Case Name: GEORGE W. SAUL v. CONTINENTAL CASUALTY COMPANY
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1926-10-19
Citations: 119 Or. 591
Docket Number: 
Parties: GEORGE W. SAUL v. CONTINENTAL CASUALTY COMPANY.
Judges: McBride, C. J., and Burnett and Belt, JJ., dissent.
Reporter: Oregon Reports
Volume: 119
Pages: 591–612

Head Matter:
Submitted on briefs July 27,
affirmed October 19,
rehearing denied November 16, 1926.
GEORGE W. SAUL v. CONTINENTAL CASUALTY COMPANY.
(250 Pac. 227.)
For appellant there was a brief over the name of Mr. E. L. McDougal.
For respondent there was a brief over the name of Messrs. Lord & Moulton.

Opinion:
COSHOW, J.
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?" re cited "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 of Dakin v. Queen City Fire Insurance Co., 69 Or. 269 (117 Pac. 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 nnd 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. National Fidelity & 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. Western Automobile Indemnity Assn., 105 Kan. 242 (182 Pac. 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 defend- , ant, 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); United States Casualty Co. v. Hanson, 20 Colo. App. 393 (79 Pac. 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 Pac. 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 San-born 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. The0 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 tbe accident and tbe disease concurred in causing tbe disability. Under tbe record tbe question was one of fact wbicb was submitted to tbe jury with proper instructions. Tbe fact was resolved against tbe defendant.
Statutory notice is not involved in tbis case. Keane v. City of Portland, 115 Or. 1 (235 Pac. 677), is not in point. Here tbe question is tbe sufficiency of tbe notice given: 1 C. J. 477, § 193, 194; 14 R. C. L. 1333, 1335, § 504, 505. Tbe notice bere required is based on contract, not on statute.
• Tbe policy, under wbicb tbe plaintiff claims, contains tbis statement:
"Indemnity shall, in no instance, be at a less rate than five dollars per week, nor shall it exceed in tbe 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 bad paid to tbe plaintiff tbe sum of $1,292.50. Tbe plaintiff claims tbe additional sum of $1,527.50 wbicb would make an aggregate of $2,820. According to tbe terms of tbe contract of insurance in no event is tbe plaintiff entitled to recover in tbis action in excess of $2,500. It is necessary therefore to reduce tbe judgment to tbe sum of $1,207.50 with interest at tbe rate of 6 per cent per annum from December 16, 1924. In all other respects tbe judgment is affirmed. Neither party will recover costs and disbursements in tbis court.
McBride, C. J., and Burnett and Belt, JJ., dissent.
Bean and Brown, JJ., concur.
Band, J., took no part in tbis decision.
Tbe court being evenly divided tbe judgment is affirmed. Affirmed. Behearing Denied.