Fish v. Prudential Ins. Co. of America

• Citation: 75 N.E.2d 57,225 Ind. 448
• Decision Date: 15 October 1947
• Docket Number: 28274.
• Parties: FISH v. PRUDENTIAL INS. CO. OF AMERICA.
• Court: Supreme Court of Indiana

75 N.E.2d 57

225 Ind. 448

FISH v. PRUDENTIAL INS. CO. OF AMERICA.

No. 28274.

Supreme Court of Indiana

October 15, 1947

Appeal from Jackson Circuit Court; George H Grossman, Judge.

Oren O. Swails, of Seymour, for appellant.

Samuel L. Lowden, of Indianapolis, and T. H. Montgomery, of Seymour for appellee.

EMMERT, Judge.

This is an appeal from a judgment of the Jackson Circuit Court rescinding and cancelling a life insurance policy in the sum of $1,000 issued by the appellee upon the life of Wayne W Fish and payable to his mother, Bessie L. Fish, the appellant, as beneficiary, and setting aside and holding for nought a verdict of the jury on a cross-complaint filed by the appellant for full recovery on said policy.

On November 23, 1940, the appellee filed suit against the appellant for rescission and cancellation of the policy by reason of alleged fraud on the part of the insured in obtaining such policy, and on March 22, 1941 the appellee by leave of court, filed an amended complaint for the same relief. The amended complaint did not change the issues, and in substance alleged that the insured, in order to induce the appellee to execute the policy on his life, without requiring him to undergo a medical examination, made eleven separate representations in writing in the application concerning his past and present health, including a statement that he never had tuberculosis of the lungs or any other part of his body that appellee believed and relied upon said representations, which were material to the risk, and upon reliance of such representations, which became a part of the contract, did issue the policy for $1,000, as set forth in the amended complaint. Appellee further alleged that said representations were false, that in reliance thereon the appellee did execute said policy, but would not have done so if appellee had known the true facts concerning the health of the insured; that for many years prior to November 30, 1938, the insured had been afflicted with and treated for tuberculosis, which was the cause of his death. That appellee did not learn said representations were false until after the death of the insured which occurred on June 1, 1940; that upon learning the true facts it elected to rescind said policy, tendered to the beneficiary the sum of $52.39 which was the sum of all premiums paid plus interest, which tender was refused, and thereafter paid into court for her use at the time suit was filed.

Appellee set forth in the complaint the incontestability clause of the policy which provided:

'Incontestability.--This policy shall be incontestable after two years from its date of issue, except for non-payment of premium, but if age of the Insured be misstated the amount of insurance shall be such as the total rate of premium actually paid would have purchased at the correct age, and the loan and non-forfeiture values and all other benefits shall be adjusted accordingly.'

Appellee further alleged it had no other adequate remedy at law, and prayed a rescission and cancellation of the policy.

On March 7, 1941, the appellant as beneficiary filed a cross-complaint against the appellee, seeking to recover at law for the full amount of the policy. To this cross action, the appellee filed an answer in two paragraphs, the second of which alleged in substance the same fraud alleged in the amended complaint, that appellee had elected to rescind said contract of insurance and had brought suit to cancel the policy. Before trial the appellee filed a motion requiring the court to make special finding of facts and conclusions of law on the issues joined on the amended complaint. On May 13, 1946, the cause was tried, with the issues joined on the cross action submitted to a jury, which was returned by verdict for the appellant in the sum of $1,357.50. On May 24, 1946, the court made and filed its special finding of facts which in substance found for the plaintiff on all issues raised by the amended complaint, and stated as the conclusions of law that the policy be rescinded and cancelled. There was ample evidence to sustain each finding of the court. The court entered judgment pursuant to said special finding of facts and conclusions of law, that the policy of insurance be rescinded and cancelled, and authorized the tender be paid to appellant. Thereafter on the same day the appellee filed a motion in arrest of judgment for the reason that the policy is cancelled and 'there is nothing upon which a judgment in favor of the cross-complaint can rest.' The court overruled appellant's motion for judgment on the verdict, motion to modify special finding of facts and conclusions of law and a motion for new trial. The various errors presented by the briefs will be decided without enumerating them at this time.

