Mutual Life Ins. Co. v. Thompson

• Decision Date: 23 July 1928
• Citation: 27 F.2d 753
• Parties: MUTUAL LIFE INS. CO. v. THOMPSON et ux.
• Court: U.S. District Court — Western District of Virginia

27 F.2d 753 (1928)

MUTUAL LIFE INS. CO. v. THOMPSON et ux.

District Court, W. D. Virginia.

July 23, 1928.

Martin & Wingfield, of Roanoke, Va., for plaintiff.

R. O. Crockett and James W. Harman, both of Tazewell, Va., for defendants.

McDOWELL, District Judge.

The bill, filed January 21, 1928, shows diversity of citizenship, and prays for the cancellation of two combined life and accident insurance policies, which were issued by the plaintiff, respectively, on January 28 and March 5, 1927. The amount of insurance in each policy is $5,000 for death from what may conveniently be called natural causes, and $10,000 for death from accidental causes. The ground for relief is the allegation that the insured made false statements concerning his health in the application for the first policy, and that the second policy was issued on the same application. The wife of the insured is the beneficiary named in the first policy. The second policy is payable to the executors, administrators, or assigns of the insured. In other respects, except as to the dates, the two policies are alike. In the policies is a provision giving the insured, by consent of the insurer, a right to change the beneficiary. In the bill it is alleged that by their terms the policies will become incontestable after one year from the date of issue. The defendants are the insured and his wife. Copies of the policies and the applications are exhibited with the bill.

The ground of the motion to dismiss is that the bill does not show that the value of the matter in controversy is sufficient. In a suit of this character, the value of the object sought by the bill, relief from the plaintiff's liability, is the amount in controversy. Mississippi & Missouri Railroad Co. v. Ward, 2 Black, 485, 492, 17 L. Ed. 311; Hunt v. N. Y. Cotton Exchange, 205 U. S. 322, 336, 337, 27 S. Ct. 529, 51 L. Ed. 821; Bitterman v. Louisville & Nashville R. Co., 207 U. S. 205, 225, 28 S. Ct. 91, 52 L. Ed. 171, 12 Ann. Cas. 693; Berryman v. Whitman College, 222 U. S. 334, 346, 32 S. Ct. 147, 56 L. Ed. 225; Glenwood Light & Water. Co. v. Mutual Light, Heat & Power Co., 239 U. S. 121, 125, 36 S. Ct. 30, 60 L. Ed. 174; Packard v. Banton, 264 U. S. 140, 142, 44 S. Ct. 257, 68 L. Ed. 596; First National Bank of Columbus, Ohio, v. Louisiana Highway Comm., 264 U. S. 308, 310, 44 S. Ct. 340, 68 L. Ed. 701.

Unless there has been here a misjoinder of causes of action, the value of relief from the contingent liability created by both the policies should be regarded as the amount in dispute. And I believe the bill does not show a misjoinder of causes of action. Mrs. Thompson has no interest in the last policy, but she is an indispensable party in respect to the first policy. The joinder of the plaintiff's two causes of action in one suit is highly convenient and economical to the plaintiff and to W. A. Thompson, and it does not appear to be inconvenient, or expensive, or in any way detrimental to Mrs. Thompson. So far as I can foresee, all of the evidence which will be admissible in behalf of the plaintiff will apply to both policies, and all evidence admissible in behalf of either defendant will also apply to both policies. See equity rule 26 (see title 28, § 723); 1 Street's Fed. Eq. §§ 414, 428; Hale v. Allinson, 188 U. S. 56, 77, 23 S. Ct. 244, 47 L. Ed. 380; Bitterman v. Louisville & Nashville R. Co., 207 U. S. 205, 226, 28 S. Ct. 91, 52 L. Ed. 171, 12 Ann. Cas. 693; Barcus v. Gates (C. C. A. 4th) 89 F. 783, 791; Pacific Live Stock Co. v. Hanley (C. C.) 98 F. 327, 329; Westinghouse Air Brake Co. v. Kansas City Southern Ry. Co. (C. C. A.) 137 F. 26, 31, 32; Dobie, Fed. Proc. p. 162.

Notwithstanding the fact that the burden of proving want of federal jurisdiction in suits originally brought in the federal court has been put on the defendant (Hunt v. New York Cotton Exchange, 205 U. S. 322, 333, 27 S. Ct. 529, 51 L. Ed. 821; Big Sespe Oil Co. v. Cochran C. C. A. 276 F. 216, 219, 220; Auto Acetylene Light Co. v. Prest-O-Light Co. C. C. A. 276 F. 537, 539; Atchison, T. & S. F. Ry. Co. v. Phillips D. C. 13 F.2d 254, 255; Rose, Fed. Juris. 3d Ed. § 224), it is still necessary that the plaintiff shall in his pleading, or in his pleading and exhibits, affirmatively and positively allege facts which, if true, show that federal jurisdiction exists (Norton v. Larney, 266 U. S. 511, 515, 45 S. Ct. 145, 69 L. Ed. 413; Smith v. McCullough, 270 U. S. 456, 459, 46 S. Ct. 338, 70 L. Ed. 682; Rose, Fed. Juris. 3d Ed. §§ 8, 490; Dobie, Fed. Proc. pp. 26, 175, 670).

In the bill here it is said: "The plaintiff further alleges that the matter in controversy herein exceeds, exclusive of interest and costs, the sum or value of three thousand dollars." This allegation could be a conclusion of law, based on an erroneous construction of section 24, Judicial Code (28 USCA § 41), and nothing else. If the draftsman had the opinion that the maximum contingent liability stated in the two policies constituted the amount in controversy, the allegation could be a mere statement of this (erroneous) conclusion of law. But it could have been intended as a statement of fact. It is a sound rule of pleading, especially on motion to dismiss, that ambiguities and uncertainties in pleadings are to be construed most strongly against the pleader. United States v. Linn, 1 How. 104, 110, 111, 11 L. Ed. 64; Cambers v. First National Bank (C. C.) 144 F. 717, 719; Id. (C. C. A.) 156 F. 482, 484; Continental Securities Co. v. Interborough R. T. Co. (C. C.) 165 F. 945, 955; Chunes v. Duluth, W. & P. Ry. Co. (D. C.) 292 F. 153, 154; In re Moscovitz (D. C.) 4 F.(2d) 873, 874; Lyons v. Reinecke (C. C. A.) 10 F.(2d) 3, 7; 31 Cyc. 78, 79; 21 Corpus Juris, 393, 394; 10 R. C. L. 415; 21 R. C. L. 465. Construed against the pleader, the above-quoted allegation cannot be considered as a statement of fact, and the allegations that remain do not show that the value of the object sought by the plaintiff exceeds $3,000.

The value of relief from the contingent liability shown by the policies here cannot, so far as I know, be determined by any rule of law, or by any fact of which courts take judicial notice. No fact stated in the bill, if true, shows that the value of the object sought exceeds $3,000. In so far as the policies provide for accidental death, the object sought might be without pecuniary value. Nothing stated in the bill shows that the insured is in the least degree more liable to accidental injury than is the average man of his age. To an insurance company, engaged in accident insurance, the policies here (in so far as they are merely accident policies) might easily be assets rather than liabilities. And, in so far as they are life insurance policies, the liability of the plaintiff is contingent. For a failure to pay either the second or the third annual premium all rights under the policies will be absolutely forfeited, and there would be no...