LIFE CAS. CO. OF TENN. v. NIX

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Docket Number

No. 31439.

Judges

Smith, C.J., delivered the opinion of the court.

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LIFE CASUALTY CO. OF TENNESSEE v. NIX.

Leonard B. Melvin, of Laurel, and Moreau P. Estes, of Nashville, Tenn., for appellant.

The question here is essentially a question of the reformation of a contract. The decree of the court reforming the policy is a decree of a court of competent jurisdiction, and the plaintiff has not in any way attacked this judgment.

The contract as reformed is just as substantial and valid as the contract would have been had it been originally written as it now is. The court, having once determined the intention of the parties, reformed the contract accordingly. The contract is now closed to outsiders.

34 Cyc. 925; 29 Cyc., IV, page 270; 19 R.C.L., sec. 11, page 1333; Robinovitz v. Hamel, 144 P. 1024; 1915D, L.R.A. 981; Coplin v. Woodmen of the World, 105 Miss. 115, 62 So. 7; McBeth v. State, 50 Miss. 81.

In construing a life insurance policy, the intent of the insured as to who the beneficiary shall be, controls.

Mutual Life Insurance Co. of N.Y. v. Devine, 180 Ill. App. 422; 2 Cooley's Briefs on Insurance, 1348, 1349; 37 C.J. 567, sec. 326; 95 So. 631; 25 Cyc. 738; 14 R.C.L. 902, sec. 80; 34 Cyc. 999, 1000; State v. Hall, 70 Miss. 678, 13 So. 39.

The general rule that to be res adjudicata the parties must actually be a party to the lawsuit to such an extent as he may cross-examine, except, appeal, etc., does not apply in this case.

15 R.C.L. 1016, sec. 488; Lipscomb v. Postell, 38 Miss. 476, 77 Am. Dec. 651; Perry v. Young, 133 Tenn. 522, 182 S.W. 577, L.R.A. 1917B, page 385.

However, the judgment is res adjudicata in another sense, that is, the record shows that the controversy was solely between the defendant company and Alma Walters Hendrickson, the plaintiff in the suit, and that the Administrator could not possibly have any interest in the controversy, inasmuch as it is clearly shown that the soliciting agent knew that the designation Alma Nix, wife, was intended for Alma Walters Hendrickson, and that the policy was issued on this basis, under Fidelity Casualty v. Cross, 95 So. 631, which held that where the agent had full knowledge of the facts and a mistake is made in the application or in the policy, the company is bound. The Company being absolutely bound to pay the amount under the policy to Alma Walters Hendrickson, the judgment precludes the question of any interest of the Administrator of Sampson Nix in the policy.

10 R.C.L. 1116, sec. 323; Childress v. Carley, 92 Miss. 571, 46 So. 164, 131 A.S.R. 546; 15 R.C.L. 1008, sec. 482; 23 R.C.L. 362, sec. 60; 15 R.C.L. 1016, sec. 488; Coplin v. Woodmen of the World, 131 Miss. 105; Smith v. U.S. Casualty Co., 197 N.Y. 420, 26 L.R.A. (N.S.) 1167, 18 Ann. Cas. 701; 29 Cyc. 271; McBeth v. State, 50 Miss. 81; Phoenix Ins. Co. v. Hoffheimer, 4 Miss. 657; 1 Phillips on Ins., 72; 2 Phillips on Ins., 560.

A judgment based upon a declaration setting out no cause of action is absolutely void and of no force or effect under the Fourteenth Amendment, even though the parties were before the court and sufficient evidence offered.

Reynolds v. Stockton, 140 U.S. 254, 35 L.Ed. 468; Munday v. Vail, 34 N.J. 418; 15 R.C.L. 604, sec. 43; Lieberman, Loveman Cohn v. Knight, 153 Tenn. 275; Reynolds v. Stockton, 140 U.S. 245; Hattiesburg v. Reynolds, 124 Miss. 352, 86 So. 853; Abrams v. Allen, 109 Miss. 688, 68 So. 927.

The declaration in this case merely stating that there was no such person as Alma Nix, does not state a cause of action. The further allegation ought to have been made that by the designation Alma Nix, the assured did not intend to name a living person then in existence.

