Aetna Life Ins. Co. v. Phillips

• Decision Date: 21 March 1934
• Docket Number: No. 912.,912.
• Citation: 69 F.2d 901
• Parties: ?TNA LIFE INS. CO. v. PHILLIPS.
• Court: U.S. Court of Appeals — Tenth Circuit

69 F.2d 901 (1934)

?TNA LIFE INS. CO. v. PHILLIPS.

No. 912.

Circuit Court of Appeals, Tenth Circuit.

March 21, 1934.

W. E. Green, of Tulsa, Okl. (J. C. Farmer and Gerald Fitz-Gerald, both of Tulsa, Okl., on the brief), for appellant.

Chas. B. Rogers, of Tulsa, Okl. (E. O. Patterson, of Tulsa, Okl., on the brief), for appellee.

Before PHILLIPS, McDERMOTT, and BRATTON, Circuit Judges.

PHILLIPS, Circuit Judge.

Nancy Potter Phillips brought this action against the Insurance Company to recover upon a policy of life insurance. The petition alleged that on March 21, 1921, Jesse M. Phillips made application to the Insurance Company for a seven-year term policy of life insurance for $15,000 payable to plaintiff, his wife, as sole beneficiary; that pursuant to such application the Insurance Company issued to Jesse M. Phillips its policy No. 281,024 for $15,000, payable to plaintiff upon the death of insured; that on April 8, 1928, the Insurance Company issued to insured, in lieu of policy 281,024, a converted modified-life policy No. N 744,237 for $15,000; that insured died on November 19, 1931; that policy 744,237 was then in full force and effect, and that due proof of death was made in accordance with the requirements thereof; that $15,000 was payable thereunder to plaintiff as sole beneficiary, and that the Insurance Company had failed and refused to pay the same.

There was attached to the petition copies of the original application, the application for conversion, and policy 744,237. The portions thereof here material are these:

"No. N 744,237 Age 55

"?tna Life Insurance Company, Hartford, Connecticut, (herein called the Company) hereby agrees to pay Fifteen Thousand Dollars (herein called the sum insured) immediately upon receipt at its Home Office of due proof of the death of Jesse M. Phillips (herein called the Insured) to the beneficiary, the executors, administrators or assigns of the insured. * * *

"During the lifetime of the insured, the right to receive all cash values, loans and other benefits accruing hereunder, to exercise all options and privileges described herein and to agree with the Company to any change in or amendment to this policy shall vest alone in the insured (herein called the Life Owner), subject, however, to any assignment by said life owner. * * *

"The beneficiary may be changed as often as desired, and such change shall take effect on receipt at the Home Office of the Company, before the sum insured or any installment thereof becomes due, of a written request accompanied by the policy for endorsement. * * *

"16. Assignments. No assignment of this policy shall be binding upon the Company unless and until the original or a duplicate thereof is filed at its Home Office. The Company does not assume any responsibility for the validity of an assignment. * * *"

"Application

"Application for Conversion

"May 2nd, 1928.

"I, Jesse M. Phillips of Nashville, County of Davidson, State of Tenn., hereby apply to the ?tna Life Insurance Company for changed insurance on my life, in accordance with the conditions of Term Policy 281,024, issued by said Company, and I hereby certify that said policy is not now assigned except to * * * and agree that the statements and answers in the application of said term policy shall be the basis of the new contract or policy herein applied for and form a part of the same, except that the kind of policy, amount, premium and beneficiary shall be as specified below. * * *

"Beneficiary to be the same as now written in term policy."

The first amended answer of the Insurance Company alleged that on March 21, 1921, insured made an application to the Insurance Company for two policies of term life insurance, one for $15,000 and one for $2,000; that two seven-year term policies were issued on the life of insured, one for $2,000 naming H. B. Alexander as beneficiary, and one numbered 281,024 for $15,000 designating plaintiff as beneficiary; that a copy of such application was attached to each of such policies; that the $2,000 policy lapsed for non-payment of premiums; that prior to the expiration of policy 281,024, and upon the written application of the insured, the Insurance Company changed the beneficiary named therein from plaintiff to the insured's estate; that thereafter such term policy was converted into modified life policy 744,237, wherein the estate of the insured was designated as beneficiary, and that a copy of the original application was attached to policy 744,237.

