Security Life Insurance Company v. Leeper

The undisputed testimony in the case shows that the settlement was procured upon the representation of V. Y. Hicks, an attorney from Chicago in the employ of the insurance company, that, under the law applicable to the suicide clause in the renewal policy, appellee could only recover two annual premiums. He professed to know the law, and assured appellee and her advisers that such was its effect. He was apprised by appellee and her advisers that they did not know the law, and that they were making settlement with him in reliance by them upon his representation. He was in error as to the law and its effect. The suicide clause was of no avail to appellant as a defense to the cause of action. Appellee was entitled to recover the face of the policy at the time the settlement was made. New York Life Insurance Company v. Adams, 151 Ark. 123. The law declared in the case cited was the law in Arkansas at the time Hicks induced the settlement by misstating the law and its effect to appellee. The most that can be said for Hicks is that he thought he knew the law, and was in good faith. His good faith cannot help appellee unless the company pays her what it justly owed her at the time the settlement was induced. The misstatement of the law by one who professed superior knowledge induced the settlement. The settlement could not have been accomplished except through a mutual mistake of law. Under these circumstances the settlement should not be treated as an accord and satisfaction, and, for the reason stated, Justice WOOD and myself dissent from the majority opinion.