Mills v. American Mut. Ass'n

• Decision Date: 26 May 1941
• Docket Number: No. 19930.,19930.
• Citation: 151 S.W.2d 459
• Parties: MILLS v. AMERICAN MUT. ASS'N
• Court: Missouri Court of Appeals

151 S.W.2d 459

MILLS v. AMERICAN MUT. ASS'N

No. 19930.

Kansas City Court of Appeals. Missouri.

May 26, 1941.

Appeal from Circuit Court, Bates County; Charles A. Calvird, Judge.

"Not to be published in State Reports".

Action by Rose V. Mills against the American Mutual Association upon a policy of life insurance issued by the defendant upon the life of D. P. Mills, in which the plaintiff was named as beneficiary. From a judgment for plaintiff, the defendant appeals.

Affirmed.

H. E. Sheppard, of Butler, and Ralph P. Johnson, of Osceola, for appellant.

Hudson & Smith, of Kansas City, and Elmer B. Silvers, of Butler, for respondent.

CAVE, Judge.

This is an action upon a policy of life insurance bearing date of April 13, 1928, issued by American Mutual Association, of Osceola, Missouri, upon the life of D. P. Mills, a resident of Kansas. The plaintiff, Rose V. Mills, was the wife of D. P. Mills, and named as beneficiary in said policy.

Upon trial of the case the jury returned a verdict in favor of plaintiff in the amount of $2,060, for which judgment was entered, and from which defendant prosecutes this appeal.

The face amount of said policy was $2,000, and the petition is in usual form, except it gives credit on account for a $500 payment made by defendant after the death of insured, and prays judgment for the balance of $1,500, with interest from date of death. The answer admitted the issuance of the policy and the death of insured as of March 12, 1934, also the payment of assessments and due proof of death. For defense the answer pled that when D. P. Mills applied for said policy he signed an application which stated and warranted that "he had not had high blood pressure or heart disease, that he was not under the care of a physician and was in normal good health at the time of applying for said insurance." That defendant had information that caused it to believe all of said statements were false and untrue, and that they in fact were false and untrue; that such information came to its knowledge after the death of insured. That because thereof there was a bona fide dispute between plaintiff and defendant and that the claim under the policy was settled and compromised for $500, and plaintiff gave a full release to defendant.

The reply denies the validity of the release because there was no bona fide dispute and, therefore, it was without consideration. The reply also alleged that defendant's agent made certain false and fraudulent representations to the plaintiff and thereby induced her to sign the release, but that issue was not submitted to the jury and there is no need to set out in detail such allegations. There was no attack made on any of the pleadings.

Under "assignment of errors" the defendant complains of the giving and refusal of certain instructions and the refusal to admit certain evidence, but these matters are not urged under "points and authorities" or in the argument and we consider them abandoned.

Under its "points and authorities" the defendant assigns but three grounds of error which can be stated and dealt with under two propositions; (a) that where a settlement and release is shown or admitted then the burden is on the plaintiff to prove the invalidity of the same, and in this case the evidence failed so to show and therefore defendant's demurrers at the close of plaintiff's case and at the close of the whole case should have been sustained; (b) that the evidence shows a bona fide dispute between plaintiff and defendant, and, therefore, a sufficient consideration for the release and the demurrers should have been sustained.

An examination of the record in this case discloses that the principal instructions given for the plaintiff and defendant are not included, but we can gather from the record and briefs that the decisive point is whether the evidence concerning the settlement and release is such that should either of defendant's demurrers have been given.

It is too well settled in this state to admit of argument that, upon the death of an insured, the amount named in the face of the policy becomes liquidated and a settlement for a less amount is no consideration for a release unless a bona fide dispute as to liability exists. Fowler v. Missouri Ass'n, Mo.App., 86 S.W.2d 946; Berry v. Detroit Casualty Co., Mo.App., 300 S. W. 1026; Brizendine v. Central Life Ins. Co., 234 Mo.App. 460, 131 S.W.2d 906; Yancey v. Central Mutual Ass'n, Mo.App., 77 S.W.2d 149.

It is equally true that a mere pretended dispute — a controversy not raised in good faith — will not affect the operation of this rule of law. Vaughn v. Conran, Mo.App., 4 S.W.2d 495; and Brizendine v. Central Life Ins. Co., supra.

With these principals in mind, what is the evidence touching the question of a bona fide dispute in this case?

Defendant directs our attention to the following testimony and relies thereon to support its contention there was a bona fide dispute:

(a) In the application for insurance the insured stated "I have not had * * * heart disease. * * *" There is no dispute about that representation being made at the time the application was signed on April 13, 1928. Then there appears this, as a separate sentence, "Explain fully, if any, Stomach trouble; Goiter, Appendicitis, High blood pressure." There is no "explanation" or answer of any kind to the matter of "High blood pressure" in the application and, therefore, no "representation" as to that was made by insured.

(b) In the proof of death the plaintiff stated that the insured died "from cerebral hemorrhage caused by high blood pressure"; and the certificate of death gave substantially the same reason for death. These papers were signed about March 27, 1934, some six years after the application.

At the time of the purported settlement the defendant also had in its possession certain other information,

(c) A written statement signed by Dr. R. C. Henderson, addressed to defendant and dated April 24, 1934, in which he stated that he had treated D. P. Mills (the insured) numerous times between March, 1922 and Sept., 1931 for "common colds and constipation." He also reported that "my records show that on Nov. 6th. 1923, I examined him and found his B. P. 225/120". This examination was made about 5 years before the making of the application. There is no evidence in the record that any physician examined insured's blood pressure between November, 1923 and April 13, 1928, the date of application. Neither is there any evidence that he had "heart disease" or "high blood pressure" between 1923 and 1928.

(d) Defendant also had in its possession at the time of settlement a report from an investigating agency, the "Retail Credit Company," giving the results of its investigation into the past...