Martin v. Manufacturers' Accident Indemnity Co. — 40 N.Y. St. Rep. 17

Majority

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Eliza A. Martin, App’lt, v. The Manufacturers’ Accident Indemnity Company, Resp’t.

(Supreme Court, General Term, Fourth Department,

Filed July 7, 1891.)

Headnote

1. Insurance (accident)—Evidence of burbendeb of policy.

On April 8,1889, a person holding an accident insurance policy received a slight injury to his thumb. On April 18th he agreed to accept twenty-five dollars “in full settlement and final satisfaction of any and all claims I now have or may have against said company, for loss resulting from injuries received on April 8, 1889, under my policy No. 12,157, which is hereby surrendered.” And he thereupon executed a receipt for the twen

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ty-five dollars. The policy he retained in his possession. On April 27, 1889, he received another injury, and died from its effects on May 10th. On May 2d he notified the company of the second accident, and on May 9th he received an official notice of the maturity of premiums due. Evidence was given that defendant’s agent had said at the time of settlement for the first accident, “that it was for the weekly indemnity,” and that nothing was then said about canceling the policy. Eeld, that the evidence warranted the inference that the twenty-five dollars was paid exclusively in satisfaction of the loss sustained by the injuries of April 8th, and that there was no intent to surrender or cancel the policy.

2. Same—Consideration for surrender.

The words " hereby surrendered,” in the printed receipts, signed by insured, were inserted without any consideration being paid therefor, and, as an agreement, were inoperative and void.

3. Same—Beneficiary—Rights of.

The policy was made payable, in the event of loss, to the plaintiff, wife of the insured, and she had a beneficial interest in the premiums which had been paid, and in the defendant’s covenant to pay the policy out of its fund, which it was, under its by-iaws, to collect and accumulate and hold in use for the mutual benefit and protection of its members, or their beneficiaries, and which interest could not he affected by the surrender or cancellation of the policy by the insured.

Appeal from a judgment entered in Broome county upon a nonsuit granted at the circuit and from an order denying a new trial on the minutes. Complaint upon a certificate or policy of insurance issued by the defendant on the 9th day of November, 1888, “ by which they undertook and agreed, among other things, to pay to the plaintiff the sum realized upon an assessment made in accordance with the provisions of its by-laws, not exceeding $5,000, within ninety days after the filing with said defendant due proof that said William A. Martin has sustained bodily injuries effected through external, violent or accidental means, which injuries alone occasioned his death within ninety days from the happening thereof.” The answer admitted the issuing “of the certificate of membership or policy of insurance;” also admitted that William A. Martin died upon the 10th day of May, 1889, and that an assessment would “exceed $5,000” and that no part of the alleged sum of $5,000 has been paid. The answer further alleges that on the 8th day of April, 1889, the assured received injuries upon the thumb of his left hand from a hammer, and also alleges “that claim was made by said assured for weekly indemnity under the provisions of said policy, on or about the 9th day of April, 1889, and that thereafter and on or about the 13th day of April, 1889, and while said assured was not disabled within said , policy so as to be entitled to any weekly indemnity, this defendant duly agreed to and with the said assured for a good and valuable consideration, viz.: $25 then and there paid to Said assured, that said sum would be and it was received in full satisfaction and final settlement of any and all claims said assured had or might have against this defendant for loss resulting from injuries received by said assured on said 8th day of April, 1889, for and in consideration of said sum of $25 said assured then and there agreed to, and did surrender, satisfy and cancel said policy of insurance set out in the complaint, by reason of which said policy was surrendered, cancelled and satisfied, and ceased to be an oh-

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ligation or policy against this defendant, all of which is set up as a defense herein.” The nonsuit seems to have been put upon the ground “that the undisputed evidence shows the cancellation of this policy and the company was not liable.”

Plaintiff requested to go to the jury upon the question as to whether “ it was the intent of the parties upon giving this receipt, of April 13th, to surrender the policy, and whether in fact the policy was surrendered; whether in fact it was at the time of Mr. Martin’s death a valid and subsisting contract of insurance, between the beneficiary and the company.” An exception was taken to the holding of the court. In the application made by the deceased on the 8th of November, 1888, and in the 9th subdivision thereof, were inserted these words: “Write certificate payable in case of death by accident under provisions of this certificate to Eliza A. Martin, whose relationship to me is that of my wife.” The agent of the defendant on the 8th of November executed a receipt to the deceased for five dollars “ being payment in advance of the membership fee upon the certificate so applied for.”.

