Mutual Benefit Health & Accident Association v. Neale

• Decision Date: 01 June 1934
• Docket Number: Civil 3369
• Citation: 43 Ariz. 532,33 P.2d 604
• Parties: MUTUAL BENEFIT HEALTH AND ACCIDENT ASSOCIATION, a Corporation, Appellant, v. HAROLD NEALE, Appellee
• Court: Arizona Supreme Court

33 P.2d 604

43 Ariz. 532

MUTUAL BENEFIT HEALTH AND ACCIDENT ASSOCIATION, a Corporation, Appellant, v. HAROLD NEALE, Appellee

Civil No. 3369

Supreme Court of Arizona

June 1, 1934

APPEAL from a judgment of the Superior Court of the County of Maricopa. J. C. Niles, Judge. Judgment affirmed.

Mr. G W. Shute and Mr. Charles Bernstein, for Appellant.

Messrs Ellinwood & Ross, Mr. Norman S. Hull and Mr. Joseph S Jenckes, Jr., for Appellee.

OPINION

LOCKWOOD, J.

This is an appeal by Mutual Benefit Health and Accident Association, a corporation, hereinafter called defendant, from a judgment in favor of Harold Neale, hereinafter called plaintiff, on an accident and health insurance policy issued by defendant to plaintiff. Construing the evidence in the manner most favorable to plaintiff's contention, as under the verdict of the jury we must, the record shows the material facts to be as follows:

On September 11, 1930, defendant issued to plaintiff a policy of accident and health insurance, which reads in part as follows:

"Mutual Benefit Health and Accident Association, Omaha. (Herein called Association)

"Insuring Clause:

"Does Hereby Insure Harold Neale (herein called the Insured) of City of Phoenix, State of Arizona against loss of life, limb, sight or time, resulting directly and independently of all other causes, from bodily injuries sustained thru purely Accidental Means (Suicide, sane or insane, is not covered), and against loss of time on account of disease contracted during the term of this Policy, respectively, subject, however, to all the provisions and limitations hereinafter contained. . . .

"Waiver of Premium.

"When claim for permanent total disability of the Insured, due to bodily injuries or sickness covered by this policy, has been filed and approved while this policy is in force, there will be no further premium payable, but the Insured will draw benefits as provided in the policy.

"[Seal.]

"Series 302.

"Part D. -- Total Accident Disability One Hundred Dollars Per Month for Life.

"If such injuries as described in the Insuring Clause, do not result in any of the above mentioned specific losses but shall wholly and continuously disable the Insured for one day or more, and so long as the Insured lives and suffers said total loss of time, the Association will pay a monthly indemnity at the rate of One Hundred ($100.00) Dollars. . . .

"Part K. -- Additional Benefits If Confined to Hospital.

"If the Insured on account of any accidental injury or disease covered by this policy shall enter a hospital and be necessarily and continuously confined therein solely on account of said injury or disease, the Association will reimburse him for his actual hospital expense, but not exceeding One Hundred Dollars ($100.00) per month or a proportionate amount for any fractional part of a month. This benefit is in addition to any other monthly benefits and shall be payable for a period not exceeding three months."

