Kilgore v. Loyal Protective Ass'n

• Decision Date: 04 December 1917
• Parties: KILGORE. v. LOYAL PROTECTIVE ASS'N.
• Court: New Hampshire Supreme Court

102 A. 344

78 N.H. 498

KILGORE.

v. LOYAL PROTECTIVE ASS'N.

Supreme Court of New Hampshire. Coos.

Dec. 4, 1917.

Exceptions from Superior Court, Coos County; Chamberlln, Judge.

Assumpsit by Ernest D. Kilgore, by his guardian, Isabel Kilgore, against the Loyal Protective Association. At the close of plaintiff's evidence the defendant moved for a nonsuit. The motion was denied, and defendant brings exceptions. Exceptions sustained. Verdict set aside, and judgment for defendant.

The plaintiffs evidence tended to prove the following facts: On July 22, 1904, Ernest D. Kilgore applied for membership in the defendant association, a fraternal organization whose object was to protect its members by insurance. On July 28, 1904, a policy of insurance was issued to Kilgore "upon the conditions precedent that" he "shall pay on the first business day of March, June, September, and December in each year during the continuance of this contract the estimated amount of $3." Among other benefits provided for in the policy, the defendant agreed to pay the insured certain specified sums each week during his total disability, not exceeding 104 weeks. All the dues were paid up to and including those of December 1, 1912, which were paid by Mrs. Kilgore. The insured was taken sick on November 3, 1912. The nature of his sickness was excessive blood pressure or hypertension, and notice of it was sent to the defendant on the following day. The insured was totally disabled in consequence of his sickness, and became mentally incapable of doing business, and was in that condition in the following February, when the insured made proof of claim for total disability for 14 weeks. In reply to a letter by the defendant he wrote that "it is my understanding that the settlement of my claim would be in full for all this disability." Thereupon the defendant paid the amount claimed and the unearned premium for the remainder of the month, and canceled the policy. The insured's disability continued for the full period of 104 weeks specified in the policy. The dues that became due according to the terms of the policy on March 1st were not paid or tendered, and the defendant had no knowledge of the insured's mental condition at the time of the settlement, until January 13, 1914, when Mr. Libby, an attorney, whom Mrs. Kilgore had consulted, wrote to the defendant, stating the fact of insanity and claiming that the settlement was for that reason invalid. Several letters passed between Mr. Libby and the defendant, in one of which the defendant stated that it refused to waive any of its rights. Other facts appear in the opinion.

Ovlde J. Coulombe, of Berlin, for plaintiff. Fred C. Cleaveland, of Lancaster, and George F. Rich, of Berlin, for defendant.

WALKER, J. The defendant and the insured undertook by their negotiations in February, 1914, to terminate the policy and to adjust and settle the defendant's liability thereunder. The cancellation of the policy resulted from the contract of settlement, and not from the exercise by the defendant of its reserved right, evidenced by the policy, to terminate its liability at any time except when the insured is suffering from a disability entitling him to indemnity. The settlement was in form at least a termination of the contract. If the insured had been in a normal condition, as the defendant was justified in assuming he was, no doubt could be entertained that his request for and assent to the cancellation would be binding upon him, in the absence of fraud or imposition on the part of the insurer. There is no evidence that the defendant intended to mislead the insured in the attempted settlement, or knew or was chargeable with knowledge that he was not in a normal mental state and fully competent to make a binding contract. Nor is there any evidence that any agent of the defendant personally conferred with him at the time and might have observed indications of his mental incapacity. In fact, it is not denied that the negotiations were all carried on by correspondence and in the ordinary course of business. Ordinarily there is no presumption of insanity. Pettes v. Bingham, 10 N. H. 514.

Whether the contract for terminating the policy was absolutely void on account of the insanity of the insured, or merely voidable at his election or that of his duly constituted representative (Young v. Stevens, 48 N. H. 133, 2 Am. Rep. 202, 97 Am. Dec. 592; Hall v....