Watkins v. Prudential Ins. Co. of America

• Decision Date: 07 April 1941
• Parties: EDWARDS WATKINS, APPELLANT, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, RESPONDENT
• Court: Kansas Court of Appeals

151 S.W.2d 462

236 Mo.App. 118

EDWARDS WATKINS, APPELLANT, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, RESPONDENT

Court of Appeals of Missouri, Kansas City

April 7, 1941

Appeal from the Circuit Court of Ray County.--Hon. James S. Rooney Judge.

REVERSED AND REMANDED.

Judgment reversed and cause remanded.

William C. Michaels and Albert L. Reeves, Jr. for respondent.

Ralph W. Hyatt, Michaels, Blackmar, Newkirk, Eager & Swanson, and Rogers & Penniston of counsel.

(1) The trial court properly directed a verdict for defendant at the close of plaintiff's case for the following reasons: (a) The evidence affirmatively established that there were fraudulent, material misrepresentations in the application and that on the policy date Andrew Watkins was afflicted with the disease which later caused his death. Agent Wilson's knowledge of the condition of health of Andrew Watkins was not imputable to defendant because (1) plaintiff and Andrew Watkins had express notice that Wilson's authority was limited, and (2) both agent Wilson and the applicant, Andrew Watkins, had equal knowledge of the falsity of the representations contained in the application, and accordingly, there was collusion between them as a matter of law. Sec. 5843, R. S. of Mo., 1939; Kirk v. Metropolitan Life Ins. Co., 336 Mo. 765, 81 S.W.2d 333; Kester v Metropolitan Life Ins. Co., 228 Mo.App. 550, 71 S.W.2d 839; 37 C. J. 455; Gordon v. Royal Neighbors of America (St. Louis, 1936), 90 S.W.2d 198; Emery v. New York Life Ins. Co., 316 Mo. 1292, 295 S.W. 571; Zeilman v. Central Mutual Association (Mo. App.), 22 S.W.2d 88; McGee v. Capital Mutual Association (Mo. App.), 116 S.W.2d 204; Brennecke v. Ganahl Lumber Co., 329 Mo. 341, 44 S.W.2d 627; Muller v. Mutual Benefit Association (Mo. App.), 68 S.W.2d 873, 882; Mallen v. National Life Association, 168 Mo.App. 503, 153 S.W. 1065; Woodson v. John Hancock Mutual Life Ins. Co. (Mo. App.), 84 S.W.2d 390; Longo v. John Hancock Mutual Life Ins. Co. (Mo. App.), 142 S.W.2d 871; Sec. 920, R. S. Mo., 1939; Templeton v. Standard Life Ins. Co. (Mo. App.), 140 S.W.2d 726; McKinney v. Martin-Holloran Co., 198 Mo.App. 386, 200 S.W. 114; Sissel v. Railroad Co., 214 Mo. 515, 113 S.W. (1st) 1104; Hudson v. Railroad Co., 101 Mo. 13, 14 S.W. (1st) 19; Peper Automobile Company v. Trust Co. (Mo. App.), 187 S.W. 109, 113; Gilmore v. Modern Brotherhood, 186 Mo.App. 445, 171 S.W. 629, 632; Skirvin v. McKamey (Mo. App.), 237 S.W. 858, 859; Klein v. U. S. Casualty Co. (Mo. App.), 295 S.W. 833. (b) With the tender and acceptance of the amount, with interest, of the premiums paid upon the policy, plaintiff and defendant effected a valid accord and satisfaction, or, in the alternative, defendant's liquidated liability was paid in full. Goldberg v. Hercules Life Ins. Co. (Mo. App.), 131 S.W.2d 726; Zinke v. Knights of the Maccabees, 275 Mo. 660, 205 S.W. 1; Fowler v. Missouri Mutual Association (Mo. App.), 86 S.W.2d 946. (c) The policy was payable to the estate of Andrew Watkins, and plaintiff, who is neither the executor nor administrator, has no capacity to maintain this action. Bradshaw v. Metropolitan Life Ins. Co. (Mo. App.), 110 S.W.2d 834; Plummer v. Metropolitan Life Ins. Co., 229 Mo.App. 638, 81 S.W.2d 453; Hood v. Prudential Ins. Co., 227 Mo.App. 689, 56 S.W.2d 1066; Raker v. Service Life Ins. Co. (Mo. App.), 49 S.W.2d 285; Longley v. Metropolitan Life Ins. Co. (Mo. App.), 48 S.W.2d 74.

Wm. T. Thompson for appellant.

