Union Cent. Life Ins. Co. v. Phillips

PARDEE, Circuit Judge, after stating the facts, delivered the opinion of the court. The ruling of the circuit court in the action at law refusing the amendments offered has been much discussed, but, as the ruling was not brought before us by a writ of error, we are very clear tliat the ruling complained of is not subject to review, and we only remark that the power of the court with regard to amendments in an action at law is very broad, under section 5106, Code Ga., and section 954, Rev. Wt. U. 8.,' and that it is generally settled that all matters of amendments to tlie pleadings, particularly including trial amendments, are within the discretion of the trial court, and Us action allowing or refusing amendments is not reviewable on writ of error. The bill in this ease cannot be sustained as ancillary to the suit at law, because the parties are not the same, the subject-matter is not the same, and as to all the matters stated in the bill the plaintiff has an adequate remedy at law. As an original hill it is demurrable for want of equity, the complainant on the facts staled having a complete and adequate remedy at law. If the contract of insurance was complete, and the policy made out and delivered, though afterwards withdrawn and retained by the insurance company, it could have been pleaded and proven without difficulty or obstruction in an action at law. “A court of equity has no jurisdiction of a suit on a bond which, it is alleged, was, through the fraud of a person not a party to the suit, delivered up to be canceled, but which it was clainíed was still in force, where no discovery was sought, and whore the bill furnished a substantial copy of the bond. * * * The bill cannot be sustained on the ground of discovery, for discovery — 24 — is expressly waived, nor on the ground of account, for the complainant states with precision the amount he claims, and, if anything is to he added by way of interest or expenses, that can be ascertained £fS well in a court of law as of equity. Does the fact that the bond is not in the possession of complainant, but that its possession has been obtained by the fraud of one of the obligors, give .a court of equity jurisdiction? It does not, if, notwithstanding these facts, there still remains to complainant a plain, adequate, and complete remedy at law. These circumstances do not, either in stating the case by pleading or in proving it by evidence, in a court at law, present any obstacle to a complete and adequate remedy. When a party pleads a deed or claim, or justifies under it, he must, as a general rule, make profert of it. But there are exceptions to this rule, among which is the case where the deed is lost or destroyed, or is in the possession of the opposite party. These circumstances dispense with the necessity of profert. Steph. PI. 439-441. In proving the averments of the declaration, when the instrument sued on was lost or in possession of opposite party, there would be no obstacle in a court of law. Even where a written instrument which is required in evidence is in the possession of a third person, yet, if there is a privity between such person and the party, a notice to the party is sufficient to let in evidence of its contents. And in case the other party refuses to produce an original deed or agreement which is in his possession, and which he has had notice to produce, secondary evidence of the contents will be received without proof of the execution of the original. 1 Phil. Ev. 440, 452. This is substantially the rule enacted by the Code of Georgia, without regard to the means by which the paper got into the possession of the opposite party. See Code, §§ 3508-3510. * * ⅞ The rule to govern such cases is laid down with great precision and clearness by Mr. Justice Campbell in the case of Hipp v. Babin, 19 How. 271, 15 L. Ed. 633. The result of the argument is that whenever a qourt of law is competent to take cognizance of a right, and has power to proceed to a judgment, which ai-fords a plain, adequate, and complete remedy without the aid of a court of equity, the plaintiff must proceed at law, .because the defendant has a constitutional right to a trial by jury.” Insurance Co. v. Guerard, 3 Woods, 427, 430, 432, Fed. Cas. No. 5,461. As the case is presented here, however, it clearly appears that while the preliminary contract for insurance was entered into, and the first premium paid, the policy was not delivered; thus presenting a case where the complainant may invoke the aid of a court of equity to compel a specific performance of the contract. “It has been objected that the plaintiff had an adequate remedy at law, and was not, therefore, under the necessity of resorting to a court of equity; which may very well be admitted. But it by no means follows from this that a court of chancery will not