Mutual Reserve Fund Life Ass'n v. Beatty

MORROW, Circuit Judge (after stating the facts as above). There are 28 assignments of error, and 17 specifications of error in support of one of these assignments, making 44 separate and distinct grounds which the plaintiff in error has assigned for a reversal of the judgment in favor of the defendant in error by the court below. The assignments of error relate to the admission of testimony over the objections of the plaintiff in error, the refusal of the court to instruct the jury as requested by the plaintiff in error, and the giving of instructions by the court to the jury over the objections of the plaintiff in error. This is the second time this case has been brought to this court, and, in the view we take of the questions involved, it will only be necessary to discuss such assignments of error as present questions arising upon the last trial. Upon the first trial in the court below, after the testimony had been closed, counsel for defendant moved the court to instruct the jury to return a verdict for the defendant on a number of specified grounds, — among others, that it did not appear from the evidence that the plaintiff was a creditor of the insured, or that the plaintiff had an insurable interest in the life of the insured; that it appeared from the evidence that the assessment or call No. 43 was duly and regularly levied; that notice thereof was sent to the plaintiff; that he had received such notice; that call No. 43 was dated the 1st day of April, 1889; that it was to be paid od or before the 1st day of May, 1889; that no payment was made on that day, and that the evidence disclosed that tender thereof was made on the 3d day .of May, 1889, but at that time the plaintiff was in default, and under the terms of the contract of insurance, as well as the application for such insurance, and according to the provisions óf the constitution and by-laws and regulations of the association, the plaintiff was in default, and the insured had ceased to be a member thereof on account of the nonpayment of that call; that delinquency could not be tolerated or redeemed, except at the option of the company; that no excuse for avoiding forfeiture of a life policy, after delinquency in the payment of the premium, could be heard or entertained by the courts, and the courts could not grant relief against forfeiture in cases like the case at bar. The court instructed the jury to return a verdict for the defendant on the grounds stated in the motion of counsel for defendant, and a verdict and judgment were accordingly rendered in favor of the defendant. The plaintiff thereupon sued out a writ of error, and the case was taken to the circuit court of appeals. The opinion of — 753 — the circuit court of appeals upon the writ of error is reported in 44 U. S. App. 527, 21 C. C. A. 227, 75 Fed. 65. It was there held: That if an insurance company has by its course of conduct, acts, or declarations, or by any language in the policy, misled the insured in any way in regard to the payment of premiums, or created a belief on the part of the insured that strict compliance with the letter of the contract as to payment of the premium on the day stipulated would not be exacted, and the insured in consequence fails to pay on the day appointed, the company will be held to have waived the requirement, and will be estopped from setting up the condition as cause for forfeiture. In determining whether there has been a modification of the terms of the policy by subsequent agreement, or a waiver of the forfeiture incurred by the nonpayment of the premium on the day specified, the test is whether the insurer, by his course of dealing with the insured, or by the acts and declarations of his authorized agents, has induced in the mind of the insured an honest belief that the terms and conditions of the policy declaring a forfeiture in the event of nonpayment on the day and in the manner prescribed will not be enforced, but that payment will be accepted on a subsequent day, or in a different manner; and when such belief has been induced, and the insured has acted on it, the insurer will be estopped from insisting on the forfeiture. That a waiver is often a mixed question of law and fact, and each case must necessarily depend upon its own peculiar circumstances, conditions, and surroundings. But in all cases where there is any substantial evidence of a waiver of any of the rules or regulations of the insurance company, or of any of the provisions of its charter or by-laws, the question as to whether there has been a waiver or not should be submitted as a matter of fact, under instructions of the court, for the jury to decide. That one party to a contract ought not to he permitted to make an outward show of continued leniency, repeated with such uniformity or in such a maimer as to put another off his guard, and then, afterwards, by a sudden change in Ms course of conduct, declare a forfeiture, when the other party has been misled, and is helpless to avert the consequences. That such a course of dealiug may be pursued by insurance companies and mutual benefit associations as will estoj) them from saying that there was no agreement to receive any premiums or calls after the same became due, after tlie companies have permitted their policies or certificates to stand open and remain uncanceled, and especially after they have accepted payments of premiums or assessments overdue. The following authorities were cited as establishing these principles: Bac. Ben. Hoc. § 433; Insurance Co. v. Eggleston, 96 U. S. 572, 577; Insurance Co. v. Doster, 106 U. S. 30, 35, 1 Sup. Ct. 18; Insurance Co. v. Unsell, 144 U. S. 439, 449, 12 Sup. Ct. 671; Dennis v. Association, 120 N. Y. 496, 505, 24 N. E. 843; King v. Association, 87 Hun, 591, 597, 34 N. Y. Supp. 563; Insurance Co. v. Warner, 80 Ill. 410; Association v. Windover, 137 Ill. 417, 27 N. E. 538; Silverberg v. Insurance Co., 67 Cal. 36, 39, 7 Pac. 38; Association v. Jones, 84 Ky. 110, 117; Sweetser v. Association, 117 Ind. 97, 101, 19 N. E. 722; Girard