Pilot Life Ins. Co. v. Wade

• Decision Date: 22 April 1929
• Docket Number: 27895
• Court: Mississippi Supreme Court
• Parties: PILOT LIFE INS. CO. v. WADE. [*]

121 So. 844

153 Miss. 874

PILOT LIFE INS. CO. v. WADE. ^[*]

No. 27895

Supreme Court of Mississippi

April 22, 1929

Division A

1 INSURANCE. Beneficiary cannot overturn release executed to insurer, where not alleging she was ignorant of falsity of representations inducing release, or that she endeavored to ascertain truth.

Beneficiary under life insurance policy cannot overturn release executed by her to insurer on ground of false representations by insurer's agent regarding cause of insured's death, where she did not allege that she was ignorant of falsity of representations, or that she endeavored to ascertain truth or falsity of statements before accepting insurer's offer of settlement, or that she knew doctor stating same cause of death was a physician and based his opinion on personal or communicated knowledge of insured's physical condition.

2 FRAUD. False representation, to constitute fraud, must justify reasonably prudent person in acting thereon.

In order for false representation to constitute fraud, it must have been made under such circumstances and be of such nature that reasonably prudent person would act thereon.

3 INSURANCE. Bill not showing when complainant ascertained falsity of defendant's agent's statements inducing settlement of loss under life policy did not show she ratified settlement by delay in disaffirming.

Where it did not appear from bill when complainant ascertained falsity of statements made by defendant insurer's agent inducing her to make settlement of loss under life policy she could not be held on face of bill to have ratified settlement with insurance company by delay in disaffirming it.

4. INSURANCE. Complainant seeking to overturn release on ground of fraud need not offer to return money paid her.

Where beneficiary under life insurance policy sought to overturn release executed by her to insurance company on ground that it was fraudulently obtained, it was not necessary for her to offer to return money paid her in order to maintain suit.

HON. T. P. DALE, Chancellor.

APPEAL from chancery court of Forrest county., HON. T. P. DALE, Chancellor.

Suit by Ruthie E. Wade against the Pilot Life Insurance Company. From a decree overruling a demurrer to the bill of complaint, defendant appeals. Reversed and remanded.

Reversed and remanded.

D. E. & C. W. Sullivan, for appellant.

The attempt to charge fraud is wholly insufficient and does not entitle complainant to the relief sought. The attempt to charge fraud consists, in part, in the statement of the agents that deceased was not drowned but died of heart failure and that a certain doctor had said so. Complainant and her sister-in-law and her father were in a position to know as much or more about the truth of this statement than the agents were. They did not have to believe this statement. They were free to reject it, and they had an abundance of time to investigate the matter without prejudice to their right to investigate it, and to bring a suit for the full amount of the policy if they found the statement to be untrue or doubtful. Another fragment of the attempt to charge fraud is the allegation that they were ignorant in such matters, and were suffering from mental anguish and were overreached by the agents. They could have taken time to consider the proposition and consult with their friends if they had desired to do so. The law presumes that they all were of sound mind and possessed that common sense attributable to the average person. The bill does not charge that they were mentally unsound and therefore incapacitated to attend to the matter in hand. The further attempt to charge fraud is found in the allegation that the agents were in a great hurry and that it was immediately necessary to settle the claim as one of the agents was compelled to leave in a few minutes and when the complainant and her friends requested an opportunity to consult friends, they were told they merely desired to get out and talk to a lawyer and that this was unnecessary, and if they desired to settle they must do so at once. The complainant and her friends did not have to pay any attention to these statements if they did not want to and they were perfectly free to do as they pleased, and consult any person they wanted to consult.

If the bill does sufficiently charge fraud, still complainant is not entitled to the relief prayed for and the bill is subject to demurrer because the complainant does not offer to do equity by tendering the two thousand five hundred dollars, which she received under an agreement which she now repudiates. She must restore the status quo. She cannot retain the money received and sue for the balance due. She should place the defendant where it stood before compromise was made and sue for the entire sum of five thousand dollars and give the defendant an opportunity to make good its defense to the entire claim. Therefore, an answer to that part of the bill charging fraud is not necessary because complainant is not entitled to relief without making the tender. See Griffith's Miss. Chan. Prac., secs. 303 and 304, and authorities there cited; 4 R. C. L. 511.

Currie, Stevens & Currie, for appellee.

We submit that counsel for appellant can find no basis in the allegations of the bill for their contention that appellee compromised a claim of five thousand dollars for fifty per cent of the amount. The bill recites in some detail the alleged fraud of the agents of the insurance company, but probably the most essential and striking averments of material fraud are set forth in the statement of facts of counsel for appellant. It there appears that it is alleged in the bill that the agents...