Limbaugh v. Monarch Life Ins. Co., Springfield, Mass.

• Decision Date: 02 July 1935
• Docket Number: No. 23589.,23589.
• Court: Missouri Court of Appeals
• Parties: LIMBAUGH v. MONARCH LIFE INS. CO., SPRINGFIELD, MASS.

84 S.W.2d 208

LIMBAUGH v. MONARCH LIFE INS. CO., SPRINGFIELD, MASS.

No. 23589.

St. Louis Court of Appeals. Missouri.

July 2, 1935.

Rehearing Denied July 16, 1935.

Appeal from Cape Girardeau Court of Common Pleas; L. L. Bowman, Judge.

"Not to be published in State Reports."

Action by William L. Limbaugh against the Monarch Life Insurance Company, Springfield, Mass. From a judgment in favor of plaintiff, defendant appeals.

Affirmed.

Leahy, Saunders & Walther and Lyon Anderson, all of St. Louis, and Dearmont, Spradling & Dalton, of Cape Girardeau, for appellant.

Max Sigoloff and Paul L. Hale, both of St. Louis, for respondent.

BENNICK, Commissioner.

This is an action upon a policy of health and accident insurance which was issued on May 1, 1931, by the Monarch Accident Insurance Company, Springfield, Mass., to plaintiff, William L. Limbaugh, of Cape Girardeau, Mo. At some time subsequent to the issuance of the policy, the issuing company was absorbed by defendant, Monarch Life Insurance Company, Springfield, Mass., which now defends the case upon the theory that it has assumed any and all liability of the original company under the policy.

So far as the accident provisions of the policy are concerned, it purported to insure plaintiff in the principal sum of $10,000 against the results of bodily injuries sustained while the policy was in force and effect and caused directly and without other contributing cause by accidental means, subject to the further provision expressed therein that for each full year the policy had been maintained continuously in force the principal indemnities provided for should be increased 10 per cent. of the original amount stated, but in no event to more than 50 per cent. of such original amount.

For death, or for certain forms of dismemberment or loss of sight, the entire principal sum of the policy was made payable. This case involves the loss of plaintiff's left foot, for which type of loss the policy provided that one-half of the principal sum, or $5,000 should be paid. The policy also contained a weekly indemnity provision requiring it to pay indemnity to the insured at the rate of $35 a week to the date of death or dismemberment, such period in this case covering two days, and consequently entitling plaintiff to the further sum of $10, if he is entitled to recover at all. So it appears that the measure of defendant's liability under the policy is the sum of $5,510; the policy having been in force for more than one year at the time of the accident on June 14, 1932; and that, incidentally, is the theory upon which plaintiff proceeds, giving defendant credit for the sum of $3,000 paid him on October 1, 1932, in purported settlement of defendant's entire liability to plaintiff under the policy, and praying for judgment against defendant in the sum of $2,510, with interest.

There was a further prayer in the petition for the statutory penalty arising by way of vexatious refusal to pay, but no such penalty was allowed by the jury, and the question of vexatious refusal is therefore not involved on this appeal.

Plaintiff himself was a soliciting agent for defendant operating in the Cape Girardeau territory under the supervision of Mr. Frank H. Philpott, defendant's general agent, whose office was maintained in the city of St. Louis. According to the usual custom, plaintiff made application for the insurance on one of the company's blank forms, and then forwarded the same to Philpott, by whom, in turn, it was transmitted from the St. Louis office to the home office of the company in Springfield, Mass., where, following Philpott's recommendation, the application was approved and the policy issued. Plaintiff testified that the policy was delivered to him from Philpott's St. Louis office, as was the usual procedure in such matters, while Philpott's testimony was that the policy was sent through the mail direct from the home office to plaintiff in Cape Girardeau. The importance of the point arises, as we shall presently show, upon defendant's insistence that the policy was a Massachusetts rather than a Missouri contract, and that consequently our local misrepresentation statute (section 5732, R. S. 1929, Mo. St. Ann. § 5732, p. 4373) is without application in the case as serving to avoid the effect of certain alleged misrepresentations contained in the application and relied upon by defendant to defeat plaintiff's recovery on the policy as having been material to the risk, though not of a character to have contributed to the contingency or event upon the happening of which the policy became payable.

