Yancey v. Central Mut. Ins. Ass'n

• Decision Date: 13 November 1934
• Docket Number: No. 18072.,18072.
• Citation: 77 S.W.2d 149
• Parties: YANCEY v. CENTRAL MUT. INS. ASS'N.
• Court: Missouri Court of Appeals

77 S.W.2d 149

YANCEY v. CENTRAL MUT. INS. ASS'N.

No. 18072.

Kansas City Court of Appeals. Missouri.

November 13, 1934.

Rehearing Denied December 3, 1934.

Appeal from Circuit Court, Benton County; W. L. P. Burney, Judge.

Action by Ethel Davis Yancey against the Central Mutual Insurance Association. Judgment for plaintiff, and defendant appeals.

Affirmed on condition of remittiturs; otherwise, reversed and remanded for new trial.

Irwin & Bushman and Harry L. Buchanan, all of Jefferson City, and F. M. Brady, of Warsaw, for appellant.

Randolph & Randolph and Nile L. Vermillion, all of St. Joseph, for respondent.

REYNOLDS, Commissioner.

This suit was instituted and tried in the circuit court of Benton county. The petition is in two counts; and the suit is by the plaintiff against the defendant association upon two certain certificates of life insurance, issued by the defendant association upon the life of Gilbert M. Crum for $1,000 each, in each of which certificates the plaintiff was named as the beneficiary, whereby she seeks to recover on each a balance in the sum of $500 alleged to be due her. The plaintiff, at the time of the issuance of said certificates, was the wife of the said Gilbert M. Crum and, upon his death, survived him as his widow. Since his death, she has been married to one Yancey; and her name is now Ethel Davis Yancey.

The insured, Gilbert M. Crum, died July 29, 1931, while undergoing an operation known as one for "resection of the bowels." The operation was due to strangulation and obstructions in the bowels by reason of adhesions. The certificates, together with the applications therefor, were introduced by the plaintiff in evidence upon the trial.

Each count of the petition is in the conventional form employed in declaring upon insurance contracts or certificates, such as are involved herein; and, in each count, the recovery of the sum of $500 is sought as the balance due upon the certificate described and set out therein, after allowing credit for a former payment thereon of $500.

To the petition, the defendant, by answer, pleaded that it was an insurance company organized under the laws of the state of Missouri and authorized to do business on the assessment plan only as provided by article 3, chapter 37, Revised Statutes of Missouri 1929 (section 5745 et seq. [Mo. St. Ann. § 5745 et seq., p. 4398 et seq.]), and amendments thereto. The answer admitted the issuance of the certificates, the death of the insured, and the plaintiff to be the named beneficiary in each. The defense set up in such answer to each count of the petition is that insured gave false answer to a question in each application, made a part of its corresponding certificate, in which answer he represented and warranted that he had never been rejected for insurance by any other insurance association or company, which matter contributed to insured's death. The answer in each count further set up a compromise settlement and release wherein, for $1,000 paid to the beneficiary, defendant discharged all claims against it by reason of the aforesaid certificates, after a dispute had arisen between it and the plaintiff as to its liability on the certificates.

The plaintiff filed a reply to defendant's answer, attacking the releases set up in the counts therein as not valid and binding for the reason that they were wholly without consideration; that there was no bona fide dispute between the plaintiff and the defendant at the time of the execution of such settlements and releases, but that, at such time, the agent of the defendant falsely and fraudulently represented to the plaintiff that she could not recover on such certificates and that the defendant owed nothing thereon by reason of the fact that her husband, the insured, had not signed the applications, and further falsely and fraudulently represented to the plaintiff that the defendant was not liable on the certificates because it had been represented in the applications for insurance that the insured had not been rejected by any other insurance company or association; that, in truth and in fact, the agent well knew that said facts did not constitute a defense or a good and sufficient reason to deny liability upon said certificates, but that the plaintiff, relying upon said representations, was deceived thereby and induced to and did sign releases on said certificates in the said sum of $500 each; that the agent for the defendant did not exercise good faith with the plaintiff, but wrongfully and fraudulently made a pretended dispute for the purpose of deceiving the plaintiff and inducing her to settle for a less sum than was actually due her.

