Prudential Insurance Company of America v. Ritchey
| Decision Date | 25 April 1918 |
| Docket Number | 23,263 |
| Citation | 119 N.E. 369,188 Ind. 157 |
| Parties | Prudential Insurance Company of America v. Ritchey |
| Court | Indiana Supreme Court |
Rehearing Denied March 13, 1919.
From Clarke Circuit Court; James W. Fortune, Judge.
Action by Mary Ritchey against the Prudential Insurance Company of America. From a judgment for the plaintiff, the defendant appeals. (Transferred from the Appellate Court under § 1405 Burns 1914, Acts 1901 p. 590.)
Reversed.
Whitcomb Dowden & Stout, H. W. Phipps and E. C. Hughes, for appellant.
L. A Douglass and Elmer Wetzel, for appellee.
OPINION
Appellee recovered a judgment on a policy of insurance issued by appellant on the life of Robert B. Strepey. Under the conditions of the policy the benefits provided by the schedule were payable to the executors or administrators of the insured unless settlement should be made under article 2 of the conditions, which provides for facility payment. This article reads as follows:
"The company may make any payment provided for in this policy to any relative by blood or connection by marriage of the insured, or to any other person appearing to said company to be equitably entitled to the same by reason of having incurred expense on behalf of the insured, for his or her burial, or, if the insured be more than fifteen years of age at the date of this policy, for any other purpose, and the production by the company of a receipt signed by any or either of said persons or of other sufficient proof of such payment to any or either of them shall be conclusive evidence that such benefits have been paid to the person or persons entitled thereto, and that all claims under this policy have been fully satisfied."
Appellee did not bring the action as executor or administrator, but sues in her own right. The complaint alleges that appellee was related to the insured by blood, being a cousin, and that he was at the time of his death a member of her family, and that for sometime before the death of assured she by his direction paid the premiums on the policy. The complaint also alleges that, on January 13, 1913, the insured sold, transferred and assigned said policy and the claim arising thereunder to appellee for value received, and to be received, and that both she and the assured notified the insurance company that the policy had been assigned to her. It is difficult from the complaint to discover whether she bases her right to recover on the assignment of the policy and the benefits provided for therein, or whether she claims a right to recover under section 2 of the conditions providing for facility payment hereinbefore set out. The "facility payment" clause gives to the company an option to make payment to any one having the qualifications named in the clause for the purpose of facilitating payment, but it does not entitle one to whom such payment might have been made at the option of the company to enforce payment of the sum due under the policy, where such person is not named as a beneficiary or otherwise designated as the person entitled to recover payment. Lewis v. Metropolitan Life Ins. Co. (1901), 178 Mass. 52, 59 N.E. 439, 86 Am. St. 463; Prudential Ins. Co. v. Young (1895), 14 Ind.App. 560, 43 N.E. 253, 56 Am. St. 319; Prudential Ins. Co. v. Godfrey (1909), 75 N.J. Eq. 484, 72 A. 456.
The fact, as alleged in the complaint, that appellee paid the premiums due on the policy for sometime before the death of the insured confers on her no right to enforce payment under the clause in question. The authorities cited sustain this proposition, holding that the payments of premiums on the policy are, in legal contemplation, made by the insured.
It is apparent from what has been said that appellee had no right as a blood relative of the insured to enforce payment to her, although the company might have exercised its option by paying her under the facility payment clause. If appellee possessed any right to enforce payment under the policy, it was because of the assignment to her as shown by the allegations of the complaint. The complaint alleges facts sufficient to show a parol assignment to her, accompanied by a delivery of the policy. Such assignments have been held valid unless forbidden by some provisions of the policy. State, ex rel. v. Tomlinson (1896), 16 Ind.App. 662, 675, 45 N.E. 1116, 59 Am. St. 335; Stewart v. Gwynn (1907), 41 Ind.App. 320, 324, 82 N.E. 1000, 83 N.E. 753. The complaint in this case sets out the policy as an exhibit wherein it is stipulated that the policy shall be void if it be assigned or otherwise parted with. It thus appears affirmatively from the allegations of the complaint that the assignment alleged and relied on was in direct violation of a condition of the policy providing that any assignment of the policy should render it void.
When a complaint states a cause of action, and also states facts which show a defense to the cause of action so stated, the complaint is fatally defective unless it states facts sufficient to meet and to overcome the defenses so disclosed. Under the provisions of the policy referred to, the company had a right to treat the policy as void, and to refuse payment on that ground unless facts existed which estop it from asserting that right or which amounted to a waiver of such right by the company. The complaint does not state facts sufficient to show that appellant waived such right, or that it was estopped by its conduct from asserting it. If such facts existed, it was necessary for appellee to plead them, for, in the absence of such facts, the complaint shows no right in appellee to recover under the alleged assignment. This being true, the complaint does not state facts sufficient to constitute a cause of action; and, if the defects had been properly pointed out by the memorandum filed with the demurrer, it would have been error to overrule the demurrer. The memorandum filed in support of the demurrer was based upon the single ground that the complaint failed to show any assignment or transfer of the policy to Mary Ritchey. As before stated, the complaint does allege facts sufficient to show a transfer or assignment of the policy; therefore, the court did not err in overruling the demurrer filed, as the complaint was not open to the objection pointed out. § 344, cl. 6, Burns 1914, Acts 1911 p. 415. Under the provisions of the section cited, the party demurring shall be deemed to have waived his right thereafter to question the pleading for any defect not specified in such memorandum. Under this statute, it has been held that the sufficiency of the complaint cannot be questioned by an original assignment of error. Hedekin Land, etc., Co. v. Campbell (1915), 184 Ind. 643, 112 N.E. 97; Pittsburgh, etc., R. Co. v. Farmers' Trust, etc., Co. (1915), 183 Ind. 287, 108 N.E. 108. Notwithstanding the statute precludes the appellant from questioning the sufficiency of the complaint at any later stage of the proceeding, it is still true that the complaint does not state facts sufficient to entitle plaintiff to recover under the law. If, on the trial, she had proved every fact alleged in her complaint and nothing more, she would not have been entitled to recover under the law, even though nothing had been shown as a defense.
The second instruction given by the court is as follows: "If you believe that the material allegations and statements of the complaint have been proved by a fair preponderance of the evidence, then you should find a verdict for the plaintiff for the full amount of said policy." As before stated, the complaint sets out the policy as an exhibit which contains a provision to the effect that the policy shall be void if it is assigned or parted with in any manner, and also alleges that appellee acquired the rights which she is seeking to enforce under an assignment of the policy. By the instruction given the jury was directed to return a verdict for plaintiff if it found these facts to be established by a preponderance of the evidence, without finding any fact showing that the right of the company to treat the policy as void by reason of such assignment had been waived, or that it was by its conduct estopped from asserting such right. The company was not liable to appellee on the policy, unless it had waived the right to treat it as void, or had estopped itself by its conduct from asserting such right.
By failing to point out this defect in the complaint by its demurrer, appellant waived the right to question the sufficiency of the pleading at...
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