Public Nat. Life Ins. Co. v. Highsmith

Citation47 Ala.App. 488,256 So.2d 912
Decision Date29 December 1971
Docket Number6 Div. 102
PartiesPUBLIC NATIONAL LIFE INSURANCE COMPANY v. J. H. HIGHSMITH, d/b/a Highsmith Funeral Home.
CourtAlabama Court of Civil Appeals

Don B. Long. Jr., Birmingham, for appellant.

Jerry F. Guyton, Winfield, for appellee.

BRADLEY, Judge.

Appellee, J. H. Highsmith, d/b/a Highsmith Funeral Home, filed a one count complaint in the Circuit Court of Marion County on May 29, 1970 against appellant, Public National Life Insurance Company, alleging a breach of contract. The contract was attached to and incorporated with the complaint by reference.

Appellant's demurrer was overruled, and it pled in short by consent with leave, etc.

On October 12, 1970 the case was tried by the court sitting without a jury. On November 4, 1970 the court rendered a judgment for appellee in the amount of $300.00 and this appeal arises from that judgment.

The evidence showed that appellee owned and operated a funeral home in Russellville, Alabama. On September 29, 1954 he entered into an agreement with Fidelity Service Insurance Company requiring him to service burial policies sold by Fidelity. The agreement required appellee to furnish certain services and materials for which Fidelity was required to pay appellee according to a schedule of payments set out in the contract.

In paragraph 3(k) of said contract the following is found:

'. . . It is understood and agreed by the parties hereto that at the end of each 12 month period during the life of this contract, the remuneration payable to the Funeral Director by the Insurance Company shall be increased or decreased for the ensuing 12 month period by whatever increase or decrease exists in the cost of the merchandise to the Insurance Company or its funeral home at the time of making such adjustments in the remuneration to be paid the Funeral Director by the Insurance Company.'

Said contract also provided that the parties and 'their successors or assigns including any successor by merger, purchase or otherwise' would be bound by the terms of said agreement.

United Security Life Insurance Company purchased all of the stock of Fidelity, and, on December 28, 1962, dissolved it.

Appellant's only witness, its assistant vice-president, testified that appellant succeeded to United Security's business by purchase and assumed its claims.

Appellee claimed that over the years since 1954 the cost of merchandise had increased by $16.00 per funeral and that the appellant, even though required by the agreement to do so, had failed to increase its remuneration to appellee by this amount.

Appellee's evidence tended to show that appellant was a successor to Fidelity and had assumed the 1954 agreement, that the cost of merchandise had increased, and that the appellant had been notified of this increase. In support of this evidence, appellee also put into evidence a list of policies (Exhibit D) that it had serviced for appellant.

The testimony also showed that appellant had received a letter from the Alabama Funeral Directors Association in the fall of 1969 in which the Directors advised appellant of the increased costs of the merchandise used to service its insurance contracts.

However, it was also shown that appellant sent a letter to all funeral directors setting out a schedule of increased benefits to be effective January 1, 1970. Subsequent to this letter, a second letter was mailed out increasing the benefits even more, but not as much as proclaimed necessary by the funeral directors in their letter.

There was evidence that appellant was paying more to appellee for caskets than what appellee could purchase caskets for from two firms in the casket making business. But, it was also shown that appellant required appellee to use caskets of comparable quality to those used by Liberty National Insurance Company. Apparently the quality of the caskets used by Liberty National was higher than that of the ones sold by the cheaper firms.

The evidence reflected that checks had been given to appellee and cashed by appellee for services rendered pursuant to the agreement in question which contained thereon these words: 'Settlement of Claim Liability of United Security Life Insurance Company under terms of Policy No._ _ (here was placed the appropriate number) as detailed on voucher attached.' The evidence was undisputed that appellee indorsed and negotiated these checks.

Appellant made ten assignments of error. Assignments three and nine were not argued and are deemed waived. Rule 9, Supreme Court Rules.

Assignments of error one and six question the ruling on the demurrer and will be considered together.

