Case Name: Edna Workman v. Continental Casualty Company
Court: Supreme Court of Appeals of West Virginia
Jurisdiction: West Virginia
Decision Date: 1934-06-12
Citations: 115 W. Va. 255
Docket Number: No. 7611
Parties: Edna Workman v. Continental Casualty Company
Judges: Hatcher and Maxwell, Judges, dissenting.
Reporter: West Virginia Supreme Court
Volume: 115
Pages: 255–267

Head Matter:
Edna Workman v. Continental Casualty Company
(No. 7611)
Submitted April 17, 1934.
Decided June 12, 1934.
James Damron and Philip Angel, for plaintiff in error.
Fitzpatrick, Brown & Davis and Jackson N. Huddle-ston, for defendant in error.

Opinion:
Litz, Judge:
This is an action in assumpsit by Edna Workman as beneficiary in a health and accident insurance policy for $2,000.00 issued in 1925 by defendant, Continental Casualty Company, to her husband, Amos Workman, "as a passenger brakeman or baggageman on train". He lost his life by accident February 16, 1931, while engaged as a freight brakeman in the service of the Chesapeake & Ohio Railway Company. In his application, attached to the policy, Workman stated that his occupation was "passenger brakeman or baggageman on trains". The policy provides that if the insured is injured while engaged in an occupation classified in the manual of risks prepared by the insurer as more hazardous than that stated in the policy, it will pay only such portion of the indemnity provided in the policy as the premium would have purchased at the rate fixed for the more hazardous occupation in the manual of risks. On March 11, 1931, defendant settled with Mrs. Workman, in accordance with this provision, for $777.10 and obtained from her a written release, of the claim, under seal. Defendant, by written specification, sgt up the provision, the settlement and release as complete defense to the action. Plaintiff replied that the insured at the time of applying for the policy informed the soliciting agent of defendant that his employment required him to serve as a conductor, passenger brakeman, baggagemaster and freight brakeman for the C. & 0. Railway Company, and that she accepted the payment of $777.10 and executed the release, in ignorance of her rights under the policy, upon the representations of the agent of defendant, conducting the transaction in its behalf, that she could not collect any greater amount. The trial court, sitting in lieu of a jury, found for the defendant and entered judgment of nil capiat.
Defendant would uphold the judgment of the circuit court upon the grounds (1) that plaintiff cannot challenge the release in an action at law; (2) that the evidence is insufficient to set aside the release; and (3) that she is bound by the provision of the policy limiting the indemnity to the amount stated in the manual of risks. Plaintiff insists that the release may be attacked in this action and that the manual of risks, which is neither a part of the policy nor attached thereto, cannot be resorted to for any purpose.
It is urged by defendant that a release cannot be attacked at law for fraud in the inducement, as contradis- tinguished from fraud in the execution. This position is taken not solely because the instrument in question is sealed, but it is insistently maintained for that reason. The sealing of written instruments originated at a time when few persons could write; hence the custom of executing a document by stamping thereon an impression in wax, technically called a seal. Notwithstanding the- reason for the practice no longer exists, some law courts-still ascribe sanctity to this senseless form which has degenerated into a mere scroll or flourish of the pen. The tendency, however, is to ignore in large measure the technical distinctions between sealed and unsealed instruments so jealously guarded by the common law. A clear, able, forceful and comprehensive discussion of the subject is presented in Wagner v. National Life Insurance Company, 90 Fed. 395, wherein Judge Taft, later Chief Justice, in writing the opinion of the court, said: "Even courts of common law must partake of the spirit of progress. The inconvenience