The Wabash Valley Protective Union v. James

• Decision Date: 13 December 1893
• Docket Number: 949
• Citation: 35 N.E. 919,8 Ind.App. 449
• Parties: THE WABASH VALLEY PROTECTIVE UNION v. JAMES
• Court: Indiana Appellate Court

35 N.E. 919

8 Ind.App. 449

THE WABASH VALLEY PROTECTIVE UNION v. JAMES

No. 949

Court of Appeals of Indiana

December 13, 1893

From the Tippecanoe Superior Court.

Judgment affirmed, at costs of appellant.

G. D Hurley, M. E. Clodfelter and W. E. Humphreys, for appellant.

OPINION

LOTZ, J.

The appellant is a mutual life insurance corporation organized under the laws of this State. It issued a joint policy of insurance upon the lives of Hugh B. and Annie M. James, in the sum of $ 3,000. By its terms, the insurance money was payable to the survivor in the event of the death of either of the assured.

Annie M. James died, and the appellee made due proof of her death and demanded payment of the policy. The appellant made an assessment upon its policy-holders and collected money with which to pay said policy. A controversy arose between the appellant and appellee as to the amount which should be paid in the discharge of the policy. This controversy was settled in a compromise agreement, in which the appellant paid the appellee the sum of $ 600, and appellee executed a written release and assignment of the policy to the appellant. The appellee brought this action to recover damages alleged to have been sustained through fraudulent representations in procuring the settlement and compromise.

The issues joined were tried by the court. The court made a special finding of the facts, and stated the conclusions of law thereon. A judgment was rendered in favor of the appellee in the sum of $ 2,662.40. Many errors are assigned. We consider those only which counsel have discussed.

The first is the overruling of the demurrer to the complaint.

Appellant insists that the cause of action is based upon the policy of insurance, and that a copy thereof should have been filed with the complaint. In this contention counsel are in error. The gravamen of the complaint is the fraud alleged to have been perpetrated upon the appellee. A party may retain the property received through a fraudulent transaction and sue for the damages sustained by the fraud perpetrated upon him. He may affirm the contract and recover or recoup the damages sustained by him. But he can not repudiate the contract and retain its benefits at the same time. English v. Arbuckle, 125 Ind. 77, 25 N.E. 142; Nysewander v. Lowman, 124 Ind. 584, 24 N.E. 355; Johnson, Admr., v. Culver, Admx., 116 Ind. 278, 19 N.E. 129.

The fraud is sufficiently averred in the complaint, and there was no error in overruling the demurrer to it.

It is next insisted that the court erred in sustaining appellee's demurrer to the third paragraph of answer. This answer pleaded, as a bar to the action, a by-law of the appellant, which was as follows: "No suit or action shall be sustainable in any court of law or chancery upon any death claim unless the same shall be commenced within twelve months after the death of any member."

It is alleged that, when this action was commenced, one year had elapsed since the death of Annie M. James. It is not necessary for us to determine whether or not such stipulation is valid, for this is not an action on the policy, nor is it an action on a contract. It is an action in tort which arose when the fraud was perpetrated.

The demurrer was correctly sustained to this answer.

The fourth paragraph of answer was in the nature of a counterclaim. It alleges, in substance, that the policy was procured by the false representations of the appellee and of the said Annie M. James, as to the condition of her health; that this fraud was kept concealed from the appellant until after the assessment had been made and appellee had obtained the $ 600. The conclusion is that the appellant sustained damages in the sum of $ 1,500, for which it asked judgment.

It is a familiar rule of pleading that a counterclaim must contain all the essential averments of a complaint. It must state a good cause of action in favor of the defendant and against the plaintiff, growing out of the subject matter alleged in the complaint. It can not be aided by reference to other pleadings, but must be complete within itself. The pleading under consideration refers to the policy and assessment as described in the complaint. If it be considered independently of such aid or reference, it is hardly intelligible. The inducement upon which its important averments depend are wanting. There is nothing to show that any policy was ever issued, or that an...