{ "id": 8724139, "name": "National Life & Accident Insurance Company, Inc. v. Hitt", "name_abbreviation": "National Life & Accident Insurance v. Hitt", "decision_date": "1937-10-11", "docket_number": "4-4736", "first_page": "691", "last_page": "702", "citations": [ { "type": "official", "cite": "194 Ark. 691" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "48 S. W. (2d) 238", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "185 Ark. 587", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1435107 ], "opinion_index": 0, "case_paths": [ "/ark/185/0587-01" ] }, { "cite": "138 S. W. 1003", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "99 Ark. 438", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1314458 ], "opinion_index": 0, "case_paths": [ "/ark/99/0438-01" ] }, { "cite": "276 S. W. 588", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "169 Ark. 491", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1374105 ], "opinion_index": 0, "case_paths": [ "/ark/169/0491-01" ] }, { "cite": "214 S. W. 58", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "139 Ark. 447", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1596365 ], "opinion_index": 0, "case_paths": [ "/ark/139/0447-01" ] } ], "analysis": { "cardinality": 944, "char_count": 22136, "ocr_confidence": 0.507, "pagerank": { "raw": 9.481742220348808e-08, "percentile": 0.5179840600745449 }, "sha256": "e6c55a9e0166f2279bd2934b124df57b81564cb45fa72aa22e9230d5cdb56c5c", "simhash": "1:abae0051256089c4", "word_count": 3818 }, "last_updated": "2023-07-14T19:32:46.346325+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Mehaeey, J., concurs." ], "parties": [ "National Life & Accident Insurance Company, Inc. v. Hitt." ], "opinions": [ { "text": "Gripein Smith, C. J.\nThis appeal is from a judgment rendered on a verdict of nine jurors who found for the plaintiff on a complaint filed November 23, 1936. Plaintiff-appellee alleged that on November 1, 1932, appellant issued to him its policy of insurance, under the terms of which the assured was entitled to $20 per week in the event he became totally disabled. It is alleged that appellee became totally disabled on March 1, 1933; that on March 12 he was paid $120, and again, on May 5, 1933, was paid $140, such payments being the amount due for thirteen weeks of disability; that by reason of wrongful information and misrepresentations regarding his physical condition, he was induced to surrender the policy on May 5th, at the time payment of $140 was made; that the wrongful information was given and the misrepresentations made by appellant\u2019s agent and physician; that appellee has been unable to perform his duties from March 1, 1933, and- has remained totally disabled during the contract period of the policy; that he was confined to his bed and was unable to walk without the aid of a cane or the assistance of some one; that from March 1, 1933, he has be\u00e9n suffering from arthritis, a stiffness of the spine, and heart trouble, and is still so disabled. The judgment was for $1,800, covering 90 weeks of disability in addition to the payments previously made; an attorney\u2019s fee of $250; penalty of $216; and interest at 6 per cent, on $1,800 from March 11, 1935, to the date of judgment, amounting to $219.90 \u2014a total of $2,485.90.\nIn testifying as to his condition and the circumstances attending settlement with appellant, appellee said:\n\u201cPrior to February, 1933, I was in perfect health, but about February 25, 1933, I went to the Veterans\u2019 Bureau and was advised to go to the hospital. I became ill with pains in my back, hernia and fistula, and had to go to bed and wasn\u2019t able to- go to the hospital. Between February, 1933, and up to date, I have continu- \u2022 ously taken sedatives which in a good many cases eased my pain, and a.t the same time dulled my mind and left it in a daze. In February, 1933, I was working for the National Life & Accident Insurance Company. This company wrote a group policy on its employees and I was covered by this policy, paying \u25a0 half the premium and the company paying the other. I was given a certificate of insurance providing for $20 a week for one hundred and four weeks total disability. I have another policy with the company and at the time it was issued I was examined by Dr. Jobe.