Sheppard v. Travelers Protective Ass'n of America

• Decision Date: 09 January 1939
• Citation: 124 S.W.2d 528,233 Mo.App. 602
• Parties: ROSA CORA SHEPPARD, RESPONDENT, v. TRAVELERS PROTECTIVE ASSOCIATION, APPELLANT
• Court: Kansas Court of Appeals

124 S.W.2d 528

233 Mo.App. 602

ROSA CORA SHEPPARD, RESPONDENT, v. TRAVELERS PROTECTIVE ASSOCIATION, APPELLANT

Court of Appeals of Missouri, Kansas City

January 9, 1939

Appeal from Buchanan Circuit Court.--Hon. Sam Wilcox, Judge.

REVERSED.

Judgment reversed.

Brown Douglas & Brown for appellant.

(1) (a) The release executed by plaintiff on December 8, 1928 constitutes a valid defense, the payment being adequate consideration for the settlement then effected. There was a bona-fide dispute as to the cause of death of plaintiff's husband, and defendant's position was taken, not in reliance upon inference or imagination, but upon established facts. Sheppard v. Travelers Protective Association of America (Mo. App.), 104 S.W.2d 784; Wood v. Kansas City Home Telephone Co. et al. (Mo.), 123 S.W. 6; Zinke v. Knights of the Maccabees of the World (Mo.), 205 S.W. 1; Painter v. Prudential Insurance Co. of America (Mo. App.), 71 S.W.2d 483; Frey v John Hancock Mutual Life Ins. Co. (Mo. App.), 175 S.W. 211; State ex rel. Order of United Commercial Travelers of America v. Shain et al. (Mo.), 98 S.W.2d 597; Order of United Commercial Travelers of America v. Sheppard, U. S. District Court, Western District of Missouri (March Term, 1938). (b) Execution of this release caused the defendant to make no autopsy, to make no effort to perpetuate the testimony of witnesses conversant with facts pertinent to the cause of death, and to make no effort to obtain further pertinent testimony than available. The consequent change in defendant's position and the inconvenience and disadvantage to which it has been put thereby, constitute in themselves further valid consideration for the settlement. Duvall v. Duncan (Mo.), 111 S.W.2d 89, l. c. 92; Nelson v. Diffenderrffer (Mo. App.), 163 S.W. 271. (c) For more than six years after the execution of the release, plaintiff made no charge of bad faith on the part of the defendant, and made no effort to disavow the settlement, and release. By her conduct she has ratified the release and settlement, and is estopped to deny the validity of the same at this time. Wood v. Kansas City Home Telephone Co. et al. (Mo.), 123 S.W. 6, l. c. 14; Coburn v. Metropolitan Life Ins. Co. (Mo. App.), 91 S.W.2d 157; Whitney v. Fox, 17 U.S. 713, 41 L.Ed. 1145; Homan et al. v. Gulf Refining Co. of Louisiana et al., 76 F.2d 94; Vance v. Chicago Portrait Co., 19 F.2d 981. The alleged statements of adjuster had nothing to do with the facts upon which defendant relied for its defense, and could be no indication, therefore, of defendant's belief or disbelief in facts to which such supposed statements were unrelated. Christianson v. Metropolitan Life Ins. Co. (Mo. App.), 102 S.W.2d 662. (2) The court erred in giving plaintiff's instruction numbered one, in that said instruction improperly narrowed the scope of defendant's defense, and was in conflict with other instructions given in the case. Said instruction was also erroneous in that it failed to make any allowance for the payment made directly to Charles N. Sheppard, in settlement of the indemnity claim made by him on October 23, 1928, for disability resulting from the accident the preceding September 25, defendant's constitution providing that the amount of any death benefit should be reduced by the amount of such weekly indemnity payment. Christianson v. Metropolitan Life Ins. Co. (Mo. App.), 1 02 S.W.2d 662, l. c. 684. (3) The verdict was excessive and against the law under the evidence, in that there was no deduction from the full death benefit allowable under defendant's constitution, for the payment made directly to Sheppard in settlement of his indemnity claim for disability resulting from the same accident.

Randolph & Randolph and Nile L. Vermillion for respondent.

