Jensen v. New York Life Ins. Co.

• Decision Date: 02 May 1932
• Docket Number: 9267.,No. 9018,9266,9018
• Citation: 59 F.2d 957
• Parties: JENSEN et al. v. NEW YORK LIFE INS. CO. NEW YORK LIFE INS. CO. v. JENSEN. CHRISTENSEN v. NEW YORK LIFE INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

59 F.2d 957 (1932)

JENSEN et al. v. NEW YORK LIFE INS. CO.

NEW YORK LIFE INS. CO. v. JENSEN.

CHRISTENSEN v. NEW YORK LIFE INS. CO.

Nos. 9018, 9266, 9267.

Circuit Court of Appeals, Eighth Circuit.

May 2, 1932.

C. C. Fraizer, of Aurora, Neb. (Craft, Edgerton & Fraizer, of Aurora, Neb., on the brief), for Christian P. Jensen and Antomine Christensen.

William C. Michaels and Kenneth E. Midgley, both of Kansas City, Mo. (C. A. Randolph, of Kansas City, Mo., Louis H. Cooke, of New York City, Meservey, Michaels, Blackmar, Newkirk & Eager, of Kansas City, Mo., and R. M. Switzler, of San Diego, Cal., on the brief), for New York Life Ins. Co.

Before KENYON, VAN VALKENBURGH, and GARDNER, Circuit Judges.

VAN VALKENBURGH, Circuit Judge.

This case was before us at the March term, 1931, at Kansas City, under the title Christian P. Jensen et al., Appellants, v. New York Life Insurance Company, Appellee, No. 9018. That hearing resulted in the following order:

"This cause came on to be heard on the transcript of the record from the District Court of the United States for the District of Nebraska, and was argued by counsel.

"On Consideration Whereof, and in accordance with the opinion of this court filed herein, It is now here ordered by this court that leave be, and is hereby, granted to appellants, defendants below, to make a motion to the said District Court to open the case and allow reframing of the pleadings so as to present the issues of the existence of the alleged final judgment in the state court, and the effect thereof upon the suit in the Federal Court; and leave is hereby granted to said District Court to hear, consider and decide such motion; and if, upon consideration of the evidence and the arguments of the respective parties on that motion, said District Court decides to grant said motion, then thereafter to admit such competent and relevant evidence as any of the parties to this suit may present relative to the existence of the alleged final judgment in the State Court and the effect thereof upon the present cause in the Federal Court; and thereafter to consider and determine the case upon the record thereof thus supplemented. Meanwhile, the present appeal will remain in this court.

"It is further ordered by this court that a certified copy of this order be forthwith transmitted to the said District Court.

"May 9, 1931."

The opinion upon which this order was based is found in 50 F.(2d) 512, to which reference is made for the facts before this court at that hearing. As therein stated, the original appeal was retained in this court; the cause having been remanded to the trial court, and leave having been granted to Jensen to apply to that court to reopen the case for the filing of a supplemental pleading and the introduction of evidence on the issue as to the effect of the judgment in the state court. For a better present understanding of the controversy now presented, the chronology of the crucial facts will be restated. Jensen's application for a policy was made January 7, 1928; January 13, 1928, he was examined by the company's physician. January 15, 1928, he was gored by a bull and suffered the injuries resulting in the disabilities because of which he makes claim for disability benefits. February 12, 1928, the policy was delivered to Jensen by one Tucker, the soliciting agent for the insurance company, who procured the application from Jensen. It is not contended that any officer of the insurance company had knowledge of the accident, nor of the treatment given by a physician on January 15, 1928, prior to the delivery of the policy, until it received Jensen's claim papers December 22, 1928. Tucker, the soliciting agent, had such knowledge prior to his delivery of the policy February 12, 1928. January 31, 1929, after investigation, the New York Life Insurance Company gave formal notice to Jensen and his beneficiary, Antomine Christensen, that, because he had been treated by a physician for an accident between the date of his examination and the date of the delivery of the policy, the policy of insurance applied for never took effect. The premium theretofore paid was tendered back. April 29, 1929, the insurance company brought this suit to cancel the policy upon the grounds above recited. As stated in our former opinion:

"An answer was interposed, setting up, among other matters, a plea in abatement based upon a suit commenced by Jensen against appellee, five days after the commencement of the present suit. The later suit was brought in the state district court of Hamilton county, Neb. The plea in abatement alleged that the suit in the state court involved the issue whether the insurance under the policy ever took effect; that a decree had been entered in the state court suit in favor of Jensen; but that the Insurance Company had appealed from the decree to the state Supreme Court, where the cause was still pending. This plea in abatement was overruled.

