Mutual Life Ins. Co. of New York v. Moyle, 4709.

• Citation: 116 F.2d 434
• Decision Date: 27 December 1940
• Docket Number: No. 4709.,4709.
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. MOYLE et ux.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

116 F.2d 434 (1940)

MUTUAL LIFE INS. CO. OF NEW YORK v. MOYLE et ux.

No. 4709.

Circuit Court of Appeals, Fourth Circuit.

December 27, 1940.

Pinckney L. Cain, of Columbia, S. C. (Thomas, Cain & Black, of Columbia, S. C., and Louis W. Dawson, of New York City, on the brief), for appellant.

Edward W. Mullins, of Columbia, S. C. (Paul A. Cooper, Roger M. Heyward, and D. McK. Winter, all of Columbia, S. C., on the brief), for appellees.

Before PARKER and SOPER, Circuit Judges, and WILLIAM C. COLEMAN, District Judge.

PARKER, Circuit Judge.

This is an appeal from an order dismissing the complaint in an action to obtain a declaratory judgment under 28 U.S.C.A. § 400. The ground of dismissal was that the action, in which the jurisdiction of the court was invoked on the ground of diversity of citizenship, did not involve the jurisdictional amount.

The plaintiff in the court below was an insurance company which had issued policies of life and disability insurance to the defendant Samuel B. Moyle, payable in the event of death to his wife, the defendant Mattie S. Moyle. The death benefits provided by the policies aggregated $20,000; but the monthly disability benefits aggregated only $200 per month. The complaint alleges that in the year 1933 plaintiff approved a claim filed by the insured, based on total and permanent disability, and thereafter waived premiums on the policies and paid the monthly disability benefits for which the policies made provision; that in April, 1940, plaintiff decided that the insured was no longer totally and permanently disabled within the meaning of the policies and notified him that disability premiums would no longer be paid thereunder and that he would be required to pay premiums to maintain them in force; that the insured contested this action of plaintiff, claiming that he was still totally and permanently disabled; that each of the policies involved was in full force and effect and was a present and valid obligation of plaintiff; and that plaintiff was entitled to declaratory relief adjudging the rights of the parties in the premises, in order that it might be advised as to their rights and obligations with respect to the payment of premiums and disability benefits. The complaint was filed and the summons issued on April 26, 1940. At that time no premiums were due, and the total amount of the disability payments to which insured would have been entitled under the policies on a finding of total and permanent disability was $200.

No controversy is alleged to exist as to the validity of the policies, but, on the contrary, plaintiff itself avers that they are valid obligations and are in full force and effect. Nor is there any controversy as to the meaning of the policies. They are attached to the complaint and plainly provide that, when it shall appear that the insured is no longer totally disabled, no further disability payments will be made or premiums waived. The contention that the jurisdictional amount is involved is based upon the fact that the life expectancy of the insured exceeds the period of 16 months, for which the disability payments would exceed the sum of $3,000, and that plaintiff under the laws of the State of New York is required to set up and carry, and does set up and carry, a reserve exceeding $3,000 against insured's claim.

We think it clear that all that is in controversy is the right of the insured to the disability payments which had accrued at the time of suit. The company is obligated to make these payments only so long as the condition evidencing total and permanent disability continues; and, as this condition, theoretically at least, may change at any time, it is impossible to say that any controversy exists as to any disability payments except such as have accrued. New York Life Ins. Co. v. Viglas, 297 U.S. 672, 56 S. Ct. 615, 80 L.Ed. 971; New York Life Ins. Co. v. Stoner, 8 Cir., 92 F.2d 845; United States Fidelity & Guaranty Co. v. McCarthy, 8 Cir., 33 F.2d 7, 13, 70 A.L. R. 1447; Metropolitan Life Ins. Co. v. Hobeika, D.C., 23 F.Supp. 1; Small v. New York Life Ins. Co., D.C., 18 F. Supp. 820. Such a case is to be distinguished from one where the controversy relates to the validity of the policy and not merely to liability for benefits accrued; for, in the latter case, the amount involved is necessarily the face of the policy in addition to the amount of such benefits. See Stephenson v. Equitable Life Assur. Soc., 4 Cir., 92 F.2d 406; Bell v. Philadelphia Life Ins. Co., 4 Cir., 78 F.2d 322; Pacific Mutual Life Ins. Co. v. Parker, 4 Cir., 71 F.2d 872.

It is well settled that, in a suit by the insured to recover disability benefits under policies such as we have here, the amount involved for purposes of jurisdiction is the amount of the disability benefits for which suit is brought. Equitable Life Assur. Soc. v. Wilson, 9 Cir., 81 F.2d 657. And this is true, although the probative effect of the judgment may be to establish the right of the insured to recover sums far in excess of the jurisdictional amount. Indeed the rule is applied with respect to suits to recover instalments of interest on bonds, where the recovery may be absolutely determinative of the right to recover in future cases. New England Mortgage Security Co. v. Gay, 145 U.S. 123, 12 S.Ct. 815, 816, 36 L.Ed. 646. In the case last cited the court said: "It is well settled in this court that, when our jurisdiction depends upon the amount in controversy, it is determined by the amount involved in the particular case, and not by any contingent loss either one of the parties may sustain by the probative effect of the judgment, however certain it may be that such loss will occur. * * * In Troy v. Evans, 97 U.S. 1 24 L.Ed. 941, action was brought to recover certain installments upon bonds, the aggregate of which bonds exceeded $5,000, but the judgment was for less. The case was dismissed, although it appeared that the judgment would be conclusive in another action upon future installments upon the same bonds. A like ruling was made in Elgin v. Marshall, 106 U.S. 578, 1 S.Ct. 484 27 L.Ed. 249, where a judgment was rendered for $1,660.75, against a town, on interest coupons detached from bonds which it had issued under a statute claimed to be unconstitutional. The case was dismissed in an elaborate opinion by Mr. Justice Matthews although it appeared that the judgment might be conclusive as an estoppel in any subsequent action upon other coupons, or upon the bonds themselves. So in New Jersey Zinc Co. v. Trotter, 108 U.S. 564, 2 S. Ct. 875 27 L.Ed. 828, an...