First Nat. Bank of Cincinnati v. Berkshire Life Ins. Co.

• Decision Date: 24 June 1964
• Docket Number: No. 38465,38465
• Parties: , 27 O.O.2d 360 The FIRST NATIONAL BANK OF CINCINNATI, Appellee, v. BERKSHIRE LIFE INS. CO., Appellant, et al.
• Court: Ohio Supreme Court

Page 395

176 Ohio St. 395

199 N.E.2d 863, 27 O.O.2d 360

The FIRST NATIONAL BANK OF CINCINNATI, Appellee, v. BERKSHIRE LIFE INS. CO., Appellant, et al.

No. 38465.

Supreme Court of Ohio.

June 24, 1964.

Syllabus by the Court

1. Where a judgment is relied upon as determining an issue against a party to the judgment and estopping that party from relitigating that issue, the one so relying upon that judgment must allege and prove that that judgment necessarily determined that identical issue.

2. Where each of two policies of life insurance provides that it shall not take effect until the policy is delivered during the good health of the insured, a judgment against the insurer on one of those policies determining that such insured was in good health on the date of its delivery will not estop the insurer from asserting, as an affirmative and complete defense to the other policy, that the insured was not in good health 26 days before on the date when the other policy was delivered.

3. The reasons for estopping a party to a judgment from relitigating an issue determined against him by that judgment are (1) that public policy requires an end to litigation and (2) that the public is interested in protection of a person from being again vexed for the same cause.

4. In an instance where the estoppel of a party by a judgment which was rendered against him will not protect another from being again vexed for the same cause and will have no substantial effect in ending litigation, such judgment cannot be asserted as an estoppel by one not a party or in privity with a party to the action in which such judgment was rendered.

5. Where an insurer issues and delivers two life insurance policies on the same insured payable to an assignee of the insured, and the second is delivered 26 days after the first, where pursuant to the same application as that for the second policy that insurer issues and delivers a third policy on the same insured payable to a named beneficiary, where each of those three policies provides that it shall not take effect until the policy is delivered during the good health of the insured, and where a judgment for the beneficiary of the third policy is necessarily based upon a determination against the insurer's affirmative defense that the insured was not in good health on the date of delivery of the second and third policies, the insurer will not be estopped by that judgment from asserting, as an affirmative defense in an action by the assignee of the first two policies, that the insured was not in good health on the delivery of those two policies.

This action was commenced by the First National Bank of Cincinnati, as plaintiff (herein sometimes called the bank), against the Berkshire Life Insurance Company, as defendant (herein sometimes called the in surer), by the filing of a petition in the Court of Common Pleas of Hamilton County to recover the death benefits on two separate policies of life insurance, each for $5,000, issued respectively on March 16, 1955, and April 11, 1955, to Elroy C. Denton, who, by written assignments dated May 25, 1955, assigned those policies to the bank as one of several items of collateral security for the payment of a $10,000 note. Denton died on June 12, 1955.

To this petition, which sets out each policy as a separate cause of action, the insurer filed an answer denying liability (except for a return of the premiums paid which were tendered into court) on two separate and distinct grounds, first, that Denton was not in 'good health' on the respective dates when said policies were delivered and each first premium paid, a condition precedent to the effectiveness of each, and second, that said policies were procured by false and fraudulent representations made by Denton concerning his health, habits and previous medical attention.

An amended reply of the bank, in addition to general denials, alleges that, on the date of issuance of the second policy (April 11, 1955), the insurer issued a third policy upon the life of Denton for $5,000; that Anna Marie Slate was designated beneficiary of that third policy; that that beneficiary sought recovery of the proceeds of that third policy from defendant-insurer in a Florida court; that defendant filed an answer 'interposing the identical defenses as are set forth in its answer filed herein'; that a final judgment was rendered in that Florida case in favor of that beneficiary and against defendant; that 'all facts and issues raised by defendant's * * * answer filed herein were raised by defendant's answer in' that Florida case 'and decided therein against defendant'; and that 'by reason thereof defendant is estopped to assert the same again in this action in which plaintiff claims through the same decedent that' that beneficiary 'claimed through and against' this same defendant.

On motion of the defendant, the allegations in the amended reply, except for the general denials thereof, were stricken. Thereafter, a second amended reply was filed containing only those general denials.

The parties having waived a jury, the case was tried to the court which found (1) that Denton was not 'in good health' at the respective times of delivery of the two policies sued on, and (2) that Denton had procured the policies by false and fraudulent representations of which the insurer was without knowledge and except for which the policies would not have been issued. Judgment was rendered for defendant-insurer on both causes of action.

On appeal to the Court of Appeals, that judgment was reversed because of error of the trial court in granting the motion to strike portions of the amended reply, and the cause was remanded to the Common Pleas Court.

The cause is now before this court on appeal from that judgment of the Court of Appeals, pursuant to allowance of a motion to certify the record.

Frost & Jacobs and James G. Headley, Cincinnati, for appellee.

Marble & Vordenberg, Cincinnati, for appellant.

TAFT, Chief Justice.

Each of the two policies involved in the instant action as well as the third policy involved in the Florida case provided that it should not take effect until the policy was delivered 'during the good health of the * * * insured.'

The trial court held that, as alleged in the answer of the insurer, the insured, Denton, was not in good health on March 16, 1955, the date when plaintiff alleges and the trial court found that the first policy was delivered, or on April 11, 1955, the date when plaintiff alleges and the trial court found that the second policy was delivered.

In view of these two findings, the trial court held, in accordance with the decisions of this court, that the bank could not recover. Metropolitan Life Ins. Co. v. Howle (1900), 62 Ohio St. 204, 56 N.E. 908; (1903), 68 Ohio St. 614, 68 N.E. 4; John Hancock Mutual Life Ins. Co. v. Luzio (1931), 123 Ohio St. 616, 176 N.E. 446.

Therefore, unless the portion stricken from the bank's amended reply contains allegations of a judgment against the insurer that would estop the insurer from relitigating the issue as to the good health of Denton on March 16, 1955, the bank could not recover on the policy delivered on that day.

The allegations of the bank's amended reply do describe a judgment against defendant on the third policy issued on April 11, 1955. Recovery by the beneficiary on that policy might determine the good health of Denton on April 11, 1955, but it would not necessarily determine the good health of Denton on March 16, 1955. Denton's good health on March 16, 1955, would not have been an issue in the Florida case based on the policy issued on April 11, 1955.

Where a judgment is relied upon as determining an issue against a party to the judgment and estopping that party from relitigating that issue, the one so relying upon that judgment must allege that that judgment necessarily determined that identical issue. Lessee of Lore v. Truman (1859), 10 Ohio St. 45; Porter v. Wagner (1881), 36 Ohio St. 471; Norwood v. McDonald et al., Adm'rs (1943), 142 Ohio St. 299, 52 N.E.2d 67; Taylor v. Monroe, Treas. (1952), 158 Ohio St. 266, 109 N.E.2d 271; Bernhard, Adm'x, v. Bank of America Natl. Trust & Savings Ass'n (1942), 19 Cal.2d 807, 122 P.2d 892; 30 A...