Wholey v. D.C.n Nat. Life Ins. Co.

• Decision Date: 24 June 1943
• Docket Number: No. 8494.,8494.
• Citation: 32 A.2d 791
• Parties: WHOLEY v. COLUMBIAN NAT. LIFE INS. CO.
• Court: Rhode Island Supreme Court

32 A.2d 791

WHOLEY

v.COLUMBIAN NAT. LIFE INS. CO.

No. 8494.

Supreme Court of Rhode Island.

June 24, 1943.

Exceptions from Superior Court, Providence and Bristol Counties; Patrick P. Curran, Judge.

Action of the case in assumpsit on a contract of life insurance by Elizabeth V. Wholey against the Columbian National Life Insurance Company. The trial justice directed a verdict for defendant, and the plaintiff took exceptions.

Exceptions overruled and case remitted for entry of judgment on the verdict.

Joseph E. Beagan and Robert P. Beagan, both of Providence, for plaintiff.

Claude R. Branch and Ferd W. Rusch, both of Providence, for defendant.

CAPOTOSTO, Justice.

This is an action of the case in assumpsit on a contract of insurance on the life of Timothy V. Wholey, late of the city of Providence, deceased. The action is brought by his widow, Elizabeth V. Wholey, as sole beneficiary under said contract. The case was tried before a jury in the superior court and, at the conclusion of all the evidence, the trial justice directed a verdict for the defendant. The case is before us on exceptions of the plaintiff to this action of the court and to numerous rulings in the course of the trial.

The case was commenced by writ dated December 3, 1937. The plaintiff's declaration contains two special counts and the common counts, all for the same cause of action, as shown by her bill of particulars. The allegations of the special counts are, in substance, as follows: January 15, 1932, at Boston, Massachusetts, Timothy V. Wholey made with the defendant a contract of insurance on his life. The consideration for the contract was the payment by him of twenty-eight annual payments of $1,803.03 each, the first such payment to be made on June 2, 1932, and the payment by him, in addition, of a proportionate part of that annual premium for the period from December 8, 1931, to June 2, 1932. On the basis of such premium, the defendant further agreed to insure his life from the 8th day of December 1931 to the 2d day of June 1932. Elizabeth V. Wholey, the wife of the insured and the plaintiff here, was named as sole beneficiary under the contract. At her election she was to receive $250 per month for one hundred and twenty months from the death of the insured, or she was to receive upon his death $25,400, which sum represented the agreed commuted value of such insurance. These counts further allege that the insured, relying on these promises, paid the company a large sum of money; that he died on May 3, 1932, while the contract was in full force and effect; that on May 13, 1937, the plaintiff requested the company to forward to her the policy evidencing said contract, but that the company refused to do so and denied the existence of any such contract.

The defendant filed a plea of the general issue and also seven additional pleas, which, in one form or another, set up the defense that the rights of the plaintiff in respect to the contract of insurance declared upon in the instant case were fully determined in an equity suit brought by the defendant against her, individually and as executrix of the will of Timothy V. Wholey; that the equity suit and an action at law, which the plaintiff brought against the defendant while the equity suit was pending, were based on the same cause of action that is sued upon in the case at bar; that, in compliance with a final decree in the equity suit, the company paid to the plaintiff all sums due her in connection with any insurance or contract of insurance on the life of Timothy V. Wholey; that she received and accepted the same, thereby terminating all obligations of the company on account of any such insurance; that she discontinued her action at law by order of the court in the equity suit; and that neither she nor any one in her behalf made any request for a policy evidencing such insurance as she now sues for until after the equity suit was finally determined.

Plaintiff's answer by way of replication to the company's special pleas was, in effect, a specific denial that the cause of action in the equity suit was the same as the one in the instant case; and further, that the action at law mentioned in certain pleas was brought by the plaintiff as trustee for the Industrial Trust Company, which was the absolute assignee of the insurance policy involved in the equity suit.

At the trial of the instant case, counsel for the plaintiff admitted that the only application made by Timothy V. Wholey for life insurance from the defendant, after his application for a life insurance policy that had lapsed before January 15, 1932, for nonpayment of the premium specified in that policy, was an application for the reinstatement of that policy. Whatever testimony the plaintiff and her witnesses gave or offered to give in support of the contract for insurance relied upon by her in this case was with reference to an application by him for a reinstatement of such lapsed policy and other documents in connection therewith.

