Court Opinion

ID: 3429672
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:58:32.175521+00
Date Added: 2024-06-11T13:34:11.389976
License: Public Domain

I find myself unable to agree with the majority opinion and therefore respectfully dissent.
According to the majority's opinion, the lower court should have directed a verdict in favor of the appellant. The opinion sets out that the question in this case is not one of defense against the policy, but is rather one of avoidance of the compromise and settlement, and that the burden rests upon the appellee to prove that the release was procured by fraud. It seems to me that there were sufficient circumstances surrounding the securing of this release and compromise, that the question of whether there was fraud in the securing of the settlement was one for the jury to decide.
The insured in this case had taken a medical examination. There is no claim that he made any fraudulent statements to the doctor who examined him. That doctor was an employee of the Bankers Life Company, and he testified that he did not rely upon any statements made to him by the insured at the time the examination *Page 1199 
was taken. The insured passed the examination and the policy was duly issued to him by the Bankers Life Company. The insured thus was protected under Code, section 8770, and the policy was binding upon the company unless there was fraud used in the securing of the policy. A few months after the policy was issued, we find the insured in a sanitorium in Colorado. Then, in July of the same year, he was at the sanitorium at Iowa City, in bed, suffering from an advanced case of tuberculosis. He was 300 miles from home, confined in this hospital, without any relatives friends, or advisers. A lawyer, representing the appellant company, appeared at the hospital. He had a compromise and settlement agreement prepared. In addition to that, a change of beneficiary, changing the beneficiary from the wife of the insured to his estate. He secured permission of the hospital authorities to go to the insured's room and see the insured. The insured was in bed, suffering from an advanced case of tuberculosis, the record showing that within five months after the date of the visit of the attorney representing the Bankers Life Company the insured was dead, having died from tuberculosis. There was no one else present in the room except the insured and the attorney. According to the testimony of the attorney, he informed the insured that the insured had made false statements in order to secure the policy and that the company was going to cancel the policy. There was some talk and discussion, and argument, between the insured and the attorney, in regard to the cancellation of the policy, and finally the attorney representing the Bankers Life Company stated to the insured, "If you do not make this settlement I am instructed to hire the Wade and Dutcher firm, one of the best in Iowa, to commence an action to cancel this policy." After this statement the insured signed the settlement and compromise, accepting the sum of $275, and also made the change of beneficiary.
In the case of McCowen v. Short, 69 Ind. App. 466, 118 N.E. 538, p. 540, 119 N.E. 216, it was said:
"When it appears that the parties occupy such unequal positions, and that the one occupying the superior position has gained a substantial advantage over the other, the law intervenes in behalf of the weaker person or the one from whom such advantage has been so gained, and raises a presumption of fraud, or unfair or unconscionable dealing in his favor, which, when duly presented, makes out a prima facie case in his favor entitling him to redress, *Page 1200 
unless the other party by proper proof overcomes such inference or presumption of fraud.
"When the facts are sufficient to raise the presumption of fraud or unfair and unconscionable dealing, as above indicated, the injured party is thereby entitled to recover such damages as he has sustained as the proximate result of such fraud, unless the other party by due proof overcomes the prima facie case so made as aforesaid. 12 R.C.L. pp. 232, 234, 424, 427, and notes; Keys v. McDowell, 54 Ind. App. 263-269, 100 N.E. 385; Firebaugh v. Trough, 57 Ind. App. 421-428, 107 N.E. 301, and cases cited; Vandalia Coal Co. v. Alsopp, 61 Ind. App. 649-657, 109 N.E. 421; Meldrum v. Meldrum, 15 Colo. 478, 24 P. 1083, 11 L.R.A. 65, and notes; Fuller v. Supreme Council, etc. [64 Ind. App. 49], 115 N.E. 372-376."
Again, in the case of Mutual Life Ins. Co. of New York v. Sargent (C.C.A.), reported in 51 F.2d 4, the court said at page 6:
"It is also true, however, that where there are facts and circumstances or the testimony of witnesses which furnish contradiction, or where, as here, the testimony cannot be controverted because it relates to statements by or transactions with a decedent, whose lips are sealed by death, it is for the jury to judge the truth of the testimony, and to say whether the statements attributed to the deceased were in fact made by him. Aetna Life Ins. Co. v. Gallaway (C.C.A.) 45 F.2d 391; Casualty Reciprocal Ex. v. Parker (Tex. Com. App.) 12 S.W.2d 536; Smith v. Mutual Life Ins. Co. (C.C.A.) 31 F.2d 280; note, Kelly v. Jones, A.L.R. 792."
Thus we are confronted with a case where the testimony of the insurance company cannot be controverted because the unfortunate individual who took this policy has passed on and his lips are sealed forever. Here we have a case which seems to me to be one that comes under the rule laid down in the cases above cited. The insurance company occupied a superior position. It sent its trained expert, a lawyer, to the hospital room of this insured, where this representative found the insured in bed, in a dying condition, several hundred miles from home, without any one with whom to advise or consult. The insurance company's attorney told this insured — who was physically in a weakened condition and due to the disease from which he was suffering, an advanced case of tuberculosis, *Page 1201 
mentally disturbed — that if he did not compromise and settle this case, the insurance company would hire the best lawyers available, Wade  Dutcher, and commence a court action to cancel the policy. The threat was a court action, to a man in a dying condition. It is a well-known fact that the threat of a court action scares a great many people, and when you couple that with the physical condition of the man at the time, and add to that the fact that the insurance company was settling a liability of $2,000 for the sum of $275, it seems to me that these facts are sufficient to show unfair dealing; that a prima facie case of fraud has been made out; and that it was a question for the jury to decide whether or not there had been fraud used in the securing of this compromise and settlement. It must also be noted that the insurance company, in addition to the signing of the compromise and settlement agreement, insisted on the insured signing a change of beneficiary, changing the beneficiary from his wife to that of his estate. At no time did the insurance company make any effort to secure the insurance policy which it had issued to the insured and which was at the insured's home in northwestern Iowa. Why the company did not attempt to secure the policy does not appear in the record, but if it had attempted to secure the policy it would, of course, have been necessary to inform the relatives of this unfortunate individual that the company was cancelling the policy.
The insurance company in this case is not injured; it can raise its defense of fraud in the securing of the policy, if it has one. And, if the insured was guilty of fraud in the securing of the policy, then the company will not be forced to pay the amount due on this policy. The circumstances covering this settlement, in view of the fact that there is no way that the insured's beneficiary can refute what took place in that hospital room, raise a question of unfair dealing, of fraud, which makes out a prima facie case for a jury to decide. This case has been submitted to a jury, and the jury upon the evidence found for the appellee.
I would affirm the decision of the lower court. *Page 1202