Life Ins. Co. v. Mu754 tual Life Ins. Co., 86 Pa. St. 236. The court held that there was sufficient evidence to justify the submission of the case, upon the facts, under proper instructions from the court on the law, to the jury, and that the court below erred in instructing the jury to find a verdict for the defendant. The judgment of the circuit court was accordingly reversed, and the case remanded for a new trial. Upon the second trial the issues were the same as upon the first, and the testimony introduced upon both sides substantially the same upon both trials. It is clear that the decision of the circuit court of appeals upon the former writ of error is the law of the case, and, so far as the court has considered the questions at issue, they must be deemed to be res judicata, and not open for review at this time. The law upon this subject has been established by numerous decisions. The supreme court of the United States, in Roberts v. Cooper, 20 How. 481, affirms this rule, in the following language: “On the last trial the circuit court was requested to give instructions to the jury contrary to the principles established by this court on the first trial, and nearly all the exceptions now urged against the charge are founded on such refusal. But we cannot be compelled, on a second writ of error in the same case, to review our own decision on the first. It has been settled by the decisions of this court that after a case has been brought here and decided, and a mandate issued to the court below, if a second writ of error is sued out it brings up for revision nothing but the proceedings subsequent to the mandate. None of the questions which were before the court on the first writ of error can be reheard or examined upon the second. To allow a second writ of error or appeal to a court of last resort on the same questions which were open to dispute on the first would lead to endless litigation. In chancery, a bill of review is sometimes allowed on petition to the court; but there would be no end to a suit, if every obstinate litigant could, by repeated appeals, compel a court to listen to criticisms on their opinions, or speculate of chances from changes in its members. See Sizer v. Many, 16 How. 98; Corning v. Nail Factory, 15 How. 466; Himely v. Rose, 5 Cranch, 313; Canter v. Insurance Co., 1 Pet. 511; The Santa Maria, 10 Wheat. 431; Martin v. Hunter’s Lessee, 1 Wheat. 304; and Sibbald v. U. S., 12 Pet. 488.” To tbe same effect are Supervisors v. Kennicott, 94 U. S. 498; The Lady Pike, 96 U. S. 461; Stewart v. Salamon, 97 U. S. 361; Republican Min. Co. v. Tyler Min. Co., 48 U. S. App. 213, 25 C. C. A. 178, 79 Fed. 733. It is contended, however, by counsel for the plaintiff in error, that the decision of this court on the former writ of error was not in accordance with the law as declared by the supreme court of the United States in Thompson v. Insurance Co., 104 U. S. 252, and that, as the law of that court is binding upon this court, the rule of stare decisis cannot be followed, as against thé authority of that court. The answer to this proposition is that Thompson v. Insurance Co. was submitted to the court and 'fully considered in the former case, and, while not referred to in the decision, it was deemed to be inapplicable to the facts before the court in this case, and the cases cited by the court indicated the distinction. To the extent, therefore, that the present assignment of errors involves questions that have already been determined by this court, they cannot be considered. What questions have been so determined? The motion made by counsel at the close of the testi — 755 — mony upon the last trial, that the court should instruct the jury to return a verdict for the defendant on the grounds specified in the motion, was the same motion, based upon substantially the same grounds, as was made at the close of the testimony upon the first trial. This motion, it has been determined by this court, should have been denied. The questions so determined and involved in the motion as made upon the second trial will not, therefore, be further considered. Counsel for the plaintiff in error also requested the court, upon the second trial, to give certain other instructions. In so far as the questions involved in these instructions have been considered in the former case, they will not be further reviewed. We will now proceed to consider the remaining assigned errors relied upon by the plaintiff in error in his brief: In tiie course of the cross-examination of the plaintiff, he testified concerning the delay in paying assessment INb. 16, in 1881, and said, among other things, that he was a minister, and was in possession of a church at that time in San Jose. He was then asked by counsel for defendant, “What was your salary at that time?” The court asked how that was material. Counsel explained that he proposed to show that it was .owing to the financial inability of the plaintiff that he could not pay the delinquent assessments when they respectively came due. He also proposed to discredit the testimony of the witness. After some discussion with the court as to the materiality of the question, the court held that the fact called for by the question was not material. The question at. issue, to which the testimony is claimed to have had relation, was as to -whether there was a waiver of the rules and regulations of the association requiring the payment of the assessment within the time specified in the notice of the assessment. The contention of counsel for the plaintiff in error appears to be that, had the witness been permitted to testify as to his salary, he would have disclosed the fact that it was so small (a fact subsequently admitted by the witness in Ms testimony) that he was not financially able to pay the assessments as they became due. It certainly requires no argument lo show that this fact did not tend to prove that there was no waiver of the rule requiring punctual payments of assessments. But counsel, in his brief, contends that plaintiff’s default in making payments was because