Plaintiff paid the premium on his policy to Philpott in St. Louis, and Philpott, in the regular course of his duty as defendant's general agent, thereafter remitted for plaintiff's premium, as well as for all other premiums collected, to the home office in Massachusetts. He, of course, possessed no authority to approve applications or to issue policies; the power over such matters being vested solely in the secretary and other officers of the company who were stationed at its home office.

On June 14, 1932, while out hunting with a party of friends in the vicinity of Cape Girardeau, plaintiff sustained a gunshot wound in his left foot which necessitated the amputation of the foot on the following day. The loss of the foot was a conceded fact, with no question raised at the trial about the accident having happened under circumstances which served to bring it within the coverage of the policy, and so, as we have already pointed out, defendant's obligation to plaintiff was in a liquidated sum fixed by the terms and provisions of the policy, if it had no defense against his claim.

Plaintiff remained in the hospital until July 30, 1932, combating a severe infection that had developed; and, in fact, he was still under his doctor's care at the time of the trial of the case in July, 1934. In the course of his hospitalization he underwent five operations and received some twenty intravenous glucose feedings and eight blood transfusions, all of which, together with the shock of the accident and the worry over loss of earnings over a long period of time, brought him to the verge of a complete nervous breakdown, and played such havoc with his mental and physical powers that it would appear to have been extremely doubtful if he was competent to act freely and independently in the matter of contracting with defendant in the following October in regard to the release and discharge of its obligations to him for a consideration less than the liquidated sum fixed by the policy. Indeed, the question of his mental capacity to have given such a release was a very live issue of fact at the trial below, though it happens that the turn taken in the case has removed any such issue from consideration on this appeal, and has left the case to be decided upon pure questions of law arising upon conceded or undisputed facts.

On August 5, 1932, plaintiff made preliminary proof of claim with defendant; final proof being made on September 6th. Thereafter he carried on certain correspondence with representatives of defendant regarding the delay in the payment of his claim, and on September 30, 1932, two adjusters, representing not only defendant but also all the other companies with which plaintiff had accident policies, came to Cape Girardeau, and after a stormy session which lasted until 2 o'clock the following morning, and in the course of which plaintiff threatened suicide and displayed almost a total absence of self-control, entered into a purported settlement and compromise with plaintiff on the basis of 60 cents on the dollar, which, in defendant's case, required the payment to plaintiff of the sum of $3,000. The settlement with all companies involved the payment to plaintiff of $12,900, which meant that his insurance holdings with all companies aggregated indemnity prima facie due him in the amount of $21,500 for the particular loss he had sustained. As a matter of fact, it was largely because of plaintiff's alleged misrepresentations in his application regarding the amount of health and accident insurance he was carrying in other companies that his claim against defendant was and still is resisted by the company.

What purported to be a release given in full satisfaction and final settlement of his claim against defendant was executed by plaintiff, acknowledging the receipt of the sum of $3,000 from defendant; and the policy in suit was thereupon surrendered to defendant, with plaintiff's surrender of the same evidenced over his signature appearing on the back thereof. So matters stood until May 3, 1933, when the present action was filed to recover the balance of $2,510, with interest, alleged still to be due plaintiff under his policy, notwithstanding the execution of the release for which it was contended there had been no consideration; the amount of defendant's obligation to plaintiff under its policy having been a liquidated and fixed sum.

As is perhaps true in all of such cases, the policy recited that it was issued in consideration of the statements made in the application, a copy of which was attached to and made a part of the contract. Among the statements so made by plaintiff and now relied upon by defendant as misrepresentations regarding matters material to the acceptance of the risk were statements that plaintiff's average weekly earnings from his occupation as an insurance salesman exceeded the gross...