Saul v. Continental Casualty Co.

The plaintiff recovered judgment against the defendant on a policy of group insurance issued to the Oregon-Washington Railroad Navigation Company for the benefit of its employees, he being its tie and timber inspector. The policy is a combined accident and sickness indemnity. Plaintiff fell on a street of Portland and fractured his left femur. For some time prior to the fall and ever since, plaintiff has been suffering from arteriosclerosis and high blood-pressure. The indemnity was payable in monthly installments of which the defendant paid 11 on a claim for accidental injury. The plaintiff refused to accept the 12th installment because it required him to receipt in full for the entire amount due him. Under the policy he claimed that he was entitled to further installments on the ground that his injury was due to bodily disease. The company refused further payments

See 14 R.C.L. 1333, 1335. because it contended that plaintiff had not given notice in writing as required by the policy of disability resulting from bodily disease. The portions of the policy pertinent are as follows:

"If the employee is disabled for more than seven days through bodily disease, or by reason of bodily injury incurred through violent, external and accidental means while he is not engaged in the actual performance of the duties of his occupation as such employee, but which in either case, wholly and continuously disables him from the performance of all the duties of his occupation, an indemnity consisting of half monthly wages of such employee for the period not exceeding 12 months, during which he shall be so disabled and in case of sickness shall also be confined to the house by reason of such disability. `Confined to the house' as here used means such confinement as will prevent leaving the house for any purpose of business or pleasure but not the leaving of it solely for medical treatment or healthful exercise in its immediate vicinity.

"In the event of payment of indemnity under the last preceding paragraph by reason of disability resulting from bodily disease, if it shall further be that the employee has, within the time covered by the payments there given, become totally and permanently disabled for life from engaging in any work or occupation for wages or profit, an additional indemnity consisting of half monthly wages for a further period of 12 months.

"Indemnity shall, in no instance, be at a less rate than five dollars per week, nor shall it exceed in the aggregate twenty-five hundred dollars as a payment to any one employee as a result of any one accidental injury or of any one sickness. But one indemnity will be payable for disability resulting concurrently from accidental injury and disease, and all indemnity payments except those accrued will cease at the death of the injured or sick employee."

The assigned errors are based on rulings on the admission of testimony, giving of certain instructions, refusal to give other instructions requested by the defendant and denying defendant's motions for judgment of nonsuit and for directed verdict. Other facts necessary to understand the reasons for our decision will be found in the opinion.

AFFIRMED. REHEARING DENIED. Defendant alleges error in the ruling of the court admitting the correspondence between the plaintiff and officials of the O.-W.R. N. Company in his behalf over defendant's objection. The correspondence was offered for the purpose of proving notice was given to the defendant that plaintiff was suffering from bodily disease. The proofs of plaintiff's disability are based upon accidental injury. After the 11 installments were paid and the defendant insisted upon a receipt in full for the twelfth installment, according to the terms of the policy, plaintiff insisted that his disability was the result of bodily disease which entitled him under the policy to 12 more payments. The amount plaintiff was entitled to receive was $117.50 per month for 12 months in case of accident and the same amount for 24 months in case of permanent disability caused by disease. Proofs of disability were required to be given to the defendant monthly. The first report was made on December 30, 1922, and in answer to the question, "How did the accident happen?" recited "Slipped on icy pavement." That report also contains the following information given by plaintiff's physician:

Question No. 9. "How do you understand he was injured?"

Answer. "Walking on icy pavement he slipped and fell."

Question No. 17. "Has claimant any chronic or constitutional disease or physical defect or infirmity; and if so what?"

Answer. "Yes, arteriosclerosis."

