Riegel v. Insurance Co.
| Decision Date | 23 February 1891 |
| Citation | 140 Pa. 193 |
| Parties | E. T. RIEGEL v. AMERICAN LIFE INS. CO. |
| Court | Pennsylvania Supreme Court |
Before PAXSON, C. J., STERRETT, GREEN, CLARK, WILLIAMS, McCOLLUM and MITCHELL, JJ.
APPEAL BY PLAINTIFF FROM THE COURT OF COMMON PLEAS NO. 4 OF PHILADELPHIA COUNTY.
No. 228 January Term 1890, Sup. Ct.; court below, No. 350 September Term 1889, C. P. No. 4, in Equity.
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Mr. William W. Porter, for the appellant:
1. If the plaintiff is entitled to relief at all, a court of equity alone can grant it; and if the surrender of the first policy and the acceptance of the paid-up policy were induced by and based upon a mistake by the parties of a material fact, the jurisdiction of equity is exclusive and complete: § 39, act of June 13, 1840, P. L. 671; Horbach v. Gray, 8 W. 492; Jenks v. Fritz, 7 W. & S. 201; Gibson v. Rolling Mill Co., 3 W. 32. The dealings between the parties being based upon the assumption that Leisenring was still alive, this assumption constituted such a mutual mistake as equity will relieve against, and the contract is necessarily void and must be set aside: Bispham's Eq., §§ 190, 191; Hitchcock v. Giddings, 4 Price 135; Allen v. Hammond, 11 Pet. 63.
2. The contract is not, like one of fire or marine insurance, a mere contract of indemnity, but is an engagement to pay a certain sum at the death of a person: Bliss on Life Ins., § 3; Scott v. Dickson, 108 Pa. 6; Corson v. Garnier, 15 W. N. 451. The existence of the person to be insured is essential to a valid contract of life insurance, and the second policy, issued to the plaintiff, was invalid from the very nature of the contract: Mutual Ins. Co. v. Ruse, 18 Ga. 334; Lefavour v. Insurance Co., 1 Phila. 558. However, in any event, the surrender of the old policy was without consideration. The plaintiff actually released the company from a debt of $6,000 which was due her, in consideration of an engagement to pay $2,500 upon the happening of an event which had already come to pass.
3. This was not the case of a contract made in view of doubtful facts. The illustration mentioned by the learned judge, of the insurance of a ship, lost or not, wholly destroys his argument on this point; for, in the case of such an insurance, the policy always contains the words "lost, or not lost;" and if the parties in the present instance had agreed that the new contract should stand, whether Leisenring was then dead or alive, the agreement should have been so expressed in the new policy. That policy, as issued, was as obviously conditioned upon the assumption of life as was the original policy. Nor did the question of Leisenring's possible death in any way enter into the calculations of the company when issuing the paid-up policy. The change to paid-up insurance simply regarded the premiums paid as a single advanced payment, entitling the beneficiary to a proportional amount at death. The amount was therefore a question of figures only, and nothing was conceded to the plaintiff which would not have been as readily conceded had Leisenring been alive and at hand.
Mr. Henry Hazlehurst, for the appellee:
1. To say that the plaintiff acted under a mistake, is absurd, for she says herself in the bill that she made the surrender and accepted the paid-up insurance, "inasmuch as no information could be had whether the assured was living or dead." No one is mistaken about a thing that he has no knowledge of at all. As the plaintiff herself stated the case in her bill, the contract was made in view of the doubt existing as to Leisenring's life. Both parties took the risk of the doubt, and in such a case equity will not interfere to make a better bargain for one of them: Cann v. Cann, 1 P. Wms. 726; Pullen v. Ready, 2 Atk. 587; Jones v. Randall, Cowp. 37; Perkins v. Gay, 3 S. & R. 331; Miles v. Stevens, 3 Pa. 37; Geiger v. Cook, 3 W. & S. 270; Fox v. Mackreth, 2 Bro. C. 420 (1 White & T. L. Cas. Eq., 72); 1 Story Eq. J., §§ 140-152; Bellas v. Hays, 5 S. & R. 427; Horbach v. Gray, 8 W. 497; Jenks v. Fritz, 7 W. & S. 201; Gibson v. Rolling Mill Co., 3 W. 32; Bishop v. Reed, 3 W. & S. 265; Mays v. Dwight, 82 Pa. 462; McAninch v. Laughlin, 13 Pa. 371.
2. Most of the later Pennsylvania cases have been complicated by questions of protest and the exaction of penalties; but in McCrickart v. Pittsburgh, 88 Pa. 133, the court said broadly that where there is no mistake, or fraud, a voluntary payment cannot be recovered back on the mere ground that the one party was under no obligation to pay and the other party had no right to receive. Under that rule, if the insured had died immediately upon taking out the policy, and the plaintiff, in ignorance of that fact, had regularly paid the premiums for thirteen years, no one would suppose that she could recover them back. Yet that would be a case which, compared with the present one, might well appeal to our sense of justice. And the plaintiff's bill exposes her to the charge of extreme negligence. In view of her speedy ascertainment of the facts, after the transaction was closed, it is fair to suppose that she made no inquiry before that, and that had she done so she would have discovered enough to put her on her guard.
An order for a re-argument having been made, the case was argued a second time on January 7, 1891, before a full bench, by the same counsel.
On the re-argument, the plaintiff's counsel filed at the bar of the Supreme Court an amendment to the bill, adding to the averment the language of which is quoted in ipsissimis verbis in the statement of facts, ante, 194, these words: "The parties acting in respect to the transaction on the basis that the said Leisenring was still alive."
The decree now before us was made upon the hearing of a general demurrer to the plaintiff's bill. The demurrer admitted the truth of every fact alleged in the bill, but denied that, taken as stated, the facts were sufficient to entitle the plaintiff to relief in a court of equity. To determine whether this decree was right, it becomes necessary to look into the bill in order to ascertain what facts were set forth as the basis of the relief sought. These may be stated as follows:
1. That Jacob Riegel was in his lifetime a creditor of one Leisenring, and that to secure his claim he took out a policy of insurance on the life of his debtor, in the company against which the bill was filed, for six thousand dollars, paying an annual premium therefor of one hundred fifty-three dollars and ninety cents.
2. That Riegel paid the premiums eight or ten years, and died, and that the plaintiff, his widow and administratrix, has continued to pay them since, down to the death of Leisenring.
3. That Leisenring died on the tenth of March, 1889, although the fact was not known at the time to Mrs. Riegel or the insurance company, nor had either known his whereabouts for thirteen years.
4. That ten days after Leisenring's death, and while the fact was yet unknown, Mrs. Riegel surrendered the policy on his life, and accepted a new policy for $2,500, as a paid-up policy, in order to be relieved from the burden of the annual premium of one hundred fifty-three dollars and ninety cents on the first policy.
5. That in making this exchange "both parties to the transaction were acting in respect thereto on the basis that Leisenring was alive." This averment was added by amendment on the argument:
6. That when she learned that Leisenring was dead, before the exchange and the surrender of the original policy, she...
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