Waldbauer v. Hoosier Cas. Co.

• Court: Michigan Supreme Court
• Writing for the Court: CHANDLER
• Citation: Waldbauer v. Hoosier Cas. Co., 285 Mich. 405, 280 N.W. 807 (Mich. 1938)
• Decision Date: 30 June 1938
• Docket Number: No. 7.,7.
• Parties: WALDBAUER v. HOOSIER CASUALTY CO.

285 Mich. 405

280 N.W. 807

WALDBAUER

v.HOOSIER CASUALTY CO.

No. 7.

Supreme Court of Michigan.

June 30, 1938.

Suit by Blanche P. Waldbauer against the Hoosier Casualty Company to recover for fraud on the part of an adjuster for defendant in securing a settlement and release of defendant's liability on accident policies. Judgment for plaintiff, and defendant appeals.

Judgment reversed.

Appeal from Circuit Court, Bay County; James L. McCormick, judge.

Argued before the Entire Bench.

Clark & Henry, of Bay City, for appellant.

Otto J. Manary, of Bay City, for appellee.

CHANDLER, Justice.

William Waldbauer was killed in an automobile accident on M-15 near Clarkston, Michigan, on July 27, 1931. His widow, plainiff herein, was named as beneficiary in two accident insurance policies which deceased carried with the defendant company known as policies No. C-9113-B and No. A-5331 in the sums of $1,000 and $1,500, respectively. Plaintiff contends that Mr. Ray, an adjustor for the defendant, perpetrated a fraud upon her whereby she was induced to accept $1,000 as full and complete satisfaction of all claims against the company and released the company from any further liability.

Policy No. C-9113-B did not cover indemnity for injuries or death of the insured ‘while under the influence of an intoxicant or narcotic.’ It was conceded in the lower court that deceased had carried a similar policy with the United Insurance Company in the amount of $500 and, under the terms of defendant's contract, defendant was liable only for such portion of the indemnity promised as the said indemnity bore to the total amount of like indemnity in all policies covering such loss, and for the return of such part of the premium paid as shall exceed the pro rata for the indemnity thus determined. Accordingly, in no event could plaintiff have obtained more than $666.66 plus a premium rebate of $10.30 on this policy.

Policy No. A-5331, among other exceptions, provided that it did not cover any loss ‘while said automobile is being operated or manipulated by a person under the influence of intoxicating liquor, or for the transportation of intoxicating liquor for any purpose, or in any amount, or otherwise in a reckless manner.’

On August 1, 1931, plaintiff gave the above mentioned Hoosier policies and two others to a Mr. Brauer, an agent of the defendant company, whom she considered a close friend of her deceased husband, for the purpose of collection. Thereafter, on September 21, 1931, a Mr. Ray came to the home of plaintiff and told her that the policies with the defendant were void because two bottles of beer were found in the car in which plaintiff's husband was riding at the time of his death; that he had five affidavits, which, however, he refused to show to the plaintiff, and finally said, ‘Take a thousand dollars or nothing, and if you take it to court you get beat.’ Plaintiff testified that she then called Mr. Fred Waldbauer who was the administrator of her husband's estate. Mr. Ray repeated the foregoing statements to him, and thereupon, believing the assertions of the adjustor to be true, plaintiff accepted the $1,000 and signed a release.

Mr. Ray testified that he told plaintiff the $1,500 policy was void because of the presence of beer in the car, and he further testified that he believed deceased was under the influence of intoxicants at the time of the accident but he could not prove it, and therefore made an offer to settle both claims at the same time.

The case was submitted to the jury who found for plaintiff, returning a verdict in her favor of $1,176.96 plus interest from November 1, 1931. The lower court denied defendant's motion for a directed verdict, for a judgment non obstante veredicto, and for a new trial. The present appeal followed.

It should be noted that this action is based upon the alleged fraud of defendant's agent in securing a settlement and release, and not upon the policies which by their own terms barred suit thereon if not brought within two years from the time within which proof of loss was required.

It thus appears that plaintiff's counsel lost sight of the theory of the case when in his brief he says, ‘This case was tried on no different theory than any other insurance policy case would be tried, and it was not up to the plaintiff in making her case to negative the fact of beer being in the car, but it was a matter that defendant would have to show if it relied on that to defeat plaintiff's action.’

The doctrine is well established that fraud will not be presumed but must be proved. Robert v. Morrin's Estate, 27 Mich. 306.

‘The burden of proof was upon complainant to establish the misrepresentations and fraud charged against defendant by evidence sufficient to satisfy the court of its truth. This court has held repeatedly that fraud cannot be presumed, but must be established by a preponderance of the evidence; and the burden of proving it is upon the party who complains of it.’ Dorrington v....