Sears v. Grand Lodge of the Ancient Order of United Workmen

In the year 1886 the defendant issued a certificate of membership to one Charles R; Baumgras, whereby in effect it insured his life in the sum-of $2,000 and named, his wife, Mary Baumgras, as beneficiary. Thereafter and during the month of September, 1886, said Charles R. Baumgras■ suddenly and mysteriously disappeared from his home. . After various negotiations and communications between said Mary Baumgras and defendant and on or about September 22, 1895, she commenced an action against it. in the Supreme Court to recover the amount of said certificate, in her complaint, amongst other things, alleging the death of said Charles R. Baumgras and certain facts which tended to prove it: Defendant appeared and answered in said action, denying the death of said Baumgras and. generally its liability under said certificate. Thereafter, an agreement was made between her and it compromising and settling said claim and suit and by which agreement it was, amongst other things, provided that the sum of $666 should be paid to her promptly, and that the further sum of $1,334 should be paid to a trustee named, to be retained until. July 1,1897, under the condition and provision that in case defendant should discover at any time between the date of said agreement and said date and should produce proper and reasonable proof that said Charles R. Baumgras was alive, and should fix his identity with certainty and should locate where he was so that his said wife might verify the fact that he was alive, said fund (or property into which it might have been converted) should be returned to defendant: 1

As a matter of fact said Baumgras was not dead, but was discovered alive soon after said agreement was made and before the payment of said sum last above mentioned. The defendant has refused to pay the first sum, which under the agreement was to be paid at once, and said Mary Baumgras having transferred her rights in the same to plaintiff as security or compensation for services rendered by him as an attorney for her, he brings this action.

Plaintiff’s claim and action is based upon the contract of compromise or settlement of the original claim and not upon that claim, and it seems to me that he is entitled to recover.. '

There is no claim that Mary Baumgras did not honestly believe her husband to be. dead and herself to be entitled to the money *55under his certificate of membership in defendant at the time the agreement of compromise was made. The facts as they appeared at the time her action was brought upon that certificate and as they appear upon this action to have existed at that time thoroughly warranted such belief.. They might very probably and properly have, seemed her a verdict and judgment for the full amount of the certificate. Defendant very likely also believed that said Baumgras was dead, but whatever it believed upon that subject, as shown by its answer in the original action and by the very terms of the agreement upon which this action is brought, it recognized that there was no certainty of such death. It put in issue plaintiff’s allegations 'of that fact and put her to her proofs upon that subject. It realized, as shown by its acts and agreement, that while plaintiff might recover the full amount of the certificate, that the insured might still be alive and be found after such recovery. Under such circumstances it made the agreement in question whereby it provided for the payment of a small portion of the policy at once and withheld and postponed the payment of the balance and larger amount thereof to a quite distant date, thus securing the benefit of more time in which to search for the alleged dead man and determine whether in fact he was so dead and his widow entitled to recover. By its agreement it secured the advantage through payment of a small sum of possibly avoiding an immediate recovery for the whole amount, and the ultimate escape from liability for a large portion of the certificate. Even though it believed Baumgras to be dead it made an agreement which contemplated thé possibility -of what transpired to be the actual fact. It made a compromise and settlement of a claim whereby it avoided payment of more than two-thirds of the entire policy. Under these circumstances, although the defendant may as a matter of fact have believed that to be the truth which was not, it still recognized the fallibility of its belief and' provided for the existence of the real fact. The agreement was a compromise and settlement of a disputed claim and is to be treated as such rather than as an agreement made under mistake of fact, as claimed by defendant’s counsel, and under it as such settlement plaintiff is entitled to recover. Mowatt v. Wright, 1 Wend. 356; Feeter v. Weber, 78 N. Y. 334; Adams v. Sage, 28 id. 103, 110; White v. Hoyt, 73 id. 514; Wahl v. Barnum, 116 id. 87.

The action does not come within the principles of those cases cited by defendant’s counsel and which, so far as they are applicable, relate to recoveries or proceedings founded upon an essential fact *56about which there was a mistake, and which are quite, different from that other class, of actions to which the one at bar belongs, where a claim is based upon á settlement of a dispute about the existence, of some fact.

Judgment for plaintiff.