Travelers Ins Co. v. Sides , 184 Tenn. 663 ( 1947 )

With deference to the esteemed writers of the majority opinion in this Court and that of the Court of Appeals, I am unable to concur for the reason, among others, that, in my opinion, the admission of the oral testimony of Mrs. Sides, which is determinatively material in this case, violates in two particulars the universally recognized rule of evidence that contracts between parties, when reduced to writing, may not be contradicted, added to, or varied by alleged oral prior or contemporaneous agreements.

As well said by the Court of Appeals: "Apart from the oral agreement, we think the intervening payments (which began in 1934) for total and permanent disability operated as a bar to liability under the double indemnity provisions. This by theexpress terms of the policy. General American Life Ins. Co. v.Armstrong, 182 Tenn. 181, 185 S.W.2d 505." (Italics mine.)

In other words, in 1942, when the lump settlement was made and the release agreement executed and since 1934, when monthly payments began to be made for total and permanent disability, "by the express terms of the policy" sued on, it carried no provision for double indemnity in case of death by accident. Now in this situation an agreement was arrived at for a settlement of all disability benefits and a release by Mrs. Sides of all claims under that provision of the policy, for a lump payment consideration of $3,000. This agreement was reduced to writing by the attorney for Mrs. Sides, submitted to and approved by the probate court, Mrs. Sides being guardian for her mentally disabled husband. Now at this time the outstanding insurance policy contract not only carried no liability for double indemnity in case of death by accident, but, to the contrary, by its "express terms," as said by the Court of Appeals. Clearly, and, I assume, it would be conceded, if Sides had come to his death by accident at any time during the eight years preceding the making of the lump settlement, the Company would not have been liable for the double indemnity.

It follows that, if this liability now exists, it is by reason of an alteration or addition to the policy contract made at the time of this settlement and payment of $3,000 in 1942. This is what Mrs. Sides testifies was done by oral agreement. This is the testimony which seems to me to be inadmissible as varying, altering, contradicting, the written policy contract on which this action is brought. This plain provision of the policy, which she thus repudiates, is a standard condition based on obvious factors of risk incident to insuring one against accidental death, who is totally disabled, or past seventy years.

Again, not only does this oral testimony vary and contradict the written insurance policy contract, but it adds to and alters the written agreement and release prepared by the attorney for Mrs. Sides and signed by her and approved by the probate judge, in which the payment of the $3,000 is the sole consideration for the release.

As bearing directly upon this precise situation, I quote from 20 Am. Jur., p. 972: "If the consideration is stated in the writing and is of a contractual nature, parol evidence is inadmissible to vary or contradict it, as where a conveyance expressly recites that it is made for the settlement and release of specified claims." A large number of cases are cited in support of this text and none contra. And see annotations in 12 A.L.R. 354, reviewing cases to the same effect. The following, which seem to me particularly applicable in the instant case, has been approved as a "precise and accurate statement of the rule." It is an excerpt from the opinion of Judge CAMPBELL in Cocke v.Blackbourn, 58 Miss. 537:

"Where parties embody their mutual agreements in a formal written instrument, it must be taken as containing all they then desired to preserve the evidence of; and that it is not competent afterwards, in a trial at law, to add to or subtract anything from it, by parol evidence of something which it should have contained or omitted." And see Baum v. Lynn, 72 Miss. 932, 18 So. 428, 431, 30 L.R.A. 441, wherein this quotation appears.

Of course, equity can entertain a bill to reform such an instrument upon proper allegations of fraud, but we have here no charge of fraud and this is an action at law. Here was a contractual instrument in writing which purported to set out the exact consideration for the release. Yet Mrs. Sides is permitted to testify that the Company's representative orally agreed at the time this agreement was made and reduced to writing that, as an additional and exceedingly valuable consideration, the Company would thereafter recognize liability for double indemnity in case of the accidental death of Sides. Moreover, when this written release agreement was presented to and approved by the probate judge, the record shows that that court, in its order of approval, recited as the consideration for the release of all disability benefits (1) $3,000 and (2) "that the life insurance in the sum of $5,000 is to remain in full force." Reference in the court's order to this life insurance was consistent with a recital in the written release that it "should not effect any other provision of said policy," since a provision of the policy at that time "in full force" called for payment of this $5,000. There is no suggestion that another and additional $5,000 would be paid in case of accidental death, no such provision then being in the policy. Quite apparently, neither the court, nor the lawyer representing Mrs. Sides, had in mind any such additional consideration.

The only authority cited by the Court of Appeals, or in the majority opinion, to sustain the admission of this testimony, isHibernia Bank, etc., v. Boyd, 164 Tenn. 376,48 S.W.2d 1084. Under the facts of that case, wherein the rule admitting parol evidence of contemporary inducements was applied, there was no conflict between the parol evidence and the language of the writing. There was no contractual writing purporting to set out the entire agreement. The securities involved had been turned over to the bank under a written authority to collect any amounts of indebtedness due the bank from this collateral. When sued for a sum in excess of the proceeds of the collateral realized by the bank, Boyd defended upon the ground that upon its acceptance of these securities the bank had waived any personal liability on his part. Not only was this contention not contradictory of the writing, but it appears to have been entirely consistent with it, and the Court quite properly held that under such conditions his oral testimony to the above effect was admissible. We have no such state of facts before us in the instant case, in my opinion.

Other reasons occur to me why a recovery should not be had in this case, but I confine this written dissent to the foregoing statement of my views, which I am constrained to record because I conceive a fundamental principle to be violated by the admission of this oral evidence.

NEIL, J., concurs in this dissent.