Mutual Life Ins. Co. of N.Y. v. Brunson

Decision Date14 December 1944
Docket Number4 Div. 347.
Citation20 So.2d 214,246 Ala. 233
PartiesMUTUAL LIFE INS. CO. OF NEW YORK v. BRUNSON.
CourtAlabama Supreme Court

Appeal from Circuit Court, Coffee County; C. C. Brannen Judge.

Douglas Arant and Ellene Winn, both of Birmingham J. M. Rowe, of Montgomery, and Bradley Baldwin, All & White, of Birmingham, for appellant.

J. C. Fleming, of Elba, for appellee.

FOSTER Justice.

This suit was begun at law by appellee, by his next friend, claiming disability benefits under a policy of life insurance on his own life. Plaintiff had caused his mother to be named the beneficiary after the death of the beneficiary first named. Plaintiff's disability claim was on account of his alleged insanity, which he claims existed when he designated his mother as beneficiary, and therefore that the designation was void. His mother was named in the action as his next friend.

On account of default in the payment of a premium, which later occurred, and pursuant to the terms of the policy, and with the consent of the plaintiff, the company made an endorsement on the policy to the effect that it should operate as term insurance for six years and one hundred and forty-six days as non-participating paid up insurance without double indemnity or disability payments.

The trial court ordered a transfer to equity without either party filing petition to do so. Thereupon plaintiff filed a bill in equity with a different next friend, and with his mother as a respondent. She is not contesting it. In it he seeks a cancellation of the designation of his mother as beneficiary, and a cancellation of the endorsement changing the beneficiary and converting the policy to term insurance, and a personal judgment in his own favor for the disability benefits. The insurer demurred and that demurrer was overruled. It is now assigned as error, also the order removing the cause to equity.

The disability benefits by reason of insanity were payable to his mother if the designation of her as beneficiary is valid; but to him if it is invalid on account of his insanity. So that in his suit at law, he could show the invalidity of the designation (see, Metropolitan Life Ins. Co. v. Bramlett, 224 Ala. 473, 140 So. 752), and thereby recover the benefits if there are any, payable under the policy, and a cancellation of it in equity would not be necessary.

The bill seeks not only a cancellation of such designation but also of the endorsement for the term insurance. The endorsement designating the policy as term insurance resulted from a failure to pay the premium due March 29, 1931. The plaintiff claims that at that time he was insane and totally disabled from pursuing a gainful occupation on account of such insanity, of which he had furnished the necessary proof.

The equity of the bill, if it has equity, is to cancel the designation of his mother as beneficiary and the endorsement on the policy making it term insurance. A court of equity will generally exercise its jurisdiction to cancel a contract made by an insane person when there is no adequate remedy at law available. White v. Hale, 234 Ala. 385, 175 So. 288; Cox v. Parker, 212 Ala. 35, 101 So. 657; 12 C.J.S., Cancellation of Instruments, § 26, p. 975.

He cannot ordinarily pursue an equitable remedy for that purpose unless his remedy at law is inadequate. National Life & Accident Ins. Co. v. Propst, 219 Ala. 437, 122 So. 656; Pacific Mut. Life Ins. Co. v. Strange, 226 Ala. 98, 145 So. 425; All States Life Ins. Co. v. Jaudon, 230 Ala. 593, 162 So. 668; Citizens Ins. Co. v. Mathis, 233 Ala. 146, 170 So. 481; American Life Ins. Co. v. Stewart, 300 U.S. 203, 57 S.Ct. 377, 81 L.Ed. 605, 111 A.L.R. 1268.

But in such cases 'the issue is not one of jurisdiction but of the need and propriety of equitable relief.' Atlas Life Ins. Co. v. W. I. Southern, Inc., 306 U.S. 563, 59 S.Ct. Ct. 657, 661 (12-15), 83 L.Ed. 987.

With respect to the designation of his mother as beneficiary, plaintiff did have a right in his suit at law, by showing his mental incapacity at that time, to make such designation and thereby defeat its effect so as to enable him to be entitled to recover the disability benefits in his own name and at law.

But there was no ground of demurrer taking the point that the remedy at law is adequate in that respect.

But the bill seeks also a cancellation of the endorsement on the policy making it term insurance, and his recovery in an action at law would not have the effect ipso facto of cancelling that endorsement, whereas if it is the result of his mental incapacity he has the equitable right to have the endorsement cancelled, and the policy restored to its original status.

In fact the decree of the court overruling the demurrer recites the fact that 'respondent concedes in argument that if insured was insane during the entire period for which he claims disability, he can state a cause for equitable relief.' We believe that he has stated such a cause for equitable relief insofar as it seeks a cancellation of the endorsement upon the policy changing its tenor as above indicated, and the demurrer for want of equity was properly overruled.

We need not inquire definitely whether the failure of the respondent to demur to the bill on the ground that the plaintiff had an adequate remedy at law insofar as his right to cancel the designation of the beneficiary is concerned, is sufficient to justify a court of equity in exercising its jurisdiction to cancel such an instrument when there is in existence an adequate remedy at law.

The other grounds of demurrer do not seem to need discussion. There was no reversible error in transferring the cause to equity by the judge under authority of section 151, Title 13, Code.