The main controversy involved in this appeal hinges on appellant's asserted right to have the verdict of the jury on the cross-complaint conclusive as to the issues raised in the amended complaint.

The right to a trial by jury in Indiana is provided by Section 20 of Article 1 of the Constitution of Indiana which states, 'In all civil cases, the right of trial by jury shall remain inviolate.' This court has judicially construed this provision as guaranteeing the right to a trial by jury in actions at law which were, prior to June 18, 1852, triable by jury, but it does not and did not intend to require a jury trial of issues which were of exclusive equity jurisdiction prior to the adoption of our Constitution. Allen v. Anderson, 1877, 57 Ind. 388, 389; McMahan v. Works et al., 1880, 72 Ind. 19-22; Lake Erie, W. & St. L. R. Co. v. Heath, 1857, 9 Ind. 558-561; Carmichael v. Adams et al., 1883, 91 Ind. 526; Vol. 20, Indiana Law Journal, pp. 345-346; II Gavit on Indiana Pleadings & Practice, p. 2031, § 318.

The rule has been well summarized in Watson's Works, Practice and Forms, Vol. II, at page 192, § 1523, as follows:

'The constitution provides that 'in all civil cases, the right of trial by jury shall remain inviolate.' This provision has been construed to mean, as the language plainly imports, that the right 'shall remain inviolate', that is, continue as it was. At the time of the adoption of the constitution, the right to a trial by jury in chancery cases, or suits in equity, did not exist. Therefore, there is no right to a trial by jury in such cases under the present constitution, although they are 'civil cases' in the sense that they are not criminal cases. The words 'in all civil cases' mean only such civil actions as, before the adoption of the constitution, were triable by jury.'

The Code of 1881 makes statutory provision concerning the method of trial of causes when both legal and equitable actions are involved. It provides:

'Issues of law and issues of fact in causes that prior to the eighteenth day of June, 1852, were of exclusive equitable jurisdiction shall be tried by the court; issues of fact in all other causes shall be triable as the same are now triable. In case of the joinder of causes of action or defenses which, prior to said date, were of exclusive equitable jurisdiction with causes of action or defenses which, prior to said date, were designated as actions at law and triable by jury--the former shall be triable by the court, and the latter by a jury, unless waived; the trial of both may be at the same time or at different times, as the court may direct: Provided, That in all cases triable by the court as above directed, the court, in its discretion, for its information, may cause any question of fact to be tried by a jury, or the court may refer any such cause to a master commissioner for hearing and report.' § 2-1204, Burns' 1946 Repl., Acts 1881, Spec.Sess., ch. 38, § 372, p. 240.

An action to rescind and cancel a written instrument is one in equity. II Gavit on Indiana Pleadings & Practice, p. 2031, § 318; II Watson's Works, Practice and Forms, p. 190, § 1522; Johnson v. Johnson et al., 1888, 115 Ind. 112, 17 N.E. 111; Hess v. Stout, 1930, 91 Ind.App. 617, 171 N.E. 310; Stix et al. v. Sadler et al., 1886, 109 Ind. 254, 257, 9 N.E. 905; Lane v. Schlemmer, 1887, 114 Ind. 296, 303, 15 N.E. 454, 5 Am.St.Rep. 621; Marsh v. Morris et al., 1892, 133 Ind. 548, 555, 33 N.E. 290; 9 Am.Jur. 351, § 3; 9 C.J. 1159, § 4; 12 C.J.S., Cancellation of Instruments, § 2, p. 943.

The incontestability clause provided 'This policy shall be incontestable after two years from its date of issue, except for non-payment of premium, * * *.' The policy was executed December 1, 1938, and after December 1, 1940, the appellee would not have been able to have defeated an action brought on the policy by reason of the fraudulent misrepresentations of the insured. The beneficiary could have delayed commencing an action on the policy until after this time, and in the instant case she in fact did not file her cross...