(1) The court erred in sustaining the demurrer to plaintiff's evidence and in directing a verdict for the defendant. (a) Because knowledge of the agent is knowledge of the principal. Longo v. John Hancock Mutual Life Ins. Co., 142 S.W.2d 871; Sappington v. Central Mutual Life Ins. Association, 229 Mo.App. 222, 77 S.W.2d 140; Yancey v. Central Mutual Ins. Association, 77 S.W.2d 149. (b) Because the plaintiff never knew what was inserted in the application by defendant's agent. Templeton v. Standard Life Ins. Co., 140 S.W.2d 726; Longo v. John Hancock Mutual Life Ins. Co., 142 S.W.2d 871. (c) Because the defendant in its answer did not allege collusion and fraud between plaintiff and its agent. Templeton v. Standard Life Ins. Co., 140 S.W.2d 726; Longo v. John Hancock Mutual Life Ins. Co., 142 S.W.2d 871. (2) The release obtained by defendant from plaintiff in this case is void because there is no consideration. Fowler v. Missouri Mutual Association, 86 S.W.2d 946; Berry v. Detroit Casualty Co., 300 S.W. 1026; Harms v. Casualty Co., 172 Mo.App. 241, 157 S.W. 1046.

OPINION

SHAIN, P. J.

--This is an action on an industrial policy alleged as issued by defendant on the life of Andrew Watkins. The facts shown by the record are to the effect that the insured, for several years prior to the issuance of the policy, had been an invalid suffering from Hodgkin's Disease and other ailments.

The testimony is further to the effect that a Mr. Wilson, a soliciting agent of defendant, made frequent calls to the home of plaintiff to collect for premiums on other policies, and on several occasions talked with plaintiff on the advisability of taking out insurance on the life of his brother. It is disclosed that plaintiff's said brother had by reason of his ill health been a financial burden on plaintiff.

In conversations prior to the signing of the application of the insured, plaintiff is shown as having informed the said agent of the insured being afflicted with Hodgkin's Disease and other troubles, and had told defendant's agent that he did not think an insurance company would accept his said brother as a risk. According to plaintiff's testimony, the said agent said that his said brother might so recover his health that his company would accept the risk.

Plaintiff's evidence is further to the effect that thereafter his brother's health improved to the extent that he was able to work and that the matter of him taking insurance on his said brother was talked over with the said agent of defendant, and that the plaintiff agreed with said agent that if insurance could be had on his brother's life, that he, the plaintiff, would take care of the payment of premiums on a $ 1000 policy on said brother's life if the insurance be made payable to plaintiff in event of his brother's death.

Plaintiff's evidence is further to the effect that at said time his brother, the insured, was living in Olathe, Kansas. Further, the testimony is to the effect that defendant's said agent went to Olathe and secured the application for insurance from his said brother.

It appears that the agent failed to secure the proposed $ 1000 policy but thereafter the said agent delivered to plaintiff and plaintiff paid the premium upon the industrial policy for $ 500 that is in issue herein. It appears that when the policy was delivered to plaintiff he was not designated directly as beneficiary. However, the policy contained a Facility of Payment Clause and plaintiff testifies that defendant's said agent told him that his interest was duly taken care of in said clause and that he accepted the policy. The date of the application is shown as of November 24, 1936, and the date of the policy as of November 30, 1936. The insured died of Hodgkin's Disease on May 29, 1937.

The plaintiff's petition is in due form alleging performance of all conditions precedent to recovery and asking recovery on policy and for penalty and attorney fees based upon allegation of vexatious delay.

Defendant, after admitting corporate existence and right to write insurance in Missouri, makes answer alleging application as part of contract and goes into detail in alleging the statements in application of the deceased insured to be false and known to be false when made. Further answering, defendant alleges as follows:

"This defendant further states that by reason of the aforesaid false and untrue statements, answers and representations and each of them this defendant was misled, the minds of the parties never met, and said policy was obtained through fraud and mutual mistake and never became a binding contract upon this defendant, and was and is wholly void for all purposes."

Defendant also pleads an accord and satisfaction based upon release signed by plaintiff and also pleads by way of general denial.

The plaintiff makes reply as follows:

"Comes now the Plaintiff and for a reply to the answer of the Defendant, Prudential Insurance Company of America, states:

"That the defendant, Prudential Insurance Company of America waived its rights to insist upon the sound health clause in said policy issued to Plaintiff; that Plaintiff informed Wilson, Agent of the Prudential Insurance Company of America, that the said Andrew Watkins, insured, was sick, had been in Bell Memorial Hospital in Kansas City, Missouri, and was suffering from Hodgkin's Disease according to the doctors and that the defendant Prudential Insurance Company of America thereafter issued to Plaintiff the policy sued on in this case.

"For a further reply to the answer of the Defendant, Prudential Insurance Company of America, Plaintiff states that the release which was obtained by the Defendant, Prudential Insurance Company of America from the Plaintiff, was wholly without consideration and void for that reason.

"The Plaintiff further replying to Defendant, Prudential Insurance Company of America's answer, denies each and every allegation therein contained."

Trial was by jury and at the close of plaintiff's testimony, defendant asked a directed verdict in its behalf. The request was granted and jury instructed to bring in verdict for defendant. The jury brought in verdict for defendant in accordance to the court's direction. A judgment was entered by court in accordance and plaintiff duly appealed.

We will continue...