The report made March 23, 1923, embodies a statement from plaintiff's employer in which it is stated that he understands the accident to have happened by a fall on a sidewalk. The physician's statement in the same report states the injury to be "fracture neck of femur, paralysis of left leg." The several reports and correspondence objected to were produced by defendant's attorney on compulsion while an involuntary witness for the plaintiff. The correspondence is not between the defendant and its attorney. It was between the plaintiff or those representing him and the defendant. The fact desired to be proven was that written notice was given to the defendant within 20 days after he became disabled of the plaintiff's disability arising from bodily disease. The policy does not require any particular form of notice. The notice given within eight days after the accident and disability of the plaintiff arose contains the statement that plaintiff was suffering from the disease of arteriosclerosis. The physician and surgeon of the plaintiff's employer testified that the fall was the result of this disease. The correspondence introduced was not privileged. It is direct evidence of the fact sought to be proven, namely: That notice was given to the defendant of the bodily disease suffered by the plaintiff. It was competent for that purpose. The case ofDakin v. Queen City Fire Insurance Co., 59 Or. 269 (117 P. 419), is not in point as clearly appears from this statement taken from the opinion in page 273 of the official report:

"The letters chiefly relate to arguments adduced by the respective parties for and against the payment of the loss produced by the fire, and the reasons for and effect of not making proof of loss within the time prescribed."

It is claimed by the plaintiff that the required notice was in said correspondence. The correspondence was the very best evidence of the fact sought to be proven: Blunt v. NationalFidelity Guaranty Co., 93 Neb. 685 (141 N.W. 1033, 1034). It was in the possession of the defendant and produced by it upon the demand of the plaintiff. The case of Emerson v. WesternAutomobile Indemnity Assn., 105 Kan. 242 (182 P. 647), is not in point for the reason that the correspondence admitted was between the defendant and its attorney. Such correspondence is privileged. Some of the correspondence in the case at bar was not material but was not harmful or prejudicial.

The principal defense is based upon the want of notice of plaintiff's sickness. Out of this contention issue all the assignments of error. The reports were sent by the plaintiff or someone for him as required by the defendant. The reports apparently base his claim for indemnity on account of the fall on the sidewalk. These reports as shown above also contained the statement in different language that plaintiff was suffering from bodily disease. In some of the reports his disease is referred to as paralysis, in others arteriosclerosis and others high blood-pressure. In some of the reports two of the said diseases are mentioned. The testimony of the plaintiff at the trial was to this effect:

"And I felt quite dizzy at that time. It was Saturday, and held onto a store rail, an outside store rail several times, by reason of this feeling. When I reached Sixth Street on my way over to Fourth Street I was stricken with this stroke of paralysis or whatever it was and sunk down on the curb and broke my hip."

The testimony regarding plaintiff's mental condition was admissible. It was pertinent to the issue as to whether or not his mistake in reporting on form furnished by defendant for injury by accident was made in good faith. His surgeon testified that he supposed that the form used was immaterial as long as the facts were shown.

The court instructed the jury to the effect that unless the plaintiff gave notice of his disability from sickness within 20 days after becoming so disabled, he could not recover and that an honest mistake made in assigning the cause of his disability would not prevent him from recovering, unless the defendant was misled to its injury thereby.

The contention of the defendant, as near as we can gather from the record and the brief of the defendant, is that the court erred by submitting to the jury the question of whether or not notice of disability by sickness was given. The instructions were as favorable to the defendant as it was entitled to. It is a general rule of law that a mistake honestly made in a notice or proof of loss and seasonably corrected, would not defeat recovery, unless the insurer was misled to its injury by such mistake. If the insurer after receiving proper notice and proof of loss was not prejudiced and had ample opportunity to investigate conditions so as to ascertain the true state of facts, it could not refuse payment because of a mistake in the cause of disability.

The following authorities sustain the instructions which were given to the jury and complained of: 1 C.J. 471-473; 33 C.J. 7, § 650; 33 C.J. 11-13; § 657; 14 R.C.L. 1335, § 505; Van Eman v.Fidelity Casualty Co., 201 Pa. 537 (51 Atl. 177-179); UnitedStates Casualty Co. v. Hanson, 20 Colo. App. 393 (79 P. 167,178); Phillips v. United States Ben. Soc., 120 Mich. 142 (79 N.W. 1-3; Wildey Casualty Company v. Sheppard, 61 Kan. 351 (59 P. 651, 653, 47 L.R.A. 650); Jarvis v. Northwestern Mut.Relief Assn., 102 Wis. 546 (78 N.W. 1089, 72 Am. St. Rep. 895);Hill v. Aetna Life Ins. Co., 150 N.C. 1 (63 S.E. 124);Travelers' Insurance Co. v. Melick, 65 Fed. 178-187 (12 C.C.A. 553, 27 L.R.A. 629).