of his financial inability to pay the assessments as they became due, and not because of the statement which he testified had been made to him by the assistant secretary of the association, that punctual payments were not required of California members', and that it was for the purpose of bringing out this contradiction that the question was material and relevant. Counsel has evidently overlooked the fact that this last statement of the witness was drawn from him on cross-examination some time after lie was asked the question as to his salary. It is not perceived how an immaterial fact drawn from a witness on cross-examination could, under any circumstances, become relevant and material to contradict a subsequent statement made by the same witness on cross-examination. The ruling of the court was unquestionably correct. — 756 — The defendant, in its answer, denied that the plaintiff was a creditor of the insured. The plaintiff testified upon this point that, in certain stock transactions, Smith had become indebted to him in 1876; that subsequently Smith became a bankrupt in the United States district court, and was discharged from his debts in 1878. In these proceedings plaintiff appeared as having a claim against the bankrupt for the sum of $2,814.35, and as consenting to his discharge. In the application of Smith to the Mutual Reserve Fund Life Association for -membership in the association, dated February 19, 1884, he set forth, among other things, that the name of the person for whose benefit the certificate was issued was Rev. George W. Beatty, that his relationship to the applicant was that of creditor, and that the applicant owed Beatty quite a large sum of money, and this was the only method of recovery. This application was signed by Edwin L. Smith and George W. Beatty; and, upon the representations contained therein, the.association issued to Smith the certificate of membership in controversy, in which it was provided that upon his death the sum of $4,000 was payable to George W. Beatty, creditor, as his interest might appear, if living at the time of said death; otherwise, to the legal representative of the member. The original debt having been discharged by the bankrupt proceedings, it became material to inquire whether the plaintiff was in fact a creditor of the insured at the time of the insurance. In addition to the evidence of that fact, as contained in the terms of the written application for the insurance, the plaintiff testified that he had several conversations with Smith, after his discharge in bankruptcy, in regard to the amount be owed him. The witness was then asked to state what Smith said in regard to paying the debt he owed the witness, if anything. Counsel for the defendant objected that the question was irrelevant, immaterial, incompetent, and inadmissible, on the ground that Smith had been discharged in bankruptcy from this debt, by and with the written consent of the plaintiff. When a debt has been discharged by proceedings in insolvency or bankruptcy, the remedy to enforce the payment of the debt is gone; but the moral obligation to pay it still remains, and is a good consideration for a new promise to make such payment, and the new promise maybe oral. Lambert v. Schmalz, 118 Cal. 33, 50 Pac. 13. The objection was properly overruled. It is also assigned as error that the widow of Edwin L. Smith, who was called as a witness in behalf of the plaintiff, was permitted to testify, over the objections of' counsel, as to the circumstances under which the insurance was made, payable to plaintiff as a creditor, and what her husband said about it. This objection was too general. It does not indicate the specific grounds upon which it was made, and must therefore be disregarded. But, aside from the insufficiency of the objection, the testimony was admissible for the reasons given in sustaining the ruling of the court in overruling the previous objection. It is nest assigned as error that the court instructed the jury as follows: — 757 — “If you find from the evidence that the conduct of the company in the matter of "accepting payments of prior assessments or calls was such as to lead the plaintiff, as a reasonable and prudent man, to believe that strict compliance with the provisions of the policy with relation to payment of calls would not be exacted, and that a delay of a few days after the time for the payment of calls or assessments had matured would make no difference to the company, and that such delayed payments would he accepted by it, and if you further find that plaintiff acted upon such belief in not offering to pay call 48 within tlie time allowed by the policy, then you would be authorized to find that the defendant had waived its right to insist upon a forfeiture of the policy because of such delay in paying call STo. 43; and in that case the plaintiff would be entitled to a verdict. Upon iliis point relating to the waiver by defendant of strict performance of the terms of its policy on the part of the plaintiff. I instruct you that you are to consider all of the evidence, and put yourself in the position of plaintiff, as disclosed by such evidence, and ihen iis reasonable men, draw your own conclusion as to what tlie plaintiff had a right to believe from the defendant’s prior dealings with him in relation to the payment of delinquent assessments. The right to insist upon a forfeiture for nonpayment of money due at a particular time may he waived; and if you believe that the course of dealing between the plaintiff and defendant in regard to the payment and receipt of delinquent assessments was such as to produce in tlie. mind of the plaintiff, as a reasonable and prudent man, an honest belief that a few days’ delay would make no difference to defendant in the payment of mortuary calls, and that plaintiff acted upon such belief in delaying his offer to pay call 43, then you would be authorized to find that defendant waived a strict compliance with the conditions of the policy in regard 1o the time for the payment of such call. This rule or principle