entertain jurisdiction. Had the suit been instituted before the loss occurred, the appropriate, if not the only, remedy would have been in that court to enforce a specific performance, and compel the company to issue the policy. And this remedy is as appropriate after as before the loss, if not as essential, in order to facilitate the proceedings at law. No doubt a count could have been framed upon the agreement to insure so as to have maintained the action at — 25 — law. But the present proceeding would have been more complicated and embarrassing than upon the policy. The party, therefore, had a right to resort to a court of equity to compel the delivery of the policy, either before or after the happening of the loss; and, being properly in that court after the loss happened, it is, according to the established course of proceeding, in order to avoid delay and expense to the parties, to proceed and give such final relief as the circumstances of the case demand. Such relief was given in the case of Motteux v. Assurance Co., 1 Atk. 545, and in Perkins v. Insurance Co., 4 Cow. 646. See, also, Bell v. Holford, 1 Duer, 66; Shelton v. Westervelt, Id. 110; Cooke v. Cooke, 2 Phil. 583.” Tayloe v. Insurance Co., 9 How. 390, 404, 13 L. Ed. 187. The case shows that on March 30, 1895, Miss Willis Arlena Pugh made application to the Union Central Life Insurance Company for insurance on her own life, using therefor the blanks of the company, and answering in full all questions therein propounded. The eighth answer is as follows: ‘'Amount of policy, $5,000; kind of policy, 20 paymt. option; premium, how payable, A.” On the 7th of May following she was examined by a medical examiner of the company, and was by him recommended on that day for insurance in the company. On the 8th of May following her grandfather and guardian, the present complainant, paid a part of the premium to- the company’s general agent and department manager, taking receipt therefor, and giving a note for the balance due. The receipt given is as follows: ‘'Union Central Life Insurance Company, Cincinnati, Ohio. “Macon, Ga., May 8, 1895. “Premium, $186.95. “Insurance, $5,000. “Received of W. T. Phillips, thirty-six 95/too and note for one hundred dollars, being first annual premium on the application for a policy of insurance in the Union Central Life Insurance Company of Cincinnati, Ohio, for 5,000 dollars on the life of Willis llena Pugh. It is hereby understood and agreed that the said Willis llena Pugh is to bo insured from the date of this receipt, in accordance with all the provisions, conditions, and stipulations of the policies of said company, provided said application shall be approved and accepted by said company. If, however, the application shall be declined by the company,- this agreement to be null and void, and the amount (receipt whereof is herein acknowledged) is to be returned to- said W. T. Phillips by me on surrender of this receipt. T. S. Uowry, Mgr.” In accordance wiih the application, a written policy was prepared by the insurance company, and forwarded to the general manager, accompanied by a blank as follows: “The Union Central Life Insurance Company- — Agent’s Statement— Woman’s Life. “Submitted with Application on Life of Willis A. Pugh. Residence: Delight, Ga. No. 130,501. T. S. Lowry, Agt. “Note. All applications on the lives of women must be submitted to tho home office, with a copy of this form properly filled in. “See rules with regard to applications of women in rate book. “(1) Have you personally seen the applicant at her own residence": “(2) Are you personally acquainted with her? If so, how long have you known her? “(3) Why is she applying for life insurance? Was it suggested to her by you? If not, how was the insurance brought about? — 26 — “(4) If married, is ber husband insured, in this company, and, if so, for what amount? If he is not insured, why not? “(5) Does the applicant reside with her parents or other member of her family? ‘•(6) State applicant’s occupation in full. “(7) If applicant is a widow, state number of children living, if. any, and age of each.” “(9) If beneficiary is other than child, for what purpose is the insurance applied for? “(10) What is the age of the beneficiary proposed, and is he dependent on the applicant for support? Give full particulars. “(11) Is the applicant directly or indirectly engaged or in stay way connected with the manufacture or sale of intoxicating liquors? “(12) Does she now reside in a house where such trade is carried on? “(13) Does the applicant propose to pay the premiums on the policy applied for'out of her own means? If-not, by whom are the premiums to be paid? “[Signed] -> Agent. “Approved, - — , General Agent. “Date, -, 18 — .” The general manager testifies that he also received a letter with the policy, directing him to deliver the policy