In the last case cited in the opinion by Judge SANBORN the rule is stated thus:

"The better rule upon this subject is that statements of this nature in proofs of loss are binding and conclusive upon the party who makes them until, by pleading or otherwise, he gives the insurance company reasonable notice that he was mistaken in his statement, and that he will endeavor to show that the death was the result of different cause from that stated in his proofs. After the insurance company has received due notice of this fact, the proofs have the probative force of solemn admissions under oath against interest, but they are not conclusive."

These conclusions dispose of all the assignments of error. The motions for judgment of nonsuit and for a directed verdict were properly denied. There was sufficient evidence of notice having been duly given the defendant of the disability of plaintiff from sickness to take the case to the jury. The defendant had ample opportunity for investigating fully the condition of plaintiff. The fact that the plaintiff was confined to the hospital or the house for 11 months was evidence that his fractured femur was not the sole cause of his disability. That fracture should have healed within about three months. The defendant was advised by the surgeon caring for the plaintiff that his disability was permanent. Every report made to the defendant informed it that plaintiff was suffering from either arteriosclerosis, high blood-pressure or paralysis. The policy fixing the defendant's liability contains this sentence: "But one indemnity will be payable for disability resulting concurrently from accidental injury and disease and all indemnity payments, except those accrued, will cease at the death of the injured or sick employee." The evidence in this case indicates that plaintiff's disability was the result of both accident and disease. The fall broke the femur. The disease caused him to fall. The broken femur would have healed under ordinary circumstances in about three months. His disability increased from the time of the accident, evincing that his disability was caused by the disease. The mistake of the plaintiff in using the form provided by the defendant for accidents instead of disease, while competent evidence of an admission against his interest, was not conclusive when shown to have been used by inadvertence under the belief that the form was not material and where evidence of the true state of facts was given to the defendant. The defendant introduced no evidence, makes no claim that any fraud has been committed, or that it has been in anywise injured by the mistake. It has made no payments by reason of the mistake that it would not have paid had the notice and proofs shown from the first that the disability was caused by disease. Both the accident and the disease concurred in causing the disability. Under the record the question was one of fact which was submitted to the jury with proper instructions. The fact was resolved against the defendant.

Statutory notice is not involved in this case. Keane v. Cityof Portland, 115 Or. 1 (235 P. 677), is not in point. Here the question is the sufficiency of the notice given: 1 C.J. 477, §§ 193, 194; 14 R.C.L. 1333, 1335, §§ 504, 505. The notice here required is based on contract, not on statute.

The policy, under which the plaintiff claims, contains this statement:

"Indemnity shall, in no instance, be at a less rate than five dollars per week, nor shall it exceed in the aggregate twenty-five hundred dollars as a payment to any one employee as a result of any one accidental injury or of any one sickness."

It is conceded that the defendant had paid to the plaintiff the sum of $1,292.50. The plaintiff claims the additional sum of $1,527.50 which would make an aggregate of $2,820. According to the terms of the contract of insurance in no event is the plaintiff entitled to recover in this action in excess of $2,500. It is necessary therefore to reduce the judgment to the sum of $1,207.50 with interest at the rate of 6 per cent per annum from December 16, 1924. In all other respects the judgment is affirmed. Neither party will recover costs and disbursements in this court.

McBRIDE, C.J., and BURNETT and BELT, JJ., dissent.

BEAN and BROWN, JJ., concur.

RAND, J., took no part in this decision.

The court being evenly divided the judgment is affirmed.

AFFIRMED. REHEARING DENIED.