The cause went to trial on the issue of total and permanent insanity. The evidence was taken by deposition, resulting in a decree granting full relief to complainant.

The policy bore date of issue, March 29, 1928. The premium was payable semiannually on the 29th of September and March thereafter. The payments were met through March 29, 1930. The beneficiary named in the policy was J. (James) C. Brunson, father of the insured. It contained a disability clause, not now reciting other stipulations, that, 'if before attaining the age of sixty years and while no premium on this policy is in default, the insured shall furnish to the company due proof that he is totally and permanently disabled, as defined above, the company will grant' the benefits.

Total disability is defined as 'any impairment of mind or body which continuously renders it impossible for the insured to follow a gainful occupation.' Permanent disability is thus defined: 'Total disability shall during its continuance be presumed to be permanent, (a) if such disability is the result of conditions which render it reasonably certain that such disability will continue during the remaining lifetime of the insured, or (b) if such disability has existed continuously for ninety days.'

As of the date of October 3, 1930, insured made a verified statement of claim for disability benefits for an illness stated to exist from April 1st to that date because of autointoxication. It was supported by an affidavit of Dr. E. T. Brunson that insured was diagnosed by him as having 'auto-intoxication, mild nephritis, mental derangement,' beginning in April 1930, 'but should recover.' Also an affidavit of Dr. Randolph, an alienist, of Jacksonville, Florida, to the effect that insured 'first consulted me July 15th, 1930: History of having been ill for several weeks preceding, consequent upon an attack or seizure in the nature of a heat stroke following exposure on a fishing trip; illness being characterized by,--headache; fever (?), confusion; and general physical and mental disability. At time of consulting me there was slight elevation of temperature Bradycardia; exaggerated reflexes; and vasa-motor instability; mild memory defect and some lack of insight. Blood and spinal fluid tests negative. Stool showed infection of Uncinaria. (Ankylestemiasis.) Physical findings, giving dates and full details: Under direct care and treatment for 6-8 weeks; and has been reporting at intervals since; making steady improvement after about first fortnight; and is today practically discharged as 'cured,' and dismissed from further treatment except for mild thyroid medication in an effort to slightly reduce weight.'

Insurer thereupon paid insured the benefits for four months ending October 10th, and waived the premium due September 29, 1930. Insured did not thereafter receive treatment for such trouble nor consult a physician concerning it until 1936, when he had another breakdown.

There was default in the payment of the premium due March 29, 1931 whereby insured became entitled to certain option rights, which he failed to exercise. The company on July 20, 1931, wrote insured and requested him to send the policy for endorsement to indicate that thereafter for a designated period it would continue as paid-up, non-participating term insurance without double indemnity or disability payments as provided in it. Insured complied by writing a letter and sending the policy. On August 3, 1931, that endorsement was made and the policy returned to him, which he retained without objection. On May 26, 1933, his father, who had been named as beneficiary, died. On December 12, 1934, insured signed a designation of his mother as the changed beneficiary, which he sent to the company with the policy, and the company endorsed such change on it and sent it back to insured. Except for the change of beneficiary, supra, there seems to have been no communication between them concerning this policy until insured's attorney wrote insurer in 1938 making claim for benefits under the...

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8 cases
  • Wilkey v. Aetna Life Ins. Co.
    • United States
    • Alabama Supreme Court
    • 29 Mayo 1959
    ...v. Torrance, 224 Ala. 614, 141 So. 547; Mutual Benefit Health & Accident Ass'n v. Bain, 242 Ala. 471, 6 So.2d 599; Mutual Life Ins. Co. [of N. Y.] v. Brunson, 246 Ala. 233, (12 and 13), 20 So.2d It is apparent that the charges with which we are here concerned attempt to hold the plaintiff t......
  • New York Life Ins. Co. v. Stokes
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    ... ... We ... do not understand the case of John Hancock Mutual Life ... Ins. Co. v. Large, 230 Ala. 621, 162 So. 277, to hold ... that such a decree is so ... fact. We discussed a similar question in Mutual Life Ins ... Co. of New York v. Brunson, 246 Ala. 233, 20 So.2d ... We do ... not think that an action at law may be maintained ... ...
  • Dillard v. Gill, 8 Div. 552
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    • 22 Junio 1950
    ...when properly sustained by averment. If not properly sustained, the demurrer should point out the omission. Mutual Life Ins. Co. of New York v. Brunson, 246 Ala. 233(3), 20 So.2d 214. There is also a prayer for general relief. The court has the power to mold the relief to meet the equities ......
  • Pan Coastal Life Ins. Co. v. Malone, 8 Div. 995
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    • 20 Agosto 1959
    ...v. Torrance, 224 Ala. 614, 141 So. 547; Mutual Benefit Health & Accident Ass'n v. Bain, 242 Ala. 471, 6 So.2d 599; Mutual Life Ins. Co. [of N. Y.] v. Brunson, 246 Ala. 233, (12 and 13), 20 So.2d See, also, Wilkey v. Aetna Life Ins. Co., Ala., 113 So.2d 458. Writ denied. LAWSON, SIMPSON and ......
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