only after he had followed the instructions of the company. This letter is lost. It gave him instructions to deliver the policy only after he had obtained satisfactory information that would, enable him to answer the questions satisfactorily. Further, he testifies as follows: “Q. I will get you to state whether you had in this particular instance any express authority to deliver this policy. A. No, sir; I had express authority not to deliver it, — -.instructions not to deliver it until I had seen the applicant at her home, and was enabled to answer the questions satisfactorily.” The material questions propounded to the manager in the blank aforesaid are all substantially answered by the applicant in her application. The information sufficient to enable the manager to make satisfactory answers had apparently been already obtained by him, for on June 3d, 25 days after the payment of the premium, he sent to Phillips, Miss Pugh’s guardian, a postal card with this message: “Policy came O. K. I will be down there shortly, and deliver it. Yours, sincerely, T. S. Lowry, Department Manager, .Macon, G-a.” Before the manager made the proposed visit, and before the policy was delivered to the assured, or any one for her, Miss Pugh died, on the 11th of June, 1895; whereupon the manager returned the policy to the home office of the company. Thereafter the company neglected and refused to deliver the policy, concealed, or at least for over one year kept the complainant in ignorance of the terms of, the same, and, although furnished with proofs of death of the assured, refused to pay the loss. These facts and circumstances present a case of equitable cognizance, and we are of opinion, under the evidence in the record, a case for equitable relief. The appellant contends that there was no contract, — no meeting of minds, — and, if there was a contract, the condition- indorsed on th.e undelivered policy, and, in substance, generally found in life insurance policies, to wit, “No suit to recover under this policy shall be brought after one year from the death of the insured,” bars a suit in equity as well as an action at law. — 27 — In regard to these questions we concur with the learned judge in the court below, who found and held as follows: “Now, it appears in the testimony that the grandfather of Willis A. Pugh, who liad represented her in the negotiations with the defendant company, wished that the policy should lie made payable, not to the heirs and administrators of the applicant, but to her younger sister, and he was of the opinion that it was issued in that form until if was produced in court. It now turns out that it was made payable to her legal representatives. This was a variance between tlie terms of insurance as proposed by Mr. Phillips and as they were expressed in the policy, and it is insisted, therefore, that the mind's of the insured and insurer never met upon this contract of insurance, and it is therefore no contract. While it may be true that Willis A. Pugh might have liad the terms of the policy corrected m accordance with her wishes if she had lived, yet, having died, it is, in my opinion, not competent for the insurance company to take advantage of its own mistake. The contract was to insure her life, and that contract was of force, and a court of equity, under the circumstances, will enforce it. It is, moreover, true that .the written application which Willis A. Pugli signed requested the policy to be made out as it was drawn, and the verbal understandings with her grandfather ami the agent of the insurance company anterior to this written application, and tlie policy drawn pursnaut thereto, cannot alter or vary it so as to avoid the liability of the defendant company. * ⅜ ⅜ Nor will the defense of the statute of limitation avail tlie defendant company. Under a misapprehension as to tlie beneliciary of the policy, suit, was brought thereon within the 12-months period by the guardian of the younger sister. The suit was erroneously brought, for the terms of the application and tlie policy place the title to its proceeds in the legal representatives of the deceased. A few days after tlie expiration of the 12 months this bill was tiled by the proper party plaintiff to compel the defendant company to deliver tlie policy, which it had refused to do. and also sought a decree for the amount due thereon. This being true, T think it would be unconscionable io allow the company to take advantage of its own mistake. It was, as we have seen, a completed contract, and, although death had intervened before tlie actual delivery of the policy, it was the plain duty of the company to deliver tlie policy to the legal representative of Miss Pugh. Instead of doing this, it took the policy out of the state. Thus deprived of the opportunity to correct their mistake by an inspection of tlie policy, the