Mutual Benefit Health and Accident Association, a Corp. v. Ferrell

• Decision Date: 04 December 1933
• Docket Number: Civil 3316
• Parties: MUTUAL BENEFIT HEALTH AND ACCIDENT ASSOCIATION, a Corporation, Appellant, v. BENJAMIN R. FERRELL, Appellee
• Court: Arizona Supreme Court

27 P.2d 519

42 Ariz. 477

MUTUAL BENEFIT HEALTH AND ACCIDENT ASSOCIATION, a Corporation, Appellant, v. BENJAMIN R. FERRELL, Appellee

Civil No. 3316

Supreme Court of Arizona

December 4, 1933

APPEAL from a judgment of the Superior Court of the County of Maricopa. J. C. Niles, Judge. Judgment reversed and case remanded for a new trial.

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

Mr. M L. Ollerton and Mr. A. David Latham, for Appellee.

OPINION

LOCKWOOD, J.

Benjamin R. Ferrell, hereinafter called plaintiff, brought suit against Mutual Benefit Health and Accident Association, a corporation, hereinafter called defendant, to recover upon a certain policy for illness indemnity issued to plaintiff by defendant. The case was tried to a jury, which returned a verdict in favor of plaintiff in the sum of $2,942, and after the usual motion for new trial was denied, this appeal was taken.

The material facts of the case, placing an interpretation on the evidence most favorable to plaintiff, as we must under the verdict of the jury and our familiar rule, may be stated as follows: On the fifth day of July, 1929, defendant insured plaintiff against loss of time on account of disease, subject to the provisions and limitations of such policy. The premium, after the first installment, was to be paid quarterly in advance beginning on the first day of November, 1929. Shortly after taking out the policy, plaintiff had some slight illness, which never became serious enough to cause him to make a claim for indemnity, and had a conversation with Earl B. Brink, who was the resident manager of defendant, in which he complained of not being well, and asked Brink's advice as to what physician he should consult, whereupon Brink suggested Dr. E. L. Hicks, saying "he was our doctor." Plaintiff thereupon consulted Dr. Hicks in regard to such illness, paying him therefor. During the latter part of 1929, plaintiff again became ill, and under the terms of his policy was entitled to and received certain indemnity therefor. After a short treatment by Dr. Hicks, to whom he went without any further suggestion by Brink or anyone else, he returned to work apparently perfectly well, but some six weeks later became ill again. He again called Dr. Hicks, who treated plaintiff at his own home, visiting him there on various occasions, until about the 24th of February, at which time he was taken, at the advice of Hicks, to a certain private sanitarium, where he remained and was attended by Hicks until the middle of April. Shortly before that date, Hicks told him in substance that he had been greatly run down and on the verge of tuberculosis, but that in thirty days he would be well enough to return to work, and on April 15th Hicks made a written report to defendant as plaintiff's attending physician to the effect that with care he could go to work again in a couple of months. He also stated therein that plaintiff's respiration was weak, but that no tubercle bacilli had been found. On the 15th of April, and while plaintiff was in the sanitarium, he was visited by Brink. The latter told him Dr. Hicks had made a report to the company, and that his disability was about over, and, after some discussion, plaintiff executed a certain document which reads as follows:

"Received of the Mutual Benefit Health & Accident Association, of Omaha, Nebraska, this day the sum of Five Hundred and No/100 Dollars ($500.00) in full settlement of any and all claims which have arisen or which may arise against said Association under Policy No. 12D-152128 issued to me by said Association on or about July 5, 1929 as well as any and all renewals thereof at any time issued.

"In consideration of the payment to me of the sum hereinbefore mentioned, I do hereby release and relinquish to said Mutual Benefit Health & Accident Association all my rights, title, claim, interest and demand, accrued or accruing, in and to said policy No. 12D-152128, and any and all renewals thereof, and by this act release, relinquish and discharge said Association from any and all liability of whatever kind or nature, if any, that now exists, or may hereafter exist, for or on account of the disability sustained or commencing about Jan. 30, 1930.

"It is expressly understood and agreed that the said Association has never, at any time, admitted any liability under said policy, or any obligation to pay any amount whatsoever for or on account of said disability, but has at all times denied, and at the time of making this compromise settlement and payment still denies any liability for said disability and the right of anyone to recover on this policy therefor.