At this time plaintiff was a meat cutter working at the Linsenmeyer Post Office Market in the city of Phoenix. On October 15, 1930, he was engaged in the lifting of a 206-pound quarter of beef, when it fell from a wall scale and struck him across the back and left shoulder. His first impression of injury was a numbness in his back, and he went to his home shortly thereafter, but was unable to eat or sleep. He returned to the market the following day, but finding that he was wholly unable to perform his duties he consulted a physician, who immediately sent him to the hospital, where he remained until November 24th. On November 14th, and while in the hospital, he made formal application to defendant for disability payments under his policy, and about the same time made claim to the Arizona Industrial Commission for compensation under the Workmen's Compensation Law (Rev. Code 1928, § 1391 et seq.). Defendant failed to act on the claim for some time, but, after being requested by the Industrial Commission to decide the matter, on December 26th began paying disability benefits under clauses D and K of the policy. The Industrial Commission made payments to plaintiff until the middle of February, 1931, when they were temporarily discontinued, but resumed later. After plaintiff's release from the hospital on November 24th he did not improve, and was placed in a plaster cast. In the month of January, 1931, Dr. R. B. Rainey was called in by Dr. Charles W. Sult, plaintiff's first physician, for consultation, and on March 27, 1931, he was retained as his regular physician by plaintiff. At that time the latter had lost nearly 100 pounds in weight and suffered a partial paralysis of the bladder, rectum and lower extremities. He was immediately returned to the hospital, where he remained from March 28th until October, 1931. During this time he remained almost completely paralyzed, and was so weak that part of the time he was unable to even hold a drinking tube without assistance, and lost in weight until he was reduced from a normal of 190 pounds to a little over 70. He was irrational and troubled with hallucinations and had to be forcibly fed and administered opiates, and received no less than seven blood transfusions. Dr. Dr. Rainey called Dr. A. M. Tuthill in consultation, and their final diagnosis was serous meningitis, occasioned by an injury or irritation of the spinal cord. In the opinion of Dr. Rainey the condition was due solely to the injury received by plaintiff in the accident above described, and no other medical expert assigned any other cause therefor. To remove the pressure from plaintiff's spinal cord, Dr. Rainey performed three spinal operations; the first on April 7th, the second April 15th, and the third May 29th. After the last operation plaintiff began to improve, and at the time of trial was able to get around on crutches, his weight had increased to 150 pounds, and he was almost free from pain, while the paralysis had to a great extent disappeared. The operation necessitated the removal of several inches of the bone of the spinal column, and his spinal cord for that distance is now covered only by skin and muscle, and in the opinion of the medical witnesses he will never be able to do any heavy physical labor, although in two or three years he might be able to do light office work, while his bowels and bladder will never fully recover their normal functions.

Immediately after his discharge from the hospital he went with his wife and nurse to California so that he might visit his sister, Mrs. May Wagner, and there recuperate. Defendant failing, after demand, to make further payments on the policy, he filed suit on April 27, 1932, to recover under clause D thereof in the amount of $100 per month for the time his injury had lasted, this time being by supplemental complaint on December 19, 1932, extended to and including the month of November of that year.

Defendant's first amended answer on which the case was tried admitted the issuance of the insurance policy, but denied all the other material allegations of the complaint, and alleged that about the 1st of April, 1931, defendant discovered that plaintiff's injury was not caused by the accident above set forth, but by a spinal tumor existing long prior to the taking of the insurance policy, and further that on the 27th day of May, 1930, the defendant offered the sum of $900 as a compromise and settlement in full of any liability under said policy, which was accepted and retained by plaintiff.

Plaintiff replied, denying the execution of any settlement or release of the policy by him, or the receipt of any money therefor, and claimed that at the time of the alleged settlement he was ill and mentally incapable of transacting any business whatever, and that if a release was executed in his name at that time he had no knowledge or recollection of ever having signed the same or received any money whatever, and that if his signature was affixed to a release, it was fraudulently procured by defendant, who had full knowledge of his condition. He also maintained if the $900 claimed to have been paid by defendant in settlement of the policy was paid to anyone, it was not done with plaintiff's knowledge, approval or consent, and offered if said sum was paid to anyone and expended in his behalf, to credit such amount on any judgment which he might receive. The case was tried to a jury, which returned a verdict in favor of plaintiff in the sum of $1,400.

There are six assignments of error which we will consider in such manner as seems advisable, in accordance with the legal proposition raised thereby. The first question is whether the evidence justified the jury in finding that there was no valid release of policy made by plaintiff. In order to determine this we will have to review at some length the testimony in regard to the alleged release of May 27th. Defendant offered in evidence a formal release of the policy, complete in form, appearing to have been signed by Harold Neale and witnessed by E. B. Brink, who was at the time defendant's local agent in Phoenix, and a check for $900 payable to plaintiff, which stated on its face it was in full settlement of all claims under the policy. This check had indorsed upon its back the names of Harold Neale, John G Neale and E. G. Brink, and was cashed by John G. Neale. On their faces, these documents were a complete defense to the action. Plaintiff claimed, however, that they were not executed with his knowledge and consent, and offered testimony to the following effect: On the 27th day of May, he was flat on his back in bed, with his spine draining, and so weak and emaciated that he was unable to hold his own drinking tube. He had recently been given a blood transfusion and had been taking opiates of...