The secretary of the defendant executed a receipt on December 12, 1888, for two dollars “ in payment of premium due December 9, 1888.” February 9, 1889, the secretary executed a receipt for two dollars “ in payment of premium due February 9, 1889 ; ” and the secretary executed a receipt April 9, 1889, for two dollars “in payment of premium due April 9, 1889.” An “ official notice ” from the officers of the Manufacturers Accident Indemnity Company, bearing date May 9, 1889, signed by the secretary, was issued and sent to the assured which contained the following words, viz.: “Your insurance stands on our books as paid to June 9, 1889; your next bi-monthly premium of two dollars is now due; time of payment expires June 9, 1889.” The “official notice,” with other papers accompanying it from the defendant, were addressed to the assured and sent through the mail and received at his residence on the day of his death. On the 27th day of April, 1889, the deceased injured the second finger of the right hand between the first and second joint by taking out a small piece of flesh about the size of a pea; inflammation set ■ in and blood poisoning ensued resulting in his death on May 10, 1889; and it is claimed in behalf of the plaintiff that death resulted from the injuries received on the 27th of April, and that by reason thereof the defendant became liable to pay the plaintiff the sum of $5,000 upon the policy. On the 2d of May, 1889, the deceased requested his daughter to write for and in his behalf, a notice of the injury that he had received on the 27th of April, and send the same to the defendant, which was done, and the defendant received the same in due course of mail and retained it without objection or inquiry communicated to the deceased. On the 14th of May the plaintiff caused notice of the death to be sent to the defendant, with a request for usual blanks to make up proofs of loss, which notice was received by the defendant, but no blanks were furnished, and the plaintiff, on the 29th of May, made up and delivered to the defendant proofs of loss, which were “ returned to plaintiff by defendant next day after receipt, on the

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ground stated, that the policy in question had been canceled and was not in force.”

Carver, Deyo & Jenkins, for app’lt; A. & A. W. Gumming, for resp’t

Plaintiff is entitled to have the most favorable inferences deducible from the evidence and conflicts in the evidence resolved in her favor while reviewing the motion for a non-suit. Weil v. D. D., E. B. & B. R. R. Co., 119 N. Y., 153 ; 28 N. Y. State Rep., 944. Whether the death ensued from injuries covered by the provisions of the policy, upon the evidence produced, was a question for the jury to determine.

(2) Apparently the critical and important question in the case arises upon the effect to be given to the paper signed by the deceased on the 13th day of April, 1889, which was in the following words:

“ Received from the Manufacturers’ Accident Indemnity Go., of Geneva, N. Y., the sum of twenty-five dollars ($25), being in full satisfaction and final settlement of any and all claims I now have or may have against said company for loss resulting from injuries received on the 8th day of April, A. D., 1889, under my policy No. 12,157, which is hereby surrendered.

“Dated at Binghamton, in the State of New York, this 13th day of April, A. D., 1889.

“ W. A. Martin, Claimant.

“ No. 28 Lewis St., Binghamton, N. Y, Residence.

“ G. L. King, witness.”

When the paper was executed, it was a printed blank, except the words and figures underscored.

King, the general agent of the defendant, who witnesses the paper, was called as a witness in behalf of the defendant, and against the objection and exception of the plaintiff he was permitted to give a conversation held with the deceased on the 13th of April, when the paper was executed. It appears by that conversation that the deceased and the witness held a discussion as to the extent of the injuries to the thumb of the deceased and as to what sum would be a suitable compensation therefor, and after an intimation on the part of the witness that he would give ten or fifteen dollars, deceased declared he would not take it, and the witness King finally testifies as follows:

“ I says to him finally, in substance, Mr. Martin, what will you take ana settle this matter, tell me ? I am here with authority to settle with you. He says, I will take one week, that is twenty-five dollars. I says, yes, I says, to end all this discussion I will pay you, and drew out this application, this receipt. ” The witness testifies further that he gave his check for twenty-five dollars and that the deceased signed the paper, and the witness adds, the deceased “looked at it and says, what does that mean by surrendering my policy ? I says it is the usual course when we settle with a man before he recovers from an injury and your reinstatement

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depends on the secretary;' that is nothing I have anything to do with. He signed the receipt and I gave him my check and I left the office; the whole talk I can’t give; I was there perhaps an hour and a half.” The witness further testified that in answer to some question put to him by the deceased, in regard to the surrender of the policy, that he replied, “ I says it is customary to send that to the company with the receipt; it is not here; I didn’t consider it important and did not send for it, and did not •get it; * * * the policy wasn’t there; I says, this surrender is sufficient, and without going after the policy or getting it”

The defendant called one Demeree as a witness, who was present at a portion of the interview which was had between King and the deceased, and he testifies: “Mr. King didn’t say that he would pay ten or fifteen dollars, nor make any offer while I was there. Mr. Martin didn’t say that he would call it one week while I was there. Neither Mr. Martin nor Mr. King made any offer while I was there. I saw no check given nor receipt signed. * * * When I left the office I left Mr. Martin and Mr. King negotiating and talking about the matter.”

The plaintiff called Daniel K Comstock, who testified to a conversation he had held with King, as to which conversation the witness says: “ Mr. King says, I heard Mr. Martin received an accident and I came right around and have settled for a weekly indemnity and have paid him a check for $25 and he requested Mr. Martin to show me the check, which he did. I think it was Mr. King’s individual check for that amount, and the settlement seemed very satisfactory, and there was nothing said about the cancellation of the policy.” We think the evidence warranted an inference that the twenty-five dollars was paid in satisfaction of the loss sustained by the injuries of April 8th, and that the evidence warrants an inference or finding that the payment was made exclusively for such purpose, and that no part of the sum of twenty-five dollars was paid to reimburse the deceased for the premium paid theretofore to the defendant, or for the purpose of obtaining a surrender of the policy; indeed the language of the receipt is that the twenty-five dollars is in satisfaction of “any and all claim I now have or may have against said company for loss resulting from injuries received on the 8th day of April, A. D., 1889.” Ramsden v. Hylton, 2 Vesey, Sr., 310.