of compelling a plaintiff in an action at law, who was met by a plea of release, to resort to an expensive and vexatious proceeding in equity to set it aside for fraud, led courts of law to exercise what has already been alluded to as their equitable jurisdiction to defeat the plea. There is good ground for believing that when the fraud was committed by the defendant in procuring the release directly from the plaintiff, and not from a third person, this matter could be set up by replication; and this, even if the fraud did not go to the execution of the release, but only consisted of misrepresentation of material facts. Except for the peculiar sanctity anciently attaching to a sealed writing at common law, which is now disappearing, it is difficult to see how there could be any doubt about the right in an action at law to avoid a release by a reply of fraud. Our conclusion is, therefore, that it is proper in a suit at law for the plaintiff to meet a plea of release by a replication that the release was obtained by fraud, whether the fraud is in the execution, or in misrepresentation as to material facts including execution. We are glad to come to this conclusion, because it avoids circuity of action, and thus facilitates the ad-, ministration of justice." . "
In McCary v. Monongahela Valley Traction Company (an action for personal injuries), 97 W. Va. 307, 125 S. E. 92, this court overruled or ignored a demurrer to a replication charging that a release of the claim, under seal, interposed by special plea, was obtained by'fraud-' ulent' inducements. A similar ruling is found in Danchatz v. Page Coal & Coke Company, 110 W. Va. 212, 157 S. E. 404. "A seal is an essential requisite of a 'release', in the technical sense of that word as known to the common law; but the tendency of modern legislation and judicial decision is. to minimize or abolish the common-law efficacy of the seal, in consequence of which an instrument not under seal may operate as a release, provided that it rests upon a sufficient consideration, and that the language used shows th&t'it was intended as a release." 53 C. J., p. 1198. Seals to instruments relating to the transfer of land or Interest in land have been abolished in West Virginia. Code 1931, 36-3-1. A liberalized practical policy is further evidenced by Code 1931, 56-5-5, permitting the defense of fraud in the procurement to any action on contract.
Moreover, assumpsit is an equitable action maintaina-' ble ordinarily in any case involving the withholding of money by defendant to which plaintiff is, in justice and conscience, entitled. Keener v. Bank of Gassaway, recently decided by this court, 114 W. Va. 780, 173 S. E. 884.
The evidence supports the replication, setting up the release. The circumstances attending its execution amply justify the conclusion that Mrs. Workman acted, in ignorance of her fights, under the influence of the alleged representations by the agent of defendant conducting the transaction in its behalf. It makes little difference whether these assurances were made in good faith or with an intention to deceive.
By section 62, chapter 34, Code 1923, the contract of insurance is limited to the face of the policy. In Bowyer v. Continental Casualty Company (an action on an accident and health insurance policy), 72 W. Va. 333, 78 S. E. 1000, this court held that the statute excludes from insurance contracts "all conditions, Agreements and warranties not expressed in the policies themselves or papers attached thereto"; and- accordingly refused to consider as part- of the insurance contract there involved the application- of the assured, which had not been attached to the policy. In the opinion of the court, written by Judge Poffenbarger, it is stated: "The purpose of statutes of this kind, as declared by the courts in other states, is to require the contract to, be so formed as to enable the insured or assured at all times to have before him the covenants and agreements which he is required to observe or perform and relieve him from the burden of relying upon his recollection of the terms of his contract."
