Franklin Life Ins. Co. v. Ward

• Decision Date: 09 February 1939
• Docket Number: 7 Div. 545.
• Citation: 187 So. 462,237 Ala. 474
• Parties: FRANKLIN LIFE INS. CO. v. WARD.
• Court: Alabama Supreme Court

187 So. 462

237 Ala. 474

FRANKLIN LIFE INS. CO. v. WARD.

7 Div. 545.

Supreme Court of Alabama

February 9, 1939

Rehearing Denied March 30, 1939.

Appeal from Circuit Court, Cherokee County; A. E. Hawkins, Judge.

Action in assumpsit by the Franklin Life Insurance Company against C. P. Ward, Jr., individually and as administrator of the estate of C. P. Ward, Sr., deceased, for money paid by plaintiff by mistake on a life insurance policy. From a judgment for defendant, plaintiff appeals.

Reversed and remanded.

An insurer could recover amount paid on life policy because of insurer's mistaken belief that policy provided for the lump sum payment made by insurer to insured, notwithstanding that insurer had imputable knowledge of provisions of policy.

Plea 2 is as follows: "As a further defense to this action defendants say that the money sued for in this action was received by defendant in the payment and discharge of a contract of insurance upon the life of Charles P. Ward, Sr. such insurance contract having been made by the plaintiff in Cherokee County, Alabama, and such money in payment of plaintiff's liability under such insurance contract, was received by defendant in Cherokee County, Alabama, and that at the time such insurance contract was made and such money received by the defendant that plaintiff was and is a foreign corporation with its domicile in the State of Illinois, and had not complied with the provisions of section 232 of the Constitution of the State of Alabama, nor of the statutes of this State relating to the right of foreign corporations to do business in this State as contained in Article 26 of Chapter 274 of the Code of Alabama of 1923."

Plea 3 alleges: "That the matters and things of which plaintiff complains arose out of certain transactions between it and Charles P. Ward, Sr., now deceased, and Charles P. Ward, Jr. as the administrator of the estate of Charles P. Ward, Sr. now deceased, and that the plaintiff was and is a foreign corporation, with its domicile in the State of Illinois," &c.

It is further averred, in substance, that plaintiff may not maintain this action for that it had not qualified to do business in Alabama. Other pleas mentioned in the opinion are pertinently similar to the foregoing.

