisfaction. The burden was upon the plaintiff to establish by a preponderance of the evidence that the defendant association had no valid defense, in whole or in part, to Willie P. Flowers' claim, and knew this at the time it wrote the letter Exhibit 'A'; and if you find the plaintiff has so proven by the greater weight or preponderance of the evidence, then [239 Iowa 202] you must find that there was no accord and satisfaction; but, if you find the plaintiff has failed to so prove by the greater weight or preponderance of the evidence, the there was an accord and satisfaction and the plaintiff would not be entitled to recover anything in this case.'

At the close of all the evidence the defendant moved that the court direct a verdict for it upon three grounds, namely, (1) the evidence was insufficient to sustain a finding that the insured, through accidental means, received bodily injuries, which, independently and exclusively of all other causes, resulted in his death; (2) the evidence showed without dispute that heart disease was a contributing cause of insured's death, and, under paragraph 'H' of the bylaws, the defendant was liable for but one-tenth of $5000, or $500, which it had paid; (3) the acceptance of $500 was a full compromise and satisfaction of any claim [29 N.W.2d 563] the beneficiary might have had against the defendant.

The court ruled that plaintiff was entitled to go to the jury upon all the matters stated in each ground of the motion. Plaintiff then moved to withdraw from the jury the issue of accord and satisfaction. The motion was denied. The jury, by its verdict, assessed the amount of plaintiff's recovery at $4500.

Defendant filed a motion for judgment notwithstanding the verdict. The first two grounds of the motion were the same as in defendant's motion to direct. The third ground was: 'The undisputed admission, as well as the admissions in the pleadings, establish conclusively that the beneficiary in the certificate of James Mark Flowers accepted the payment of $500 tendered to her on condition that it be in full payment and compromise of any claim that she may have had against the defendant-Association on account of the death of James Mark Flowers. The record shows as a matter of law that there was an accord and satisfaction as pleaded by defendant, which is set forth in the third ground of defendant's motion for a directed verdict, and there was no evidence in the record which is sufficient to justify the submission to the jury of the question of whether or not the defendant knew that it had no defense to [239 Iowa 203] a claim of the beneficiary of James Mark Flowers under its certificate of membership * * * at the time it tendered to Willie P. Flowers $500 in full compromise and satisfaction of all claims.' A fourth ground of the motion was: 'The evidence showed without dispute that there was no basis for the claim of bad faith on the part of the defendant in the assertion that the death of James Mark Flowers arose from or was effected by heart disease.'

The court, after stating that the motion to direct and the motion for judgment were substantially the same, ruled: 'The court finds the grounds of the motion to direct and the motion for judgment * * * as set out in * * * Number (3) thereof, are good, and finds that any claim arising from the membership certificate referred to in this case, was unliquidated as well as the subject of a bona fide dispute. It is the opinion of the court that the proofs (of loss) submitted by the beneficiary, * * *, show on the face the basis of a good faith dispute, and that by accepting and endorsing the draft * * * and retaining the proceeds thereof, a complete accord and satisfaction was consummated. It is the opinion of the court that plaintiff failed to submit any evidence that defendant did not have a defense to a claim of $5000, nor are there any circumstances shown to indicate any knowledge by the defendant association that it was legally liable for the full amount. It is therefore the conclusion of the court that an accord and satisfaction on an unliquidated, disputed claim having been entered into between the parties, that the plaintiff is not entitled to recover in this case, and that the motion for judgment * * * should be and hereby is sustained.'

In his argument plaintiff states: 'The sole and only question presented by this appeal, as we understand the record, is whether or not (1) the issue of accord and satisfaction should have been submitted to the jury, [239 Iowa 204] and (2) whether, having been submitted to the jury, the verdict of the trial tribunal should have been permitted to stand.'

In opening its argument defendant states: 'It is not necessary to consider the other grounds of the motion to direct a verdict nor of the motion for judgment notwithstanding the verdict. The only question presented on this appeal is whether or not the settlement which was admittedly made, was...

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  • Kellogg v. Iowa State Traveling Men's Ass'n, 47056.
    • United States
    • United States State Supreme Court of Iowa
    • November 11, 1947
    ...239 Iowa 19629 N.W.2d 559KELLOGGv.IOWA STATE TRAVELING MEN'S ASS'N.No. 47056.Supreme Court of Iowa.Nov. 11, Appeal from District Court, Polk County; C. Edwin Moore, Judge. Action at law on $500 membership certificate of defendant by the administrator of the estate of the deceased beneficiar......

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