There were nineteen grounds of demurrer and since a demurrer is an entity, should any one of the grounds be good, then the demurrer is good. Prather v. Ray, 258 Ala. 106, 61 So.2d 46. Furthermore, if any of the grounds of demurrer are not argued in brief, then those, like unargued assignments of error, are deemed to have been waived. Air Engineers, Inc. v. Reese, 283 Ala. 355, 217 So.2d 66.

Grounds of demurrer one, two, seventeen and eighteen state, in essence, that the complaint alleged no breach of contract, or that it was alleged with uncertainty, or that the allegation is a mere conclusion of the pleader, or that there was a failure to allege the particulars showing wherein the breach occurred.

We do not believe these grounds have any merit.

The complaint contains an averment of that part of the contract which requires appellant to increase appellee's remuneration where appellee's costs have increased, and the complaint contains an averment that appellant has not increased appellee's remuneration.

We think this is an adequate allegation of a breach of contract for it was said in Woodward Iron Co. v. Frazier, 190 Ala. 305, 67 So. 430, that:

'While no great particularity is required as to describing the breach of the contract, the essential facts constituting the breach should be set forth in unequivocal terms, and the breach should be assigned with such certainty and particularity as will apprise the defendant in what particular he has failed to perform. All that is required is that the breach complained of be substantially set forth and substantially proved.'

Grounds four, nine, ten and twelve question the complaint on the basis that no promise by appellant is shown nor that appellant was a party to or had assumed the contract.

The complaint averred that appellant was a successor company to Fidelity Service Insurance Company. Also, the contract, in its entirety, was incorporated in and made a part of the complaint. Paragraph seven of said contract specifically provided that its provisions were to be binding on successors to said contract. We consider these grounds not to be meritorious. Air Engineers, Inc. v. Reese, supra.

Demurrant, in grounds five, six, eleven, thirteen, fourteen and fifteen, contended that the complaint did not allege that appellee had performed, had tendered performance, or was ready, willing and able to perform.

In Floyd v. Pugh, 201 Ala. 29, 77 So. 323, the Supreme Court said:

'The fulfillment of the condition precedent by plaintiff must be averred to show the liability of defendants consequent upon such discharge by him of his part of the agreement. (Citations omitted.)'

See also Otinger v. Water Works and Sanitary Sewer Board, 278 Ala. 213, 177 So.2d 320.

It is clear from the contract attached to the complaint that before appellant was due to pay appellee for his services, appellee must first perform those services, and this performance by appellee must be alleged. Duffey v. Southern Mfg. Company, 207 Ala. 369, 92 So. 545. In the case at bar there was no allegation of performance by appellee or that appellee stood ready, willing and able to perform. The failure of the complaint to allege performance by appellee made it defective and subject to proper demurrer. The trial court erred in overruling the demurrer in this regard.

Ground three of the demurrer is premised on the contention that the complaint fails to aver the time of the breach.

The contract, which is the basis of this action, provides in Section 3(k) that the funeral director is to receive remuneration for the cost of merchandise used based on the cost as of the date of the contract, which was September 29, 1954. The cost of merchandise for which the funeral director was to receive pay would be adjusted, according to the contract, every twelve months to take care of any increase or decrease in the merchandise cost.

In other words, the funeral director would receive as remuneration for the cost of merchandise what that cost was on the date of the contract. This remuneration would continue on that basis for twelve months. At the end of twelve months, and every twelve months thereafter for the life of the contract, which was fifteen years, the remuneration to the funeral director for the cost of the merchandise would be adjusted to meet the costs for the past twelve month period. The adjusted costs would affect the costs for the next ensuing twelve month period.

The complaint was filed after the completion of the contract and claimed increased costs over the life of the contract, not for some twelve month period for which there had been no adjustment or where a dispute in the amount of the adjustment had arisen, but for the fifteen periods of the contract.

The question is, can the funeral director claim an increase in costs over the life of the contract, or is he limited to claiming such cost adjustments for each twelve month period?

If he can claim for the entire contract life, no statement is necessary in the complaint as to time of breach.

The provisions of the contract indicate that the insurance company is required to increase or decrease the amount paid the funeral director for the cost of merchandise every twelve months so long as the contract is enforceable. Consequently, it would appear that the funeral director would be...

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