(1) The law of this case is found in the opinion on the previous appeal, inasmuch as the issues and facts are substantially the same, and the same procedure was followed. National Match Co. v. Empire Storage and Ice Co. (Mo. App.), 58 S.W.2d 797, 798. (2) There was sufficient evidence to justify the jury in finding that the adjuster in effecting the settlement was not acting in good faith or with the honest belief that there was no liability. Sheppard v. T. P. A., 104 S.W.2d 784, 787. The release was, therefore, without consideration and was not binding. Sappington v. Central Mutual Insurance Ass'n, 77 S.W.2d 140, 144. (3) Plaintiff's instruction No. 1, as it now reads, was approved by this court on the previous appeal and covers the same issues of facts. Sheppard v. T. P. A., 104 S.W.2d 784, 788. (4) Van Wormer was defendant's agent for the purpose of effecting settlement made. In any event, defendant fully ratified the acts of Van Wormer. Consequently, anything said or done by Van Wormer bound the defendant as principal. (5) The doctrine of estoppel has no application to the facts in this case. Grafeman Dairy v. Northwestern Bank, 315 Mo. 849, 288 S.W. 359; Williamson v. Lieberman, 35 S.W.2d 533 (Mo. Sup.); State ex rel. v. Sevier, 73 S.W.2d 361 (Mo. Sup.); National Match Co. v. Empire Storage & Ice Co., 58 S.W.2d 797, 798 (Mo. App.); Osburn v. Court of Honor, 152 Mo.App. 652, 137 S.W. 87. (6) It is admitted that the verdict of the jury, through an oversight, is excessive in the amount of $ 85.70. This error can be corrected by a remittitur, which respondent tenders hereby in any appropriate sum. (7) In an action for the balance of the proceeds due under a policy of life insurance, it is not necessary for the plaintiff to return the sum already paid or to proceed to set aside the release before bringing suit for the balance due. Sappington v. Central Mutual Insurance Ass'n., supra; Stricker v. Metropolitan Life Insurance Co., 237 S.W. 894 (Mo. App.); Dodt v. Prudential Insurance Company, 186 Mo.App. 168, 171 S.W. 655; Crowder v. Continental Casualty Co., 115 Mo.App. 535, 91 S.W. 1016; Goodson v. Masonic Ass'n, 91 Mo.App. 339. (8) The accident was the cause of insured's death because it caused the fatal diseases and was the thing which created the effect which produced the death. In such circumstances, the accident is said to be the cause, and the diseases are merely results, not contributing causes. Wheeler v. Fidelity and Casualty Co., 298 Mo. 619, 641; Campbell v. Aetna Life Insurance Co., 283 Mo. 63, 70; Order of United Commercial Travelers v. Edwards, 51 F.2d 187, 189; Jackson v. Order of U. C. T., 89 S.W.2d 536 (Mo. App.).

SPERRY, C. Campbell, C., concurs. Shain, P. J., and Bland, J., concur; Kemp, J., not sitting because not member of the court at time cause was argued and submitted.

OPINION

SPERRY, C.

Plaintiff was beneficiary in a policy of accident insurance issued by defendant on the life of plaintiff's husband. The face of the policy was in the amount of $ 5000. Insured died November 2, 1928, and on December 8, 1928, defendant paid plaintiff the sum of $ 995.55 in full settlement of its liability on said policy, and took her final release. Plaintiff instituted this suit on April 5, 1935, claiming the balance of the sum of $ 5000, or the sum of $ 4004.45, plus interest thereon from December 8, 1928. Judgment was for plaintiff. Defendant appealed to this court, which reversed and remanded that judgment. [Sheppard v. Travelers Protective Ass'n of America, 104 S.W.2d 784.] The cause was again tried to a jury, resulting in verdict and judgment, for plaintiff for the full amount sought, including interest. From this judgment defendant appeals.

The petition alleges the insurance contract; that insured met his death by accidental means within the meaning of the policy, while said policy was in force; that the whole face amount of the policy became due and payable; that defendant paid the sum of $ 995.55 on account thereof; and prayed judgment for the balance claimed to be due, with interest.

The answer admits issuance of the policy mentioned in plaintiff's petition, the death of insured, and denies all other allegations of the petition. For further answer it pleaded certain provisions of its constitution and by-laws; that insured's death was due to disease and not to accident; that defendant at all times denied liability on the policy because of the aforesaid pleaded defense; that there existed a bona fide dispute as to defendant's liability and that said dispute was compromised and settled in good faith by defendant paying the sum of $ 995.55 in full settlement of its liability on the policy; that for six years following execution of the release plaintiff made no further claim under the policy and that by reason of plaintiff's apparent acquiescence in said settlement for so long a time defendant had not sought to perpetuate testimony then available but now not available because of death of witnesses, and that by reason of her laches and negligence plaintiff is estopped to deny the validity of the compromise settlement so pleaded.

The chief issue made by the pleadings in this case, as in the former case, was whether the compromise settlement barred any further action on the policy. There was sufficient evidence to go to the jury on the question of defendant's liability unless compromise settlement barred the action. Compromise settlement to avoid litigation is a favorite of the law and furnishes its own consideration. [Wood v Kansas City Home Telephone Company, 223 Mo. 537, 123 S.W. 6.] Where there is a bona fide dispute as to the right of insured to recover on the policy, whether the dispute be as to law or fact, there is sufficient consideration to support a compromise settlement based on payment of an amount less than that called for in the policy. [Yancey v. Central Mutual Insurance Ass'n, 77 S.W.2d 149, l. c. 154.] The burden of proving the invalidity of such a compromise agreement is on the one...