Coplin v. Woodmen of the World, 131 Miss. 105; Miller v. George, 30 S.C. 526, 9 S.E. 359; Schaffer v. Levenson Wrecking Co., 82 N.J. 61, 81 A. 434; McBeth v. State, 50 Miss. 81; 29 Cyc. 270; 19 R.C.L. 1333, sec. 11; 1915D L.R.A. 981; Robinovitz v. Hamel, 144 P. 1024; Coplin v. Woodmen of the World, 105 Miss. 115, 62 So. 7.

The policy in this case on its face was payable to Alma Nix, beneficiary, showing a definite intent that it should be paid to some person other than to his estate, and the general clause referring to the payment to the executors or administrators was placed in the policy as we have before stated to prevent the proceeds from going to the personal representatives of the beneficiary where the beneficiary dies before the assured. A similar clause is usually found in all insurance policies.

Albert Easterling and Welch Cooper, all of Laurel, for appellee.

Appellee was a necessary party to the suit.

No decree reforming an instrument can be binding on any person whose interest is affected unless he has had his day in court.

23 R.C.L. 359, sec. 56; 53 C.J. 1003, 1006, sec. 156; Liverpool Ins. Co. v. Rockledge, 97 Fla. 644, 121 So. 807; Griffith's Chancery Practice, sec. 122; Gates v. Union Naval Stores Co., 92 Miss. 227, 45 So. 979.

We say that if the insured intended by saying "Alma Nix, Beneficiary" he meant Alma Walters Hendrickson or Alma Johnson or Alma Smith or any other person, this was a matter of proof. Appellant had the right to prove it. But appellant offered no competent evidence to that effect. All of its evidence was either hearsay or testimony of other persons at another trial where appellee was not represented and was not a party.

34 Cyc. 967.

The rule is universal, so far as we know, that judgments are only binding as such upon parties and privies.

Lipscomb v. Pastell, 38 Miss. 476; 23 R.C.L. 355.

Under general rules failure to join necessary parties in an action for reformation, when properly brought to the attention of the court, necessitates the dismissal of the proceedings for reformation and no valid decree for reforming an instrument can be made or entered unless they effectively estop themselves from urging their rights, in the course of the proceedings wherein they should have been joined, and prior to the decree.

53 C.J. 1010, sec. 162; Gates v. Naval Stores Co., 45 So. 979; Wells v. Gay, 92 Miss. 227, 46 So. 497; 15 R.C.L. 1008.

The policy in this case is, and was, payable to the executor or administrator of the insured. Appellee is the administrator. It is in him that the cause of action is, and was, vested.

The person in whom the cause of action is vested brings this suit. He shows the death of the insured. He shows the facts surrounding his death and they come within the provisions of the policy.

This makes out the case, we submit.

To defeat this case, the appellant must show that it has paid either, the plaintiff administrator himself; or, the beneficiary named.

But it appears that there is no such person in existence named "Alma Nix," the beneficiary.

Argued orally by Moreau P. Estes and Leonard B. Melvin, for appellant, and by Ellis B. Cooper, for appellee.

1. EVIDENCE. Judgment.

In administrator's action on life policy which vested right of action on policy in administrator, and which provided that payment might be made to beneficiary, hearsay evidence and prior decree wherein alleged beneficiary was awarded proceeds of policy held inadmissible, where administrator was not party to suit wherein decree was rendered.

2. JUDGMENT.

In administrator's action on life policy which vested insured's administrator with right of action on policy, and which provided that payment might be made to beneficiary, insurer's plea that in prior action alleged beneficiary was awarded proceeds of policy held demurrable, where administrator was not party to prior action.

3. INSURANCE.

Under life policy vesting in insured's administrator right of action on policy and providing that payment might be made to beneficiary, administrator, who proved that there was no such person known as person named as beneficiary in policy, held entitled to recover proceeds, as against contention that administrator was required to prove that no person was intended to be designated as beneficiary by name appearing in policy.

4. INSURANCE.

Life policy provision vesting in insured's administrator or executor right of action on policy and providing that payment might be made to beneficiary held to mean that proceeds were payable to executor or administrator, but, if insurer paid beneficiary named in policy, such payment was full settlement, and payment was matter of defense to be pleaded and proved by insurer when sued on policy by executor or administrator.