In Van Nest v. Talmage, 17 Abb. Pr., 99 , it was held that “ a receipt or release may be avoided by proof that it was obtained without consideration or by misrepresentation, or that it has been rescinded by agreement”

If the receipt is construed in the light of the evidence now mentioned, and the facts and circumstances surrounding the parties at the time of the execution thereof, the conclusion is reasonable that the money paid by the defendant was for the purpose of satisfying the claim or liability which arose by reason of the injuries of the 8th of April We think the words “hereby surrendered ” were inserted without any consideration being paid therefor. Brick v. Campbell, 122 N. Y, 337 ; 33 N. Y. State Rep.,

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520. There was no physical surrender of the policy, the same having been retained by the assured or the beneficiary named therein, and held by them or one of them at the time of the death.

This case is distinguishable from Train v. Holland Purchase Ins. Co., 62 N. Y., 602 , as in that case there was an actual delivery of the policy; a physical surrender of it by the party solely interested therein to the agent, “ and the accéptanee of it by him as agent of the Andes Company, with the intention on the part of both that it should no longer be a contract between the plaintiff and the company,” and that by a party solely interested in the ownership of the policy. We also think this case is distinguishable from Crown Point Iron Co. v. Ætna Ins. Co., 53 Hun, 227 ; 25 N. Y. State Rep., 728, as in that case the plaintiff had actually surrendered the policies, and by its decisive act “ put the policies intentionally out of the plaintiff’s possession,” and no question was made in that case but what the plaintiff was the sole owner of the policy and the sole party interested therein.

Again, by the application that was made to the defendant, it was expressly requested to make the certificate or policy payable in case of death by accident, under the provisions of the certificate, to Eliza A. Martin. By the terms of the policy it was provided that if death should be :t effected through external, violent and accidental means, * * * this company does covenant, promise and agree to pay to Eliza A. Martin, wife, if surviving, if not, to the legal representative of the member, the sum of $5,000 from the benefit fund of the company at the time of said death.” On the 13th of April the policy was in life, and the premium thereon had been paid sufficient to keep it alive until another payment or premium should become due and payable on June 9th. The beneficiary, therefore, had an interest in the covenant of the company which had been paid for. Lockwood v. Bishop, 51 How., 224 . It is not claimed that she ever assented to a surrender of the same, or that she in any manner cancelled her interest in the policy in question; nor does the evidence show any act on her part which can be construed to operate as a surrender of her interest in the policy; besides, on the 9th of May, the defendant, when it issued its “ official notice,” treated the policy as valid and binding. Matter of Booth, 11 Abb. N. C., 145 ; Cooke on Life Ins., p. 138, and cases cited.

Chase, the secretary of the company, and who by evidence is shown to be the principal manager of the company, it must be assumed had either signed, or caused to be signed, the “official notice" which was used, and it must be assumed that he was acting within the scope of his authority when he sent, or caused to be sent, the “ official notice ” to the assured. According to the testimony of King, the secretary had the power to cause a reinstatement of a member even after a valid surrender of a policy. In article 2 of the by-laws, it is provided that if a member shall fail to remit the amount of the assessment within the time specified in the notification, he “ may be reinstated by the secretary under such conditions as he may impose.” It seems „that the

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object of this company is to “ collect and accumulate a fund to be held in use for the mutual benefit and protection of its members, or their beneficiariessuch is the declared object in article 1 of the by-laws. It would seem that the defendant not only covenanted to pay such sum of money as the assessment would yield up to the extent of $5,000, but it undertook to act as trustee, not only for the members but for the beneficiaries mentioned in its policies. This circumstance is not to be overlooked in considering the interest which the plaintiff had in the policy on the 13th of April. Plaintiff has placed her right to recovery by reason of the injury of April 27th, and not by reason of the injury of April 8th. Whether the death resulted from the injury of April 8th, or whether that contributed to the death, were questions which were not determined by the learned judge at the circuit and are not directly brought in review, and probably when this case shall be tried again questions in that regard will be for the jury to determine. Peck v. Equitable Accident Association, 52 Hun, 259 ; 23 N. Y. State Rep., 465, We think the plaintiff’s case is distinguishable from Bacon v. U. S. M. A. Association, 123 N. Y., 304 ; 33 N. Y. State Rep., 591, as in that case it appeared the death of the insured was caused by malignant pustule, and it was, therefore, held that the insured died from a disease within the meaning of the policy.

(3) Neither the notice of motion made upon the judge’s minutes, nor the order entered thereon, specify any grounds and according to the well settled practice of this court, the same cannot, therefore, be reviewed, and the appeal, therefore, must be dismissed. Hinman v. Stillwell, 34 Hun, 178 .

Appeal from the order dismissed.

Judgment reversed and a new trial ordered, with costs to abide the event.

Martin and Merwin, JJ., concur.