It further alleged "that when this application reached the Home Office and written to show that H. B. Alexander, a creditor, was designated as beneficiary under the $2000.00 policy, pursuant to a custom and rule of the Home Office of this defendant, there was written into the application, the phrase after the designation of H. B. Alexander, a creditor, as his interest may appear, the following: `Subject to change only on request of beneficiary and myself,' and that this phrase was written into said application to apply to the $2000.00 policy only; and, that said phrase was written by the Company following its custom and rule, so as to protect a designated creditor beneficiary. That said phrase was not in said application at the time it was signed by Jesse M. Phillips or Jesse Martin Phillips and that it was not his designation, but was the designation of this defendant, so as to protect a creditor named as beneficiary and extended to and applied to the $2,000.00 policy only. And that there was no restriction by the applicant Jesse M. Phillips on the beneficiary named under the $15,000.00 term policy; * * * that under said policy (744,237) the beneficiary is directed to be, `The executors, administrators or assigns of the insured.'"

Such answer further alleged that the Insurance Company received a written assignment of policy 744,237 wherein insured assigned all of his interest therein to Alexander, and noted such assignment on its records; that after the death of the insured, Alexander submitted proof of death and filed his claim under such policy, and such claim was paid and the policy surrendered.

The answer denied that plaintiff had any right under policy 744,237 at the date of the death of the insured, and denied that it owed plaintiff $15,000 or any other amount on such policy.

The answer also alleged certain other facts by way of estoppel.

Plaintiff moved to strike the above quoted portions of the answer and demurred to the remainder thereof. The court entered an order sustaining such motion and demurrer, and gave the Insurance Company seven days in which to file a second amended answer. Within that time the Insurance Company filed a second amended answer. It repleaded the allegations of the first answer which had been stricken, adding thereto that the phrase, "Subject to change only on request of beneficiary and myself," was written into the application in red ink.

The second amended answer greatly amplified the plea of estoppel. It alleged that long prior to the expiration of policy 281,024 plaintiff had knowledge that the insured had changed the beneficiary therein to his estate; that plaintiff, at the time policy 744,237 was issued, had knowledge of the conversion of policy 281,024. for policy 744,237, and the designation of the estate of insured as the beneficiary under the latter policy; that prior to the death of the insured plaintiff had knowledge that the insured had assigned such policies to Alexander; that after the death of insured plaintiff asserted that insured's indebtedness to Alexander was approximately $7,000 and demanded that Alexander account to her for the balance of the monies paid him under policy 744,237, and that because of such facts plaintiff had acquiesced in such changes in such policies, the assignments thereof and the payment to Alexander, and was estopped to assert her alleged cause of action.

Thereafter plaintiff moved to strike the second amended answer from the files on the ground that it repleaded matters stricken from the original answer, and matters to which the demurrer had been sustained.

The court struck said second amended answer from the files "particularly for the reason that said second amended answer of defendant" did "not state a defense to plaintiff's petition." Exceptions were duly reserved to the sustaining of the demurrer and the two motions to strike.

After the court had sustained the second motion to strike, the Insurance Company refused to plead further. The plaintiff thereupon moved for judgment on the pleadings. The court sustained this motion and gave judgment for $15,000. The Insurance Company has appealed.

Counsel for the plaintiff contend that the Insurance Company waived any error committed by the court in sustaining the first motion to strike and the demurrer when it pleaded further and filed its second amended answer, and that there was no error in striking the second amended answer, because it repleaded matters theretofore stricken or held insufficient on demurrer.

Where a demurrer has been sustained to a party's pleading and he elects to plead over, he waives any error in the ruling on the demurrer.¹

The rule has its basis in the fact that the amended pleading supersedes and takes the place of the original pleading.²

Where however an amended or supplemental pleading is stricken from the files, the original pleading is restored.³

Therefore, if we consider the second amended answer as stricken at the time the Insurance Company elected not to further plead, the original was restored and the Insurance Company must be regarded as having stood thereon.

However, the ruling of the trial court clearly indicates that it treated the motion to strike the second amended answer as a demurrer thereto. The order recited that the answer was stricken principally because it did not state a defense to plaintiff's petition. In State v. American Surety Co., 78 Mont. 504, 255 P. 1063, it was held that a motion to strike...