It appears that among the questions asked and answers given on the applications for insurance is the following: "Have you ever been rejected for insurance by this Association or any other Association or Insurance Company?" The answer on each application is, "No." It seems to have been admitted that such answers, as shown by the applications, are, in fact, not true but that, prior to the date of said applications, the insured had been rejected for insurance by the American Mutual Insurance Association of Osceola, Mo. It would appear also that the applications were not signed by the insured in his own handwriting, but that the same were signed by plaintiff for him in the presence of the agent of the defendant.

In due time after the death of Gilbert M. Crum, the plaintiff made claim upon the defendant for the full amount in the sum of $1,000 promised to be paid by each of said certificates and made due proof of insured's death. Her claim seems to have been approved by the defendant association, and a check in payment thereof made out and signed and placed in the hands of the defendant's agent for delivery to the plaintiff, and notice of such fact given plaintiff of date August 5, 1931. Shortly prior to the receipt of such notice by her, however, representatives of the defendant association called at the plaintiff's home with two checks for $1,000 each, which they showed to her and asked to be permitted to keep for a short while, to which plaintiff consented. At the time they appeared with the checks, they questioned the plaintiff, who thereupon made inquiry of them if there was any doubt of her getting the full amount of her claim. They assured her that there was none, one of them further stating that they were not trying to beat her out of her claim but that it would be paid to her. Several days afterward, one Marvin, one of such representatives, returned to plaintiff's home with another agent of the defendant from Cole Camp; and plaintiff was further questioned. They inquired if she had heard from the defendant association; they brought up the question of her (plaintiff's) having signed the application blanks for the certificates instead of her husband; and they claimed that certain matters stated in the applications had been misrepresented therein, in that the applications stated that her husband had never been rejected for insurance by any other company, when the fact was that he had been. Plaintiff advised them that defendant's agent who took the applications knew, at the time, that her husband had been rejected. Whereupon, they stated to her that they were not responsible for what the agent did, that it was against the company's rules for her to sign the applications, that a misrepresentation was made in said applications in the statement made in each that the insured had never been rejected for insurance by any other company. Agents of the defendant appear to have called upon the plaintiff a number of times after that. On that trip, they told plaintiff that she would probably have some trouble getting her insurance; that she was not entitled to it because she had signed the application blanks and knew what was in them; that she knew the applications stated that the insured had never been rejected when, in fact, he had been. Those were the only reasons assigned or given her. On the numerous subsequent occasions when defendant's agents called upon her, plaintiff appears to have listened to what they said but failed to talk with any of them except the claim agent. It was insisted by all of them that she should take $1,000 in settlement of both certificates. She remembered talking with the claim agent, who told her that she was not entitled to any of the insurance but that they were giving her $1,000; that such sum would be the limit. On the final trip to see her, when the check for $1,000 was given her and she signed the releases, they stated to her that this was her last chance to get any money and that she had better take it. She says that thereupon she took it and signed for it; that she did not know what to do about taking it; that she believed what they told her; that "they kind of bluffed" her into it. She further testified that she had never been paid any further sum on either of said certificates.

Upon cross-examination, the plaintiff, upon being asked the following questions, made the following answers:

"Q. Where did this man who wrote the policies—where did he live? A. You mean wrote the application blank?

"Q. Yes. A. I don't know where he lived. His name is Evans, that's all I know.

"Q. Now then, didn't they tell you when they came out to see you the second time that they had learned that he had been rejected? A. Yes, I think that was the first time.

"Q. And you told them that he had been rejected then? A. Yes sir.

"Q. You admitted that that was true? A. That was true —

"Q. That raised a dispute —

"By Mr. Randolph: I object to his interrupting before she finishes the answer; finish it. A. Well, I told them that the agent knew that he had been rejected.

"Q. Who? A. I told Mr. Marvin the agent knew that he had been rejected.

"Q. And from that time there was a dispute of several months between you and the company—they were insisting all the time that they were not liable on account of that mistake? A...