Twenty-two exhibits were offered by her to prove her present claim, but all of them, with the exception of plaintiff's exhibit 1, which is a letter dated May 13, 1937, from her attorney to the company demanding a new policy, were excluded by the trial justice. The twenty-one exhibits that were excluded are numbered 2 to 22 “for identification.” Excepting exhibits 7, 21 and 22, all such exhibits had been introduced in evidence in the equity suit. Exhibit 7 is a copy of the lapsed policy and attached documents, the originals of which were introduced in evidence in the equity suit; and exhibits 21 and 22 are unpaid premium notes which matured after the death of the insured and were returned to the plaintiff by the company. No other evidence was given or offered by the plaintiff in the instant case tending to show the existence of any contract for insurance except in connection with the lapsed policy.

The situation presented by the record before us requires a review of the equity suit and the previous action at law which, according to the defendant, are determinative of the instant case. The equity suit was twice before this court. Columbian National Life Ins. Co. v. Industrial Trust Co., 53 R.I. 334, 166 A. 809; Id., 57 R.I. 325, 190 A. 13. The former action at law is docketed as No. 89402 in the files of the superior court and never reached this court. The subpoenas in the equity suit, under date of July 22, 1932, were directed to Elizabeth V. Wholey, individually and as executrix of the will of Timothy V. Wholey, and to the Industrial Trust Company. The former action at law was brought against the insurance company by the present plaintiff, as trustee for the benefit of the Industrial Trust Company, by writ dated August 3, 1932.

In the equity suit, the insurance company prayed for the cancellation of a contract for the reinstatement of an existing life insurance policy which it had issued on the life of Timothy V. Wholey. The ground for such relief was material false representations by the insured as to the condition of his health at the time of the making of that contract. In that suit, the respondent Elizabeth V. Wholey demurred to the bill of complaint on the ground that Wholey's illness and his failure to disclose it were immaterial and constituted no defense to a recovery under the policy. The other respondent, the Industrial Trust Company, to which the policy in question had been assigned, as security for a debt, by the insured and by the sole beneficiary, Elizabeth V. Wholey, moved to dismiss the bill of complaint on the ground that the issue presented by the bill might be raised in the action at law which we have above mentioned. On the complainant's appeal from a decree sustaining the demurrer and granting the motion to dismiss, this court reversed the decree and held that: “The issue (fraud) is one over which equity and law have concurrent jurisdiction. The rule is general that a court of equity which has first properly taken jurisdiction of a cause can not be ousted of its jurisdiction by a subsequent proceeding at law for the reason that the latter tribunal also has jurisdiction.” Columbian National Life Ins. Co. v. Industrial Trust Co., 53 R.I. 334, 342, 166 A. 809, 812. This opinion was filed June 14, 1933.

While the equity suit was pending for decision on the points involved in the opinion just cited, the insurance company, as defendant in the then pending action at law, filed in that action a plea of the general issue and a number of special pleas, which set up the same facts in defense of that action as it had alleged as grounds for cancellation of the contract for reinstatement of the policy in its bill of complaint. It also filed a plea of tender and, on December 8, 1932, it deposited the sum of $942.17 with the clerk of the superior court, which sum, according to the company, represented all moneys legally due to the respondents upon cancellation of the policy. Following the opinion of this court of June 14, 1933, in the equity suit, a justice of the superior court entered an order staying the prosecution of the action at law until the equity suit was finally determined.

The equity suit then became the source of protracted litigation. In so far as the pleadings are concerned, we need only refer to the answer of the respondent Elizabeth V. Wholey. This answer admitted some of the allegations in the bill of complaint; it denied some others; and it left the complainant to its proof as to such allegations that were neither admitted nor denied. In no manner did she set forth in her answer that the contract which Timothy V. Wholey entered into with the company was a contract for new insurance rather than a contract for the reinstatement of the policy in question. Except for a statement of the basic facts in the equity suit, brevity compels us to refer to the opinion of this court in Columbian National Life Ins. Co. v. Industrial Trust Co., 57 R.I. 325, 190 A. 13, for...