Kentucky Central Life & Acc. Ins. Co. v. Burrs

• Decision Date: 30 October 1934
• Citation: Kentucky Central Life & Acc. Ins. Co. v. Burrs, 256 Ky. 64, 75 S.W.2d 744 (Ky. Ct. App. 1934)
• Parties: KENTUCKY CENTRAL LIFE & ACCIDENT INS. CO. v. BURRS.
• Court: Kentucky Court of Appeals

75 S.W.2d 744

256 Ky. 64

KENTUCKY CENTRAL LIFE & ACCIDENT INS. CO. v. BURRS.

Court of Appeals of Kentucky

October 30, 1934

Appeal from Circuit Court, Fayette County.

Action by Sallie A. Burrs against the Kentucky Central Life &amp Insurance Company. From an adverse judgment, defendant appeals.

Reversed and remanded.

J Pelham Johnston, of Lexington, and Peter, Lee, Tabb, Krieger & Heyburn, of Louisville, for appellant.

R. E Lee Murphy, of Lexington, for appellee.

CREAL Commissioner.

In October, 1922, the Kentucky Central Life & Accident Insurance Company issued to Arthur Burrs, a colored man, a policy of insurance whereby it promised to pay to Sallie A. Burrs, wife of insured and beneficiary named in the policy, the sum of $100 in the event of his death from natural causes, and further agreed to pay the designated beneficiary the sum of $2,000 in the event of his death resulting directly and independently of all other causes through external, violent and accidental means. It provided, however, that the accidental death benefit should not be paid for death resulting from certain enumerated causes or for injuries sustained while the insured was "under the influence of narcotics or intoxicants," but that, if death was caused from any of these enumerated causes or from injuries sustained while insured was under the influence of narcotics or intoxicants, it would be deemed a natural death within the terms and provisions of the policy.

On or about September 11, 1932, while sprinkling the tracks of the Kentucky Trotting Horse Association at Lexington, insured fell from the sprinkler and sustained a broken neck and other injuries from which he died three or four days later. A few days after the death of insured, his widow, the beneficiary, and her two daughters, Lottie Fisher and Mary Burrs, went to the office of the company's manager at Lexington, where necessary proof was made and a policy for $72 which had been issued to deceased by the company and in which one of the daughters was made beneficiary was paid. It is not clear whether there was at this time any discussion respecting the policy in which Sallie Burrs was beneficiary, but it does appear that there were two or three conferences respecting this policy later on. The company's agent and manager contended that it was only liable for $100 on the policy, and based this contention on information he claimed to have acquired that insured was intoxicated at the time he received his injuries. The negotiations finally resulted in Sallie A. Burrs signing a written proposal dated October 14, 1932, whereby she agreed to accept the sum of $1,000 in full settlement of her claim under the policy, the offer to remain in force for ten days from the date thereof. On October 19 the company's check for $1,000 was delivered to her, and she signed a receipt and release which, omitting the signatures of herself and witnesses, reads:

"Received from the Kentucky Central Life and Accident Insurance Company One thousand dollars ($1000.00), which, to avoid litigation and expense, is paid and accepted in compromise and full settlement and satisfaction of all benefits and demands at law, and in equity claimed under said policy certificate numbered X-20428 to date, and I have and do hereby fully release and acquit said Kentucky Central Life and Accident Insurance Company from any and all further claims and demands of every kind and character by reason of said policy, and do hereby surrender and release to said company said policy certificate and all receipts and receipt books thereto.

Witness my signature this, the 19 day of Oct. 1932."

Within a day or so after she signed the agreement the check was paid to her.

Thereafter she instituted this action setting up the facts with respect to the death of her husband and seeking to recover the sum of $2,000 subject to credit by the amount theretofore paid and alleging that she had made demand upon the company, but that it had refused to pay any part thereof except the $1,000.

By answer, the company denied certain allegations of the petition with respect to its liability, but admitted that it issued the policy containing the provisions hereinbefore referred to, and alleged that, after the death of insured, a controversy arose between it and the beneficiary as to whether insured's death was accidental under the provisions of the policy or whether the injuries which resulted in insured's death were sustained while he was under the influence of intoxicants; the company taking the latter view and contending that it was only liable for $100 under the terms of the policy, and insured taking the other view and contending that she was entitled to the sum of $2,000. The company set up the proposal made by plaintiff to accept $1,000 in full settlement of her claim, its acceptance of the proposal, the execution of the receipt and release, and the payment of the check, and pleaded and relied thereon as a compromise settlement of the claim and the full and complete satisfaction thereof.

By a first paragraph of her reply, plaintiff denied the allegations of the answer with respect to the compromise settlement, and in a second paragraph pleaded that the alleged compromise settlement and release was procured through fraud and by the false and fraudulent representations of the company's agent. It was not alleged in the reply that plaintiff had paid back to the company the $1,000 she received in the settlement nor did she tender or offer to return same.

Defendant interposed a general demurrer to the second paragraph of the reply, and also entered motion to strike certain parts of the first and second paragraphs, but the demurrer and motions were overruled. Defendant by rejoinder controverted the affirmative allegations of the reply, and, on the issues thus made, trial before a jury resulted in a verdict and judgment in accordance with the prayer of the petition. Upon the return of the verdict, and before judgment was entered, defendant filed motion for judgment notwithstanding the verdict, which was overruled. Defendant's motion and grounds for new trial having been likewise overruled, it is appealing.

As the first ground relied on for reversal, it is argued, in substance, that the return or offer to return the sum paid in consideration, compromise, and settlement of a cause of action is a condition precedent...