Smith, C.J., delivered the opinion of the court.

The appellee is the administrator of the estate of Sampson Nix, deceased, and the appeal is from a judgment awarded on a life insurance policy issued to the deceased by the appellant. The policy insures against death, or loss of limb or sight, by accidental means. In the caption of the policy Alma Nix is designated as the beneficiary, but her name does not appear in the body thereof.

The policy provides that, if the insured "shall suffer any of the specific losses set forth below, the company will pay to the insured or to the executors or administrators of the Insured the sum set opposite such loss, or shall pay such sums to the beneficiary named herein, and such payment shall be a full settlement under this policy, which shall be delivered up for cancellation. For loss of Life One Thousand Dollars ($1,000.00) Both Hands One Thousand Dollars ($1,000.00)

. . . . . .

"4. Written notice of injury on which claim may be based must be given to the Company within twenty days after the date of the accident causing such injury. In event of accidental death immediate notice thereof must be given to the Company.

"5. Such notice given by or in behalf of the Insured or executor or administrators of the Insured as the case may be, to the Company at its Home Office, Nashville, Tennessee, or to one of the District Offices of the Company, with particulars sufficient to identify the Insured, shall be deemed to be notice to the Company.

. . . . . .

"10. Indemnity for loss of life of the Insured is payable to the executors or administrators of the Insured. All other indemnities of this policy are payable to the Insured."

The appellee's declaration alleges the issuance of the policy, the death of the insured, the appellee's appointment as administrator of the insured's estate, and that there was no such person known as Alma Nix. The appellant denied liability, and pleaded specially a decree of the chancery court in a case in which Mrs. Alma Walters Hendrickson was the plaintiff and the appellant was the defendant, wherein the court decreed that the plaintiff was the person intended to be designated in the policy by the name of Alma Nix, and awarded her a judgment thereon against the appellant, which judgment was paid and satisfied.

A demurrer to this plea was sustained, and the case was tried on its merits.

The appellee proved the issuance of the policy, the death of the insured, his appointment as administrator of the insured's estate, and that there was no such person known as Alma Nix. Over the objection of the appellant, it was also proved that an officer and attorney of the appellant, who was approached by the appellee for a settlement of the policy, admitted that the policy was in full force and effect. The appellant then offered, but was not permitted to prove, the decree of the chancery court referred to in its special plea, and, by hearsay testimony, that Mrs. Alma Walters Hendrickson was the person intended to be designated in the policy by the name of Alma Nix. The hearsay evidence offered by the appellant was, of course, properly excluded, as was also the decree of the chancery court, for the reason that the appellee was not a party thereto, and therefore not affected thereby. For the same reason the demurrer to the appellants plea was properly sustained.

It will be unnecessary for us to consider the appellant's objection to the various rulings of the court below on the introduction and exclusion of the evidence and the granting and refusing of instructions, for the reason that the appellee on the uncontradicted evidence was entitled to a directed verdict.

The appellant's contention is that it was incumbent upon the appellee to allege and prove, not only that there was no such person known as Alma Nix, but that no person was intended to be designated by that name, which the appellee failed to do. In other words, the appellant's contention is that the administrator's right of action arises only when it is made to appear that there was no beneficiary designated in the policy. While this question is not without difficulty, it seems reasonably clear that the right of action on the policy for the death of the insured is vested in the insured's administrator. Such is expressly declared to be the case in one of the provisions of the policy hereinbefore set forth. The difficulty arises under the further provision of the policy wherein it stipulates that payment may be made to the beneficiary. Construing these two provisions of the policy together, it seems clear that what they mean is simply this: Indemnity for loss of life to the insured is payable to the executor or administrator of the insured, but, if the company shall pay the beneficiary named therein, such payment shall be a full settlement under this policy, which shall be delivered up for cancellation. So construed, the cause of action is in the executor or administrator, but payment to the beneficiary will be a bar thereto, which payment is a matter of defense to be pleaded and proved by the appellant when sued on the policy.

Affirmed.

LIFE CASUALTY CO. OF TENNESSEE v. NIX.

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