\n\u201cAt the time I became totally disabled, around March 1, 1933, Mr. McAllister, the superintendent, and Dr. Jobe came out to see me, and Mr. McAllister kept trying to get me to make a lump sum settlement. The company paid me for six weeks. I imagine Mr. McAllis-ter suggested having Dr. Jobe come out. I met Dr. Jobe when he was working for the company. Dr. Jobe had examined me before I went with the company, and was representing the company. Dr. Jobe would examine applicants for the company. I can\u2019t be sure whether I called Dr. Jobe or Mr. McAllister brought him along, but am of the opinion Mr. McAllister brought him or sent him out. I did not receive a bill from Dr. Jobe. Dr. Jobe told me I had colitis and the rest w;as more mental than anything else. During this time the company was trying to settle with me and I settled about May 5, 1933. Dr. Jobe was the company\u2019s physician and I had confidence in Mr. McAllister and took their word there would not be anything wrong. If I had thought I was totally disabled I wouldn\u2019t have accepted the $140. I had seen Mr. McAllister on several occasions and Mr. McAllister said if there was anything wrong the company would take care of me. I surrendered the policy and stayed in bed until around the middle of July, then began to drag along a little. Would complain about these different ailments, but they would say it was only my mental attitude. I made this settlement on that account. If I had known I was totally disabled, I wouldn\u2019t have made the settlement. I had been in the insurance business a long time and made the settlement because I had been sick for a long time and my wife and children needed food and I liad to take medicine and medicine cost money, and, as I had been sick, we didn\u2019t have any money.\n\u201cThe last part of August, 1936, I went to work for the Reliable Life & Accident Insurance Co., carrying a debit. I spent one-half of my time at work, the other at home, working there until December, and I played out again. I worked as a bookkeeper for the County Relief Office from January to April, 1934. Mr. White did most of my work. I was suffering continuously, but couldn\u2019t go to bed, as I had to take care of my family. In April I went on the road and tried to sell magazines. I was out about one-half the time. I did this until about September. In September, 1934, I went to work for the Life & Casualty Company. One of its agents helped me to do my work. In the latter part of August, 1935, until November, 1935, I went with the Union Life, doing the same work. One of the agents helped me do my work. I was not able to do all of the substantial things which I had done with the National. My physical condition was getting worse all the time. I worked until November 30th and had to go to bed. Dr. S. F. Hurle treated me regularly every week or two. From 1933 to 1935 I thought I would get well. I was taking drugs when I made the settlement. About December 6, 1935, I went to the Veterans\u2019 Bureau where I had my tonsils taken out. I stayed there thirteen or fourteen weeks. I had a hernia,' but my physical condition would not permit an operation. A few months after the tonsil operation, my neck and back was practically ossified. I have the same pains now as I had in 1933. I learned I was totally disabled in March, 1936. I am now drawing $30 a month from the Government as total disability. I surrendered the National Life & Accident Company policy because of the fact they misrepresented my condition. McAllister and the company doctor both said I would be all right, that it was my mental condition. If I had thought I was totally disabled, I would never have turned the policy loose. I now spend part of my time in my wife\u2019s news stand, mostly looking after the finances.\u201d\nThe compromise check indorsed by appellee was introduced. It bore the indorsement: \u201cIn full settlement of claim under Certificate No. 3894, Employees\u2019 Insurance. \u2019 \u2019\nIf, in fact, appellee\u2019s total disability dates back to May 5, 1933, and settlement under the policy was induced through erroneous information given appellee by Dr. Jobe at a time when the physician was acting\u2019 for the company, or by the fraudulent conduct of Superintendent McAllister, this appeal should be affirmed.\nPour subjects of primary importance were included in the proceeding: (1) Whether appellee was totally disabled at the time indicated; (2) Whether the disease occasioning such disability is the same disease now complained of; (3') Whether appellee knew what his real condition was, or as a reasonable person should have known; (4) Whether [assuming that the total disability now complained of did exist in May, 1933] appellee, with knowledge of disability, voluntarily settled with appellant and surrendered the certificate; or, being disabled, and such disability having been continuous, was appellee imposed upon by appellant\u2019s agents and induced through fraudulent representations or erroneous statements to enter into a compromise which yielded compensation for the relatively insignificant sum?\nAs was said in Sanders v. Berry, 139 Ark. 447, 214 S. W. 58, \u201cThe law requires good faith in every business transaction, and does not allow one party to intentionally deceive another by making false representations or by concealment.