"It is further understood and agreed, and I hereby expressly state that my knowledge of the facts concerning the claim and the conclusion reached by me in the acceptance of said sum hereinbefore mentioned has been derived separately and apart from any person or persons connected with or representing said Association, and that I have not been influenced in my action by any such person or persons.

"It is further understood and agreed that the payment to me of the above specified sum by the said Mutual Benefit Health & Accident Association, and the acceptance of said sum by me, is done in and as a compromise, and that the same is and forever after shall be a bar to any suit at law or otherwise for anything whatsoever growing out of said policy or of any renewal thereof.

"Dated at Phoenix, Arizona, this 15 day of Apr. 1930.

"[Signed] BENJAMIN R. FERRELL [Seal]

"Witnesses: BEULAH V. FERRELL,

"E. B. BRINK," -- and the $500 was paid to him. Plaintiff admitted signing the release, but stated he did so at the request of Brink and because the latter assured him it was merely for his (Brink's) protection, and that it would not cancel the policy or be a settlement in full, but merely up to the time it was estimated he could return to work. He stated that he did not read, or attempt to read, the release when it was handed him by Brink for signature, giving as his only excuse for not doing so that he relied on Brink's representations. A few days after that plaintiff left the sanitarium and went to his homestead near Buckeye, where he remained a short time, and then in company with his family went to New Mexico where he stayed until the last of October, then returning to his homestead. He remained there until about the 1st of December, when he went to the Veterans' Bureau at Albuquerque for examination, and was there informed by the physicians that he had been for some time afflicted with pulmonary tuberculosis, which was his first definite knowledge of that fact. Thereafter he continued with his brother by automobile to the northern part of New York, remaining there in his brother's home in the neighborhood of Saranac Lake until April, 1931, when he returned to his homestead near Buckeye. He stayed there until July, 1931, when he went to the Veterans' Hospital at Fort Whipple, being in the hospital until the 1st of March, 1932, when he again returned to his homestead. During all the time from April 15, 1930, up to the filing of the action, he was totally disabled from pursuing his usual avocations by reason of his illness, and spent his time either traveling about the country, as has been stated, or resting either within or without his residence at the time, as advised by his physicians. He was not visited regularly during this time by any physician, but did repeatedly go to the office of some physician for consultation, except that, while he was at Whipple Hospital from the twelfth day of July, 1931, to the fifth day of February, 1932, he was admittedly confined continuously within doors, and required and received regular visits therein from a physician.

He had paid his insurance premiums as provided by the contract on November 1, 1929, and February 1, 1930, the next premium being due on May 1, 1930. Before he left Phoenix in April, 1930, he arranged with one G. M. Smith to pay the premiums due on May 1st. In the latter part of April Smith called at the office of the defendant in Phoenix to pay the premium for Ferrell and two premiums on certain policies for his own children. The money was paid to and accepted by someone in the office and a receipt duly issued therefor. Later on, and before plaintiff's next premium was due, Smith tendered payment thereof to Brink, but was told that the tender would not be accepted, and that the premium already paid as of May 1st would be returned to Ferrell as soon as they could discover his address. After some discussion, it was suggested by Brink that, since Smith had paid the May 1st premium, he should accept its return and apply the money on a policy of his own, which was done. Plaintiff made no claim for further indemnity until the spring of 1932, when he interviewed Hicks, apparently intending to use him as a witness. It was then about noon, and Hicks told him that he had a luncheon engagement with Brink, but would talk to him the next day after he had talked with Brink, and, when plaintiff returned the next day, informed him in substance that he had better accept the settlement offerd by Brink, for he would get no more.

This action was filed April 7, 1932, and plaintiff, after setting up the execution of the policy above referred to, alleged that he had become totally disabled so as to be continuously confined within doors, and had required regular visits by a physician ever since the third day of January, 1930, up to the time of the filing of the action. Defendant answered admitting the execution of the policy, but pleading the release above set forth. Plaintiff replied, stating that the release was signed by him on the representation of Hicks, whom it was alleged was the physician and medical...