Replication 2 is as follows: "Plaintiff says that the causes of action upon which counts 1 and 2 of the complaint are respectively based are substantially as follows: That plaintiff, by mistake, paid to the defendant, Charles P. Ward, Jr., in a lump sum the amount of five thousand ($5,000.00) dollars, the face amount of a certain insurance policy issued by plaintiff to Charles P. Ward, on September 22, 1904, insuring the life of the said Charles P. Ward, instead of paying him one hundred and twenty-five ($125.00) dollars, the first of twenty annual installments each in said amount of one hundred and twenty-five dollars ($125.00) in conformity to the stipulations, recitals and agreements contained in said policy, a true and correct copy of which is attached hereto as Exhibit 'A' and made a part hereof as fully as if herein set out; that by the terms of said policy the said Charles P. Ward agreed to pay annually, premiums for nineteen years after the first premium had been paid, at the home office of plaintiff in the City of Springfield, Illinois, each premium to be in the amount of one hundred forty-three and 20/100 ($143.20) dollars, and upon the payment of all of which said policy became fully paid, insofar as the payment of any more premiums were required, and the contract of insurance, as set out in the policy, became fully executed, the payment by plaintiff of dividends thereafter to be earned on it as a paid up policy, and the payment of the amount of the insurance, when and as provided in said policy, upon the death of the said Charles P. Ward alone remaining; that upon said policy having become fully paid, that is, each of the annual premiums having been paid, and on the death of the said Charles P. Ward said policy was ultimately payable in the amount of five thousand ($5,000.00) dollars, of which amount the first twenty-five hundred ($2,500.00) dollars was payable in annual installments of one hundred and twenty-five ($125.00) dollars each for the first twenty successive years after the death of the said Charles P. Ward, including the year of his death, the first said installment being payable within the first year after receipt of proof of death of the said Charles P. Ward, and upon the completion of the payment of said twenty annual installments, the balance of said five thousand dollars ($5,000.00) was to be paid in a lump sum of twenty-five hundred ($2,500.00) dollars, all as set out on the first page of said policy and all of which said annual installments and said twenty-five hundred ($2,500.00) dollars were payable at the home office of the plaintiff in the City of Springfield, Illinois; that the said Charles P. Ward died on April 27, 1936, and thereafter on May 11, 1936, at its home office in Springfield, Illinois, plaintiff drew and issued its check on the Illinois National Bank, Springfield, Illinois, payable to C. P. Ward, Jr., as the administrator of the estate of Charles P. Ward, Sr., in the amount of five thousand ($5,000.00) dollars and caused it to be transmitted to the said C. P. Ward, Jr., at Centre, Alabama, who endorsed said check and deposited it in a bank at Centre, Alabama, and thereby caused it to be transmitted to Springfield, Illinois, and to be collected from said Illinois National Bank at Springfield, Illinois; that the issuance of said check in said amount of five thousand ($5,000.00) dollars by the plaintiff was the result of a mistake of fact, the person drawing said check not knowing at the time that said policy was payable in installments, as hereinbefore set out, and understanding and believing at the time that it was payable in the lump sum of five thousand ($5,000.00) dollars upon receipt of proof of the death of the said Charles P. Ward, issued said check in said amount of five thousand ($5,000.00) dollars instead of in the amount of one hundred and twenty-five ($125.00) dollars and caused it to be transmitted to the defendant, C. P. Ward, Jr.; that plaintiff did not intend to waive the payment of said first twenty-five hundred ($2,500.00) dollars in said installments by making said lump sum payment, but, as aforesaid, said payment was made by mistake; that said policy had become fully paid on September 23, 1923, no other premiums being payable thereafter by the said Charles P. Ward, and nothing else to be done by him to maintain said policy in full force and effect and that all that remained to be done by the plaintiff was to pay, at its home office at Springfield, Illinois, to the said Charles P. Ward, the dividends thereafter earned on said policy, as in it provided, and to pay at the death of said Charles P. Ward the amount of said policy, when, in the manner and as in it provided; that in said policy is contained this express stipulation: 'This policy and the application therefor, shall be governed and interpreted by the law of the State of Illinois'; that in issuing said five thousand ($5,000.00) dollar check, plaintiff's servant or agent who issued it understood and believed at the time that the amount of five thousand dollars ($5,000.00) in a lump sum was payable at that time on or under said policy and so issued it with said understanding and belief, and that she did not know and did not understand that only one hundred and twenty-five ($125.00) dollars was at that time payable as the first annual installment and that for each of the succeeding nineteen annual installments only one hundred and twenty-five dollars was payable under the policy, and did not thereby intend to waive the payment of said first twenty-five

hundred ($2,500.00) dollars in said installments, and that after said twenty annual one hundred and twenty-five dollar installments had been paid, the balance in the amount of twenty-five hundred ($2,500.00) dollars would be payable; hence plaintiff by mistake of fact paid the defendant four thousand eight hundred and seventy-five ($4,875.00) dollars in excess of the amount due and payable at that time, which amount plaintiff seeks to recover in said two counts of the complaint."

The judgment entry recites: "* * * No jury having been demanded for the trial of this cause the court proceeded to try the same without the intervention of a jury. After hearing the evidence the court decides the issues in favor of the defendant. It is therefore ordered by the court that the defendant go hence and recover of the plaintiff all costs in this behalf expended for which let execution issue."

Roger C. Suttle and O. R. Hood, both of Gadsden, for appellant.

Irby A. Keener and Reed & Reed, all of Centre, for appellee.

THOMAS Justice.

The suit was in common counts to recover money paid by mistake on a life insurance policy. The plaintiff directed replications to defendant's special pleas, and demurrers to the replications were overruled.

The issues were joined upon defendant's pleas 1 to 7 as an answer to the complaint, and on plaintiff's replications directed to the respective pleas.

Replication 2 sets out plaintiff's cause of action for the recovery of the money paid by mistake and the policy of insurance in question was made a part thereof by exhibit. Grimsley v. First Avenue Coal & Lumber Co., 217 Ala. 159, 115 So. 90.

The rule of good pleading is that in a suit at law the plaintiff (1) must prevail, if at all, upon the facts stated in his complaint; the defendant upon those stated in the pleas: and (2) whatever the parties may respectively allege in their subsequent pleadings "must go to fortify the declaration or complaint on...