\u201d In Lone Rock, Bank v. Pipkin, 169 Ark. 491, 276 S. W. 588, we said: \u201cIf the means of information as to the matters represented is equally accessible to 'both parties, they will'be presumed to have informed themselves; and, if they have not done, so-, they must abide, the consequences of their -own carelessness.? \u2019\nTested by this rule, and because of' the-indefinite nature of appellee\u2019s evidence as to what representations were made to him by McAllister, and in view of' appel-l\u00e9e\u2019s own experience as an insurance agent, it must be held that appellee was' not justified in relying upon ex? pressions of opinion by a layman. ' In short, appellee, with respect to his own physical condition, will he presumed to have been, as well informed as McAllister, and no fraud can be predicated upon what appellee says McAllister told him as to the nature and extent of the disability. On the contrary, appellee volunteered the information that in February, 1933 \u2014 approximately three months before the conversations- \u2014 he went to the Veterans\u2019 Bureau and was advised to go to a hospital. Appellee says that the pains he is now experiencing are \u201cexactly the same, or worse,\u201d than those complained of in 1933, but he did not learn that he was totally disabled until about March, 1936.\nTo determine whether the settlement should be set aside, we must scrutinize the conduct and determine the status of Dr. Jobe \u2014 this for the reason that in numerous cases we have decided that an injured person will not be held to the terms of an improvident settlement where such person relied upon information supplied by a physician acting for the offending agency, which information or diagnosis was subsequently shown to have been incorrect, though made without fraudulent intent.\nThis case, therefore, turns upon whether Dr. Jobe, in making the examinations of appellee and advising with him, was the agent of appellant.\nAt the time Dr. Jobe was offered as a witness for appellant, appellee\u2019s attorney made this objection: \u201cIf Dr. Jobe is Mr. Hitt\u2019s physician, we object to his testimony.\u201d The court then remarked: \u201cIt is a question of whose physician he was. I thought you (appellee) contended he was the company\u2019s physician,\u201d to which appel-lee\u2019s attorney replied: \u201cHe can\u2019t testify to anything he did for Mr. Hitt.\u201d\nFrom this colloquy it will be seen that appellee claimed the right to testify to what Dr. Jobe had told him, but insisted that appellant did not have a right to use the doctor as a witness for the purpose of testifying to anything he did for appellee, although, at least inferentially, he was conceding that the doctor might testify as to conversations. This would create a somewhat anomalous situation, inasmuch, as exclusion of the testimony could only be based upon the confidential relationships with which the law clothes physician and patient.\nAppellee testified he was not sure that Dr. Jobe called upon him at his (appellee\u2019s) request, or whether McAllister brought the doctor along, but he was \u201cof the opinion McAllister'brought or sent the doctor.\u201d The company required as a condition precedent to employment that all agents should submit to a physical examination, and before or at the time appellee went to work for appellant he was examined by Dr. Jobe. He also carried another policy of insurance with the appellant company, as to which there is no controversy here, and Dr. Jobe made examination for the company incident to such policy. Appellee further testified that he worked for the Union Life Insurance Company after severing his connections with appellant, and continued in the latter employment until November 30, 1935.\n\u2018\u00a3 Q. Did you have a physician or medical attention during that time? A. Yes, sir.\n\u201cQ. Who were your physicians? A. I had Dr. Jobe and Dr. Hurle, and Dr. Hogue had a laboratory test for Dr. Jobe around April, 1933, I think.\u201d\nAppellee remained in the Veterans\u2019 Hospital from December 11, 1935, until August 25, 1936.\nDr. Jobe testified positively that he was called by Mrs. Hitt; that he was not employed 'by appellant to treat or advise with appellee, and that his bill had been charged to Mr. Hitt, as reflected by his books.\nWe are of the opinion that there was no substantial testimony to sustain appellee\u2019s contention that Dr. Jobe was appellant\u2019s agent for the purpose of advising with appellee as to the status of his health on May 5, 1933, \u2022\nChronological sequence of appellee\u2019s activities is highly persuasive of appellant\u2019s contention that there was no intentional or careless deception. After accepting the settlement, appellee, during the latter part of August, 1933, went to work for the Reliable Life & Accident Insurance Company, and continued with the company until December. In January, 1934, he secured employment as a bookkeeper in the Pulaski County Belief Office and worked until April, then went on the road selling magazines until September. He was subsequently employed by the Union Life Insurance Company. In 1934 he applied to the Mid-Continent Life Insurance Company for insurance and in the application stated that he was in good health. Appellee explained this by saying the state manager of the Mid-Continent was a friend of his and needed some additional business, and he signed the application to help the agent, but did not know what representations were made as to the condition of his health.