"On the merits, the lower court found the facts in favor of the plaintiff Insurance Company, and entered a decree canceling the policy. * * *

"Upon the hearing of the appeal in this court, counsel for appellant has advised us that the appeal in the state Supreme Court has been determined, and that the judgment in the state court in favor of Jensen has become final.

"If such be the fact, then the question arises whether that final judgment in the state court is pleadable in bar in the present suit in the federal court.

"It is important that these matters should be considered before the final determination of the present suit now pending in this court on appeal.

"These matters, however, cannot properly be determined by this court upon the present record; so that the question of appropriate further procedure must be considered." Jensen v. New York Life Ins. Co. (C. C. A. 8) 50 F.(2d) 512, 513.

A consideration of this situation as set forth in our opinion, 50 F.(2d) loc. cit. 514 et seq. resulted in the remand order hereinabove set forth. The defendant below duly filed in the District Court a motion to reopen the case and to be allowed to reform his pleadings in order to present the issue of the existence of the alleged final judgment in the state court and its effect upon the suit in that court and in this court. This motion was granted, and issues were framed accordingly. Subsequent proceedings in the District Court resulted in the following decree June 22, 1931:

"It is therefore ordered and decreed, that the decree heretofore entered in this suit June 27, 1930, be vacated and set aside as between the plaintiff in this suit and the defendant Christian P. Jensen, and that each of these parties pay his own costs herein expended and that the decree as heretofore entered shall stand as between the plaintiff and the defendant Antomine Christensen. An exception is allowed to each finding."

From this decree the appeals in Nos. 9266 and 9267 were taken.

February 15, 1932, while these appeals were pending in this court, the Supreme Court decided the case of Realty Acceptance Corporation v. Montgomery, 284 U. S. 547, 52 S. Ct. 215, 76 L. Ed. 476. The facts, proceedings, and final decision in that case are best presented by quotations from the opinion as follows:

"The petitioner complains of two orders entered by the Circuit Court of Appeals, one which reversed an order of the District Court setting aside a judgment entered at an earlier term and granting a motion for new trial for the purpose of considering certain newly discovered evidence as to damages, and the other, which vacated its own order previously entered dismissing an appeal from the same judgment and remanding the cause so that the District Court might, in the exercise of its discretion, grant such new trial.

"At the March term, 1929, respondent recovered judgment against petitioner for the breach of a contract of employment. An appeal was perfected to the Circuit Court of Appeals, was heard in that court subsequent to the expiration of the term of the District Court, and resulted in an affirmance, 51 F.(2d) 642. Petitioner filed a motion for rehearing, and before disposition thereof presented a petition setting forth that at trial the respondent had failed to disclose certain earnings of which he had been in receipt which should have been taken into account in mitigation of damages; that these facts had been discovered after appeal from the judgment; that the mandate of the Court of Appeals should be stayed to afford the District Court opportunity, if it thought proper, to request the return of the record so that the judgment could be opened and, if justice should so require, a new trial be granted on the issue of the quantum of damages. This petition was granted, respondent applied to the District Court, and that court requested the Court of Appeals to return the record for the purpose mentioned. Thereupon the latter court made an order vacating its affirmance of the judgment and dismissing the appeal, thus returning the record to the District Court, which then entertained a motion for a new trial, found the evidence newly discovered within the applicable rule of law, set aside the judgment, and granted a new trial. Respondent then appealed to the Circuit Court of Appeals, assigning this action as error. The latter court held that except for its own orders the District Court would have been without authority to set aside the judgment after the term had expired; that no additional power had been conferred upon the trial court by the previously recited orders in the appellate proceedings; and that there had been error in dismissing the first appeal. Accordingly it reversed the District Court's order granting a new trial, revoked its own order dismissing the first appeal, overruled the petition for a rehearing therein, and reinstated the order affirming the original judgment of the District Court. * * *

"The claim is that section 701 of the Revised Statutes (28 USCA ß 876), which...