A like ruling was made in Addison v. Commercial Casualty Insurance Company, 100 W. Va. 1, 129 S. E. 711, wherein the defendant sought to read into the insurance contract (a health and accident insurance policy) its manual of risks referred to in a provision in the policy, similar to the one involved in this case, for- the purpose of showing that'the risk incident to the vocation (mech-anician on a racing automobile) in which the insured was engaged at the time of his death, was classified as uninsurable in the manual. Judge Hatcher, speaking for the court, in the opinion said: "Reference to the classification manual would, under the common law rules, have made it a part of the policy, but as pointed out by this court in Bowyer v. Casualty Company, supra, the statute has changed that rule so far as it relates to accident policies issued by corporations organized under the laws of another state, as was the defendant company. Mere reference to some other paper and its adoption by the policy, no longer makes such paper a part of the policy. The purpose of the statute, as explained in the Bowyer case, is to require every condition covenant and agreement of the insurance contract to be expressed in the policy or papers attached, so that the insured at all times may have at hand exact information of his obligations and restrictions. The right of the insured may not be sub jected to a classification manual of which he has vague, if any, information or memory. If the classification manual was no part of the policy, then it had no place in the evidence . It was not competent for any purpose." The opinion also expressed the view that if the manual had been admissible for any purpose it could noit have been accepted as conclusively establishing the relative hazards of different occupations. In this connection, it is stated: "Whether the (automobile) race was obviously dangerous depended on the skill and carefulness of the drivers, the construction of the automobiles, the rate of speed, the distance to be run, the condition of the track, and perhaps Other factors entering into the race, and not on an ex parte classification prepared by the defendant." It is proposed to give effect to the policy provision, under consideration, notwithstanding the statute and the well considered decisions thereon, by holding that the manual may be looked to for the purpose of ascertaining the amount of indemnity to which the plaintiff is entitled, after extrinsic proof 'that the insured was, at the time of his death, engaged in an employment more hazardous than that stated in the policy. This theory seems to recognize the danger of going beyond the insurance contract to the extent of accepting the classification of risk without original evidence that the insured was engaged in a more hazardous employment at the time of his death than that stated in the policy. I can see no difference in accepting the manual for the classification of risks and resorting to it for the purpose of determining the amount of indemnity. Besides, a finding from evidence, independent of the classification of risks in the manual, that the occupation in which the insured was engaged at the time of his death was more hazardous than that stated in the policy could serve no purpose in the case. The application of the provision depends not upon the actual differences in risks of various occupations but solely upon the arbitrary classification in the manual of risks. So that, in order to effectuate the provision of the policy, in contest, it is absolutely necessary to consult the manual not only for the purpose of deter mining the amount of indemnity but also to ascertain whether the risk has been increased within the meaning of. the policy. A change in the amount of the indemnity is dependent upon a change in the risk according to the classification in the manual and not upon proof that the insured was, at the time of his death, engaged in an occupation more hazardous than that stated in the policy. The call of justice in opposition to the statute was more appealing in Addison v. Insurance Company, than it is in this case. Yet, full recovery was there permitted, although the plaintiff was not entitled to any indemnity according to the manual. McCarthy v. Pacific Mutual Life Insurance Company of California, 178 Ill. App. 502, and Newell, Public Administrator v. Aetna Life Insurance Company of Hartford, Conn. (St. Louis Court of Appeals), 258 S. W. 26, are relied upon to justify the enforcement of the provision in question. A statute similar to ours was considered in the first case. The court in holding that the classification in the manual of risks should be adopted in determining the amount of indemnity, said: "We agree with counsel for appellant that the manual of occupations was not part of the policy. We are unable, however, to see why it may not be looked to for the purposes for which the parties have agreed it shall be." This court has held in no uncertain terms that the duty of the judiciary to observe a plain and positive statute is a sufficient reason why the manual may not be looked to. Besides, it involves a contradiction of terms to say that although the "manual of occupations" is no part of the policy it may nevertheless be- considered a part thereof. The policy constitutes the contract of insurance. But if the contract consists of something more than the policy, as seemingly argued by the intermediate court of Illinois, the situation would remain unchanged. The statute limits the contract to the face of the policy. The St. Louis court, without disclosing whether any statute was involved, adopted the ruling in the Illinois case. The changing of occupation by the insured did not forfeit the policy. Beane v. Casualty Company, 64 So. 732, cited by counsel for defendant. The policy was, there fore, in force at the death of the insured. The only issue is whether the benefits thereunder may be cut down by an inadmissible document. We hold, in accordance with the statute and our previous decisions, that this cannot be done, and that plaintiff is entiteld to recover the face' of the policy less the amount received by her from defendant at the' time of executing the release. The case is remanded for judgment to be entered accordingly.
Reversed and remanded.
Hatcher and Maxwell, Judges, dissenting.