\nIn 1935, while appellee was working for the Union Life Insurance Company, he was issued two life insurance policies, based upon applications made out entirely in his own handwriting. In the applications, appellee said that he was in good health, and had not consulted a physician within the past two years.\nJ. M. Hester, manager of the Reliable Life Insurance Company, testified that appellee was employed by his company in July, or the last of June, 1933, as agent. His duties were to solicit new business, collecting on a regular debit, and adjusting claims; that appellee worked regularly until the last of December; that the work required a great deal of walking, and appellee performed his duties. Appellee quit of his own accord and did not mention total disability.\nN. E. Blasingame testified that he was formerly an agent for the Life & Casualty Company; that appel-lee went to work for that company on September 8th or 10th, 1934, and worked until July, 1935, writing business and paying claims. \u201cI was in the office with him each day, and, as far as I know, he performed the services of an agent during the time he was with the company. I couldn\u2019t say I heard him say he was disabled, as he did his work. I did hear him mention being sick a time or two in the office several times, but didn\u2019t observe him lose any time from his work.\u201d\nClifford Jordan, manager of the insurance department of Union Life Insurance Company, testified that lie employed appellee, who worked for the company from August, 1935, until December, and \u201cduring that time he worked regularly and I have no recollection of hearing him complain of suffering any illness or disability.\u201d The witness testified that as agent appellee, had authority to take applications for insurance. The applications made out by appellee, wherein he applied for insurance on his own life, were introduced by the witness, one for $500 bearing date of August 26, 1935, and one for $300 having been written subsequently. The company accepted at face value statements by the applicant that he was in good health and had not consulted a physician within two years, and policies were written. Referring to one of the applications, the witness testified : \u2018 \u2018 This is the original, and was written entirely by Mr. Hitt and signed by him. He did both. From July, 1935, until December, he worked regularly for the company.\u201d\nDr. J. R. Wayne testified that he had known appel-lee for less than a month. Examined him March 2, 1937, and found him suffering from arthritis, with deformity in the neck and back; heart not compensating properly. \u201cHe has arthritic condition of his back and complained of a pain in the abdomen with colitis. Has crepitus. Mr. Hitt may have been totally disabled since March, 1933. It can vary. It can come on in a short period of time and a longer period of time. Arthritis sometimes begins in childhood. It can go back quite a length of time or it can come on within a reasonable time. The infection has usually extended over a period of many years and usually in later life the deformity comes on. .You can have acute arthritis within a period of a few months. When you get calsification, as appellee has in his neck and spine, that is over a period of a good many years.\u201d\nIn Jarrett v. Langston, 99 Ark. 438, 138 S. W. 1003, we said: \u201cTo be fraudulent, representations must be made by one. who either knows them to be false; or else, not knowing, asserts them to be true, and made with intent to have the other party act upon them to his injury, and such must be their effect.\u201d\nCorpus Juris, vol. 26, p. 1131, states the. following rule as to fraud: \u201cAn honest but erroneous expression of opinion or belief is not fraud. Since, a statement concerning* a matter not susceptible of exact knowledge by the speaker is no more than expression of a belief, one making such a statement in good faith is not liable for its falsity. The rule may apply, although the statement was made in terms of positive personal knowledge, the test being the character of the facts asserted to be true rather than the form of the assertion.\u201d\nA recent decision by the Circuit Court of Appeals for the Eighth Circuit, Pacific Mutual Life Insurance Co. of California v. Jacob, 87 Fed. (2d) 870, held that a mutual mistake of the insurer and the insured as to probable future duration of insured\u2019s disability would not justify cancellation of an agreement compromising and settling claim for disability benefits and cancelling disability clause of a life policy.