legal representative of Miss Pugh technically fell under the bar of the statute, but a court of equity, under the circumstances, will not hold him barred. Tlie company is estopped from pleading the statute.” In Neale v. Neale, 9 Wall. 1, 19 L. Ed. 590, it was decided that: “In the absence of obligatory rules of court to the contrary, a court of equity, after a cause has been heard and a case for relief made out, but not the case disclosed by the bill, has power to allow an amendment of the pleadings on terms that Hie. party not in fault has no reasonable ground to object to. And this amendment will be allowed on a. bill for specific performance where the subject-matter and general purpose of both bills is the same, and the contract, consideration, promise, and acts of part performance, slated in the amended bill, are stated with sufficient precision, and are supported by proofs, taken under Hie original hill, which entitle the complainants to the jelief which they seek.” "When tlie facts of tlie case show the plaintiff to luivo an equitable title to relief, this court, while it may be unable to afford such relief upon the case made by the bill, lias in several instances asserted its power to remand the case *o tlie court below for an amendment, •of tlie pleadings and such further proceedings as may be consonant with justice. In Crocket v. Lee, 7 Wheat. 522, 5 L. Ed. 513, plaintiff filed a bill to obtain a conveyance of land covered by a certificate of settlement right, tlie legal title to which was in the defendant, and he was decreed by the court below, in conformity with another bill filed by the defendant, to convey †<( the defendant: the land covered by his patent. It was contended in the supreme court that the defendant ought not to be allowed to recover on his cross bill by reason of his failure to make tlie proper averments with respect — 28 — to the invalidity of the plaintiffs title. The court adopted the view of the appellant in this particular, but remanded the case, with directions to permit the parties to amend their pleadings. In Watts v. Waddle, 6 Pet. 389, 8 L. Ed. 437, this court affirmed the decree of the circuit court refusing the specific execution of a contract; but, after reviewing the evidence in detail, it further ordered that, to give relief for the rents and profits of the land in controversy, the decree of the circuit court dismissing the bill should be opened, and the case remanded for further proceedings in conformity with law and justice. In delivering the opinion of the court, Mr. Justice McLean observed that ‘a new ground of. relief has been assumed in the argument here that was not made in the circuit, court, which is that, although this court should be of the opinion that a specific execution of the contract ought not, to be decreed, still the complainants are entitled to a decree for the rents and profits of the land while it was in the possession of the defendants. * * ⅜ There is no rule of court or principle of law which prevents the complainants from assuming a ground in this court wnich was not suggested in the court below, but such a course may be productive of much inconvenience and of some expense.’ So, in Parkhurst v. Van Cortlandt, 1 Johns. Ch. 273, whore possession had been taken of land, and improvements made, under an imperfect agreement for purchase, though the court would not grant relief upon the ground of part performance, yet the bill was maintained for the purpose of affording the party reasonable compensation for beneficial and lasting improvements. * * * Pules of pleading are made for the attainment of substantial justice, and are to be construed so as to harmonize with it if possible. A mistaken view of one’s rights or remedies should not be permitted wholly to defeat a claim founded upon principles of equity and justice, and if the pleadings can be so amended as to admit proof of such claim, and such amendment does not introduce a new cause of action, though it may set up a new measure of damages, or work a real hardship to the party defendant, it is within the discretion even of the appellate court to. permit such amendment to be made. The Anne v. U. S., 7 Cranch, 570, 3 L. Ed. 442.” Wiggins Ferry Co. v. Ohio & M. Ry. Co., 142 U. S. 396, 413, 415, 12 Sup. Ct. 188, 35 L. Ed. 1055. In the present instance the variance between the case made by the evidence and that by the bill is such that the latter requires amendment to support the decree, and, under the controlling authorities cited, we deem it our duty to take such action as will permit such amendments as the equity rules warrant and as counsel may advise, upon such terms as may be just. The decree of the circuit court is reversed, and the cause is remanded, with instructions to therein proceed in accordance with the views herein expressed, and otherwise as equity requires.