Equitable Life Assur. Soc. of U.S. v. Mckeithen

• Decision Date: 07 January 1938
• Citation: 178 So. 127,130 Fla. 568
• Parties: EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES v. McKEITHEN.
• Court: Florida Supreme Court

178 So. 127

130 Fla. 568

EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES v. McKEITHEN.

Florida Supreme Court, Division B.

January 7, 1938

Error to Circuit Court, Washington County; Ira A. Hutchison, Judge.

Action by Raymond L. McKeithen against the Equitable Life Assurance Society of the United States on two insurance policies for monthly disability income payments. Judgment for plaintiff and defendant brings error.

Affirmed.

COUNSEL E. C. Maxwell, of Pensacola, and A. P Drummond, of Bonifay, for plaintiff in error.

Cecil A. Rountree and James N. Daniel, both fo Chipley, for defendant in error.

OPINION

BROWN Justice.

Appellee Raymond L. McKeithen, brought an action against the plaintiff in error on two insurance policies issued in 1931 for monthly disability income payments and recovered a judgment, which was affirmed by this court; the only plea in that case being a plea which denied the total and permanent physical disability alleged in the declaration.

Later the insured brought this action on said policies, alleging the facts and setting up the pleadings and judgment in the first action and alleging that a contractual presumption was established by the first action that the disability mentioned in the first action had continued up to the time of the filing of the second action, and that the defendant insurance company had refused to make payments therefor. By pleas in this action the defendant undertook to set up fraud in the procurement of the policies, which alleged fraud was admittedly known to the defendant, as frankly stated in the plea, at least three days before the trial of the first action, but which was not set up by any plea in that action; that defendant did attempt to adduce evidence of such fraud on said previous trial, but was not permitted to do so by the court because not within the issues made by the pleadings.

One of these pleas of fraud filed in this action sets up that the written application made by the plaintiff for the insurance, after inquiring about specified diseases, propounded the question: 'Have you had any other ailment or injury not mentioned above?' to which the plaintiff answered fraudulently, 'No,' with intent to deceive the defendant, when in fact the plaintiff knew that in the year 1918 or 1919, when he was in the United States Army, he had an attack of influenza 'so severe that about the year 1929 he made an application to the United States Government for a pension because of said illness and the alleged disability resulting therefrom,' and the plea further alleged that the defendant had no knowledge or notice of the falsity of the answer until three days before the trial of the first action.

The other plea filed in this second action also alleged fraud in the procurement of the policies in that the insured answered 'No' to this question in the application for insurance: 'Have you ever made claim for sickness, accident, or pension benefits? (Give dates, causes and companies),' with intent to deceive and mislead the defendant when he well knew that in or about the year 1929 he made application to the United States government for pension benefits.

The plaintiff's demurrer to these pleas was sustained by the court, and defendant appeals.

The main question to be decided may be framed thusly: Can a defendant, when sued on a contract, file a single defense which recognizes the validity of the contract, and when, after judgment is entered against the defendant in that action, in a second action on the same contract, plead that the contract is invalid on account of fraud in its procurement, when the facts constituting the alleged fraud were known to the defendant before the day of the trial in the first action?

Another question argued is: Were these pleas sufficient to show fraud in the inducement, even if they had been pleaded and proved in the first action? As the first question must be answered in the negative, we need not discuss the second.

We are of the opinion that the lower court was correct in sustaining the demurrer to the defendant's pleas. Although the question of the validity of the insurance contract was not questioned nor directly put in issue in the first suit, the judgment in that suit established the insurance company's liability on the contract, and by necessary implication the validity of the contract; and, after having recognized the validity of the contract in the first suit, the insurer cannot now deny its validity.

There are a number of Florida cases that have been called to our attention by counsel for plaintiff and defendant. These cases deal with the doctrine of 'Estoppel by Judgment' and 'Res Adjudicata.' Although our attention has not been called to any case similar to the one under consideration, it may be well to review this court's attitude in regards to these doctrines and apply those principles to the present case.

In the case of Prall v. Prall, 58 Fla. 496, 50 So. 867, 870, 26 L.R.A., N.S., 577, this court was considering whether a decree dismissing a bill in a former suit for divorce sought on the grounds of 'habitual indulgence by defendant in violent and ungovernable temper' was conclusive and would be res adjudicata in a subsequent divorce suit between the same parties on the grounds of "extreme cruelty by the defendant to complainant,' and of 'willful, obstinate and continued desertion of the complainant by the defendant for one year." Mr. Justice Whitfield, speaking for the court, said:

'Where the second suit is upon the same cause of action and between the same parties as the first, the final judgment in the first suit upon the merits is conclusive in the second suit as to every question that was presented or might have been presented and determined in the first suit. When the second suit is upon a different cause of action, but between the same parties as the first, the judgment in the first suit operates as an estoppel in the second suit only as to every point and question that was actually litigated and determined in the first, and the first judgment is not conclusive as to other matters that might have been, but were not, litigated or decided. The test of the identity of causes of actions, for the purpose of determining the question of res adjudicata, is the identity of the facts essential to the maintenance of the actions. It is of the essence of estoppel by judgment that it be made certain that the precise facts were determined by the former judgment. If there is any uncertainty as to the matter formerly adjudicated, the burden of showing it with sufficient certainty by the record or extrinsically is upon the party who claims the benefit of the former judgment. Fulton v. Gesterding, 47 Fla. 150, 36 So. 56; Harrison v. Remington Paper Co. (C.C.A.) 140 F. 385, 3 L.R.A.,N.S., 954, 5 Ann.Cas. 314; Rowell v. Smith, 123 Wis. 510, 102 N.W. 1, 3 Ann.Cas. 773; Draper v. Medlock, 122 Ga. 234, 50 S.E. 113, 69 L.R.A. 483, 2 Ann.Cas. 650; Russell v. Place, 94 U.S. 606, 24 L.Ed. 214; etc.'

Mr. Justice TERRELL, speaking for the court in the case of Gray v. Gray, 91 Fla. 103, 107 So. 261, 262, quotes the following from Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195:

'It should be borne in mind * * * that there is a difference between the effect of a judgment as a bar or estoppel against the judgment as a bar or estoppel upon the same claim or demand and its effect as an estoppell in another action between the same parties upon a different claim or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action; * * * but, where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.'

The Gray Case was an action in ejectment. The title to the land in question had already been decided, in a previous suit in chancery between the same parties, to be in the plaintiff. The court held that the final decree in the former suit operated as an estoppel or bar to the defenses offered by the defendant in the second suit.

In the case of Hay v. Salisbury, 92 Fla. 446, 109 So. 617 612, this court held in substance that a decree in a suit to remove claims under contracts as clouds on title was res adjudicata in a subsequent suit to enforce specific performance of contract, as any claims under the contracts could have been litigated in the former action. The opinion also adopts the rule found in 15 R.C.L. 963: 'When the second suit is between the same parties as the first, and on the same cause of action, the judgment in the former is conclusive in the latter not only as to every question which was decided, but also as to every other mattter which the parties might have litigated and had determined, within the issues as they were made or tendered by the pleadings or as incident to or essentially connected with the subject-matter of the litigation, whether the same, as a matter of fact, were or were not considered. As to such matters a new suit on the same cause of action cannot be maintained between the same parties. This rule applies to every question falling within the purview of the original action, both in respect to matters of...