\nThis court held in Phoenix Utilities Company v. Smith, 185 Ark. 587, 48 S. W. (2d) 238, that a release is not binding on the releasor where the physician of the party responsible for an injury represents to the injured person that his injuries are temporary when in fact they are permanent, and where the injured person executes a release relying upon the statements of such physician.\nIn that case the appellee, plaintiff below, sustained a serious injury, and was treated at his home by a physician furnished by the Phoenix Utilities Company. Later he was taken to a hospital and operated upon. Nine days after the operation the company\u2019s adjuster visited appellee at the hospital for the purpose of settling any claim for damages. Appellee stated that he was not ready to settle, and would not do so until he had consulted his doctor. The. adjuster then suggested to appellee that he see his doctor, and stated that he would return the following Friday. On the day this conversation was had, the doctor who had performed the operation under employment by the company called on appellee at \"the hospital. Appellee told the doctor that the adjuster had called, and said, \u201cI would like to know how long it will he before I will be able to go to work.\u201d According to appellee\u2019s testimony the doctor replied, \u201cYou will be able to go back to work in three months. You will be just as good as you ever were, or maybe-stronger.\u201d Based upon this and corroborating testimony as to representations made by the doctor, this court affirmed a judgment for $3,000, the effect of which was to set aside the settlement, made for $400. The opinion contains this statement: \u201cThere is no contention that Dr. Tribble intentionally deceived appellee or practiced a-ny fraud upon him, but the testimony supports appellee\u2019s contention that he relied upon the doctor\u2019s opinion as to his recovery, and that the doctor was mistaken in his prognosis.\u201d\nThis declaration of the law has been consistently followed, and the justness of its application to that class of cases which come within the rule cannot be seriously questioned.\nAppellee, in the case at bar, was in no sense inexperienced. For eleven years he had been employed by insurance companies, and he must have understood the business and the reasons for and effects of settlements. \u201cDisability\u201d was not a term unknown to him, and the degree of physical impairment required to establish liability under the terms of a policy or certificate such as he carried necessarily was discussed by him on many occasions with claimants against companies he represented.\nAfter settling with appellant, more than three years elapsed during which no premiums were paid on the policy because he regarded the transaction as closed, admitting no liability to the company, and' claiming none from it to himself. He repeatedly consulted physicians, as reflected by his own testimony. He was again employed in the same kind of business, and the record indicates that he quit of his own accord. His services had not been complained of, nor was there a showing other than by appellee\u2019s own testimony that he was not able to perform all of tire essential duties, required of one in luis profession.\nThe verity of appellee\u2019s testimony is open to question. He declared, in making application for insurance in the Mid-Continent Company, that he was in g\u2019ood health, but explained that he signed the application in order to help a friend \u201cmake a showing.\u201d The effect of this transaction was to perpetrate a fraud upon the insurance company. This is lightly brushed aside with the inference that such practices are frequent. In 1935 appellee was still representing- himself to be a well man, and applied for two policies of insurance in another company. His statements then made as to the condition of his health may have been mere expressions of opinion, but the additional assertions that he had not consulted a doctor within two years, being untrue, go vitally to the question of his credibility.\nThere being no substantial evidence upon which the jury could have based a finding that Dr. Jobe was appellant\u2019s agent at the time in question, the judgment must be reversed, and the cause dismissed. It is so ordered.\nMehaeey, J., concurs.", "type": "majority", "author": "Gripein Smith, C. J." } ], "attorneys": [ "Barber & Henry and John B. Thurman, for appellant.", "Frankel & Frankel, for appellee." ], "corrections": "", "head_matter": "National Life & Accident Insurance Company, Inc. v. Hitt.\n4-4736\nOpinion delivered October 11, 1937.\nBarber & Henry and John B. Thurman, for appellant.\nFrankel & Frankel, for appellee." }, "file_name": "0691-01", "first_page_order": 709, "last_page_order": 720 }