of law is founded upon the principle that one party ¡o a contract ought not to he permitted to make and show a continued and repeated leniency in receiving delinquent payments, and in such a way as to put another off his guard, and then, by an instant change of conduct, declare a forfeiture, after the other party has been misled, and is helpless to avert the consequences. It is a question for yon, gentlemen of the. jury, as reasonable men, to consider, whether the company, by its conduct and previous course of dealing, led the plaintiff, as a reasonable and puident business man, to believe that he could make payment a few days after the lime specified in the notice for the making of mortuary calls or assessments. The court cannot say to you, ns a matter of law, that one receipt of money after the time when, under the strict terms of the policy, it should have been paid, would make a waiver, or that twenty would. It is not in the number. Tlie question is for you to determine, from the whole course of business, whether the plaintiff, as a prudent business man, had a right to believe that it was immaterial to the defendant whether he l>aid mortuary calls on the day named in the notices, or a few days thereafter, either directly to the home office, or to the local treasurer of the defendant in this state. It is also claimed by plaintiff that even if you should find that the forty-third call was not paid in Lime, and that the prior conduct of the company did not. excuse a delay, that defendant had nevertheless waived a forfeiture on account of the nonpayment of such a call within the specified time in another way, namely, by making a subsequent mortuary call and assessment, and sending notice thereof to plaintiff. As to that, I instruct you as follows: Imposing an assessment or mortuary call upon the certificate or policy issued to a policy holder, and sending notices of such assessment to a policy holder after the insurance company has knowledge of the fact of previous nonpayment within tlie time fixed by the policy, and which delay in payment would entitle it to consider tlie policy no longer binding, without its assent, is a waiver of the right to claim a forfeiture for nonpayment of previous calls within the time fixed by the policy, and which forfeiture it otherwise might have the right to insist upon. If, therefore, you find from the evidence that subsequent to call 43 an assessment was imposed upon plaintiff on account of ihe policy sued on in this action, and notice of such assessment sent to pin ini iff, that would he treating the policy as in full force by the company at that date; and you will find that there was no forfeiture of the policy on account of nonpayment of mortuary call 43, and the plaintiff would — 758 — be entitled to recover, if thereafter, and within the time allowed by the policy, he offered to pay to the defendant, or its authorized agent, the amount of such subsequent assessment or call. And in this connection I charge you that the fact that all the notices calling for the payment of assessments contain the following condition, to wit, ‘The sending of this notice shall not he held to waive any forfeiture or expiration of membership caused' by nonpayment of any previous annual dues or mortuary calls,’ will not alter the l-gel effect of the notice; and the court instructs you that the legal effect of such notice cannot be overcome by inserting therein a provision like that referred to.” These instructions were all clearly within the law as declared by this court on the former appeal. There was evidence tending to establish the fact of a waiver of the right of the association to insist upon a forfeiture of the contract of insurance because of the delay in paying mortuary call No. 43. The claim of waiver was based upon, the testimony that prior delays had been waived by the association, and the contract continued in force by the collection of assessments thereon. It appeared that mortuary calls numbered 16, 17, 20, 25, 26, and 42 were not paid within the 30 days provided in the notices of assessments; that for calls numbered 16, 17, and 25 conditional receipts were issued, and the conditions complied with by the insured, but for calls numbered 20 and 26 regular receipts were issued by the home office, in New York, and for call No. 42 a regular receipt was issued by the local agent at San Jose. The claim of waiver was also based upon the testimony of the defendant in error that the assistant secretary of the association, in New York, had informed him that they were not particular as to the exact date of payment made by parties residing at distant points. This testimony was contradicted by the officers of the association, but it was for the jury to determine which of these statements was true. The claim of waiver was also based upon the testimony of the defendant in error that subsequent to the making of call No. 43 an assessment was imposed by the association upon the insured, designated as mortuary call No. 44, and that notice of this assessment was sent to the defendant" in error. This testimony was also contradicted by the officers of the association, but it was for the jury, in the light of all the circumstances, to determine which of these statements was true. Upon the evidence as introduced at the trial, it was the duty of the court to submit the question of waiver and forfeiture to the jury for its determination, in accordance with the principles declared by this court in its opinion in the case; and this the lower court did, in clear, concise language, and with such proper and necessary explanation and qualification that the precise issue was fully and accurately defined. We find no error in these instructions. It is assigned as error that the court refused to give certain instructions requested by ■ the plaintiff in error. It will be unnecessary to discuss these instructions. So far as they relate to the substantial rights of the parties, they are disposed of by what has been “ said concerning the instructions which were given by the court. Judgment affirmed.