Mutual Life Ins. Co. of New York v. Burton

• Decision Date: 23 June 1934
• Citation: 72 S.W.2d 778,167 Tenn. 606
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. BURTON.
• Court: Tennessee Supreme Court

72 S.W.2d 778

167 Tenn. 606

MUTUAL LIFE INS. CO. OF NEW YORK v. BURTON.

Supreme Court of Tennessee.

June 23, 1934

Appeal from Chancery Court, Shelby County; D. W. De Haven Chancellor.

Suit by the Mutual Life Insurance Company of New York against Annie J. Burton, who filed a cross-bill. A decree for complainant was affirmed by the Court of Appeals, and defendant appeals.

Decree of Court of Appeals reversed, and case remanded to chancery court.

McCormick & Graves, of Memphis, for appellant.

Fitzhugh Murrah & Fitzhugh, of Memphis, for appellee.

SWIGGART Justice.

By its original bill in the chancery court of Shelby county the Mutual Life Insurance Company sought to rescind and cancel a contract of life insurance for misrepresentations and fraud in its procurement. The defendant, Mrs. Annie J. Burton, named beneficiary, filed her cross-bill, seeking a decree for the amount of the insurance, and demanded a jury to try the issues of fact.

Responding to the issues submitted, the jury found that the insured Edward W. Burton, was in good health at the time he applied for the insurance and at the time the contract was delivered to him.

Issue No. 7 was as follows: "Did Edward W. Burton state, in answer to question 17 in his application, every physician and practitioner consulted during the period of five years preceding the application, and the dates of consultation?"

With respect to this issue the chancellor sustained the complainant's motion for a directed verdict, and instructed the jury to answer in the negative.

At the conclusion of the trial, and after the jury's verdict had been rendered, the chancellor sustained complainant's motion for a new trial and granted a new trial. Thereafter, and in the same minute entry, the chancellor decreed as follows:

"And thereupon the case came on further to be heard on motion of complainant, Mutual Life Insurance Company of New York, for a decree on the undisputed evidence and on the holding and direction of the Court as to issue No. 7 and the finding thereon and the Court being of the opinion that Edward W. Burton, applicant for the insurance policy, made false representations in answer to questions Nos. 17 and 19 in the application, that said misrepresentations related to material matters, and such misrepresentations constituted valid and sufficient grounds for cancellation of the policy as prayed for in the original bill, it is accordingly ordered, adjudged and decreed by the court that said motion for a decree in favor of the complainant be and the same is hereby sustained."

The defendant and cross-complainant moved for a decree in her favor, on the verdict of the jury, which was denied. She thereupon appealed to the Court of Appeals. That court overruled a motion to dismiss her appeal, because she had made no motion for a new trial with respect to issue No. 7. The Court of Appeals ruled that the action of the chancellor in granting a new trial as to the other issues, without including the verdict on issue No. 7, was void, under the rule stated in Wright v. Jackson Const. Co., 138 Tenn. 145, 196 S.W. 488, and that cross-complainant was entitled to prosecute her appeal, without having made a motion for a new trial, to test the ruling of the chancellor that issue No. 7 was a determinative issue. The court then held that issue No. 7 was a determinative issue, and that the action of the chancellor in directing a negative verdict imports a conclusion by him that "the consultations had by the insured were of such a nature as would render false his answer to the questions in the application with respect thereto, when those questions are given the meaning ascribed to them in this state by judicial construction." The court then declined to examine the evidence, preserved by bill of exceptions, to determine the nature or materiality of the consultations not disclosed by the insured, because cross-complainant had not made motion for a new trial. The decree of the chancellor was accordingly affirmed.

We have found no case wherein the effect to be given a directed verdict in a chancery court has been considered by this court.

While the practice of trial by jury has been established in the chancery court by statute, which prescribes that the findings of the jury shall have the same force and effect as at law (Code, § 10579), the nature of a jury verdict in the chancery court is quite different from that of a verdict in a law court. This difference is clearly stated in Cooper & Stockell v. Stockard, 16 Lea (84 Tenn.) 140, 144, from which we quote: "The issues are made up under the directions of the court, and must set out the questions to be tried. In practice, these questions are literally questions propounded to the jury, which, in their verdict, they are required to answer affirmatively or negatively. They return no verdict in favor of the plaintiff for the money or thing sued for; but say such and such allegations or propositions are true or false. Then the chancellor, if he allows the verdict to stand, considers the facts found as true, and tries and determines the rights of the parties as he deems just and right, in view of the facts found. In other words, the jury report their opinion upon the questions submitted to them, and the chancellor tries and determines the suit between the parties upon the facts reported, and other facts before them, and the law governing the case."

In De Rossett Hat Co. v. Fire Ins. Co., 134 Tenn. 199, 207, 208, 183 S.W. 720, 722, the court said: "Where no material fact is in dispute, the right to a jury trial under that section does not exist, and when a court, in a cause where a jury trial has been applied for under that section and granted, submits to the jury an issue of fact not in dispute, it abdicates its own duty to adjudicate between the parties in respect of that undisputed fact, and when it thus surrenders its functions to the jury it goes beyond the law and is in error."

The preparation of issues of fact for submission to a jury is usually done prior to the examination of witnesses. In this way the materiality of evidence when offered is made apparent. But the issues are submitted to the jury at the close of the evidence, and, if the evidence has developed no dispute or controversy of fact, the matters to be determined are questions of law and not issues of fact. There is then nothing to be submitted to a jury, and under such circumstances we understand the practice to be that the chancellor discharges the jury, with an expression of thanks for their patience and a direction that they claim their fees in the clerk's office.

The practice of directing verdicts in the law courts was first held to conform to our constitutional restriction of the power of a judge to instruct a jury with respect to questions of fact, in the cases of Greenlaw v. Railroad, 114 Tenn. 187, 86 S.W. 1072, and Tyrus v. Railroad, 114 Tenn. 579, 86 S.W. 1074, 1077. The principle involved in the practice is thus stated in the latter case: "Where there is no controversy as to any material fact, there is nothing for the jury to find; the question is then solely one of law for the court, and in such a case the court may instruct the jury to return a verdict in accordance with his view of the law applicable to such ascertained or uncontroverted facts."

From this statement it is seen that, in directing a verdict in a court of law, the judge finds the facts himself, and instructs the jury to return their verdict in favor of that party whose position is sustained by the facts so found. The jury finds neither the facts nor the law, but takes both from the judge who instructs them. Motion for a new trial by the losing party is essential to review of such a verdict by an appellate court, not because of the interposition of a jury, but because the review is by appeal in the nature of a writ of error, and not by appeal as in courts of chancery. Railroad v. Johnson, 114 Tenn. 632, 88 S.W. 169; Weakley County Road Commissioners v. Railroad, 123 Tenn. 257, 130 S.W. 768; Bostick v. Thomas, 137 Tenn. 99, 191 S.W. 968.

Since the verdict of a jury in the chancery court has no further effect than as a finding of disputed or controverted facts, and the action of a judge or chancellor in directing a verdict is itself a finding of the material facts from uncontroverted evidence, it necessarily follows that the directed verdict has no place in chancery practice. There is no function it can serve. Whether requested so to do or not, it is the duty of the chancellor to withdraw, or decline to submit to the jury, an issue or "question" calling for a finding of fact as to which there is in the evidence no dispute or controversy. This is held in the ruling hereinabove quoted from De Rossett Hat Co. v. Fire Ins. Co., 134 Tenn. 199, 207, 183 S.W. 720.

The opinion filed by the Court of Appeals indicated that that court would have reached the conclusion we have reached, but felt bound otherwise by expressions...