McKenzie v. Los Angeles Life Insurance

THOMPSON (R. L.), J.

This is an appeal from a judgment for compensation under the terms of an accident insurance policy for injuries sustained. The appellant contends that a receipt in full, which was signed by the respondent, and which is set up in the answer as a defense, bars the recovery.

The respondent was insured against accident by the Los Angeles Life Insurance Company. This policy was sold and transferred to the appellant Peoples Mutual Life Insurance Company, which thereafter became obligated to respondent as insurer. "While this policy was in full force, on August 4, 1926, the respondent, who was a plasterer by occupation, sustained a severe injury to his left ankle and heel, which totally incapacitated him for a period of time and compelled him to resort to a hospital for treatment. Three monthly payments of $100 each were made to respondent by drafts upon the insurance company. Upon the backs of these drafts was printed the following form of receipt:

“By my endorsement I discharge and release Mutual Indemnity Accident, Health & Life Insurance Company of California and accept the amount of this check as

full

payment and satisfaction of any and all claims and all attending and after effects therefrom, which I myself, my heirs, executors, administrators, assigns or beneficiaries now have or may hereafter have under policy No. 23431 for or on account of injury sustained by me on or about August 4, 1926.”

Upon the making of each payment the receipt was required to be signed by the insured. Before signing these receipts for the first three payments, the word “full,” which is hereinbefore italicized, was changed to read “part” payment. Upon receiving the fourth payment this receipt was

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signed by the respondent without this word having been changed. This suit was brought for a balance of compensation alleged to have subsequently accrued. Judgment was rendered in favor of the respondent for the sum of $940.

The trial court found that at the time the respondent signed this receipt, “plaintiff’s eyes were somewhat affected and he could not read the. endorsement appearing on the back of said last check; that plaintiff was not aware . . . that a full release of all claims was printed on the back of said check; . . . that said ... last check was not accepted in full settlement ...” In further justification of respondent’s signature to the receipt, the court also found that the respondent and the agent of appellant who presented this check and procured his signature were close personal friends and members of the same union, and that upon inquiry on the part of respondent this agent assured him that “the check was only part payment and only good for one month’s compensation under the policy.” The court further found that relying upon these false statements and being unable to read for himself, the respondent unwittingly signed the receipt in full. The evidence supports these findings of the court. This testimony of the fraudulent inducements to procure the signature to the receipt in full was received in evidence over the objection of appellant upon the grounds that it was incompetent since the respondent had failed to deny, pursuant to section 448 of the Code of Civil Procedure, the genuineness and due execution of the receipt as it appeared in the answer and because the $140 had not been repaid and there was no effort to rescind the instrument.