Opinion
No. 32607.
April 5, 1937.
1. INSURANCE.
Member of benefit insurance association held not entitled to recover, as part of agreed disability benefits of "one-half of the face of the certificate," one-half of amount provided elsewhere in certificate "for the erection of a monument to his memory," irrespective of whether in some cases association had included monument benefits in computing disability benefits, since such discrimination would be violative of statute (Code 1930, sec. 5171).
2. INSURANCE.
Under statute prohibiting discrimination by life insurance companies in favor of individuals and subjecting company to revocation of license for such discrimination, promise of such discrimination is unenforceable (Code 1930, sec. 5171).
3. INSURANCE.
Where resolution of benefit association allocated to members certain dividend accumulations, denominated "paid-up insurance," but provided that such accumulations would be available only if member continued membership by payment of dues, member who collected disability benefits, which had effect of canceling membership, held not entitled to recover accumulations.
4. INSURANCE.
Member of benefit association who, in compliance with provision that member must continue to pay assessments until disability claim was actually paid, continued to pay assessments pending suit for disability benefits against the association held not entitled to recover such assessment payments after successful termination of the suit, since provision was reasonable and binding and intended for protection of insured.
APPEAL from chancery court of Scott county. HON. A.B. AMIS, SR., Chancellor.
Eastland, Eastland Ormond, of Forest, for appellant.
A judgment of a court having jurisdiction of the subject matter and the parties is res judicata of all questions which were necessarily involved, and which could have been presented, and not merely questions actually presented by the pleadings; and it is res judicata of all questions which might have been presented whether such questions were actually presented or not.
Dean v. Board of Sup'rs, DeSoto County, 135 Miss. 268, 99 So. 563; Burford v. Kersey, 48 Miss. 646; 34 C.J., pages 818, 909, par. 1236; National Life Acc. Ins. Co. v. Prather, 161 So. 117; Venson v. Colonial Investment Co., 116 Miss. 59, 76 So. 827.
A party who has failed to assert and litigate a claim or allowance in a suit in which he might with propriety have done so, will not be permitted to litigate it in a second suit, unless his failure to do so in the first suit was caused by the fraud of his adversary and not by his own negligence.
State v. Morrison, 60 Miss. 74; Burford v. Kersey, 48 Miss. 642; Hardy v. O'Pry, 102 Miss. 197, 59 So. 73; Gaines v. Kennedy, 48 Miss. 103.
The test of whether or not a claim should have and could have been litigated in the first suit is whether or not the proof necessary to support the claim in the first suit is necessary to support the claim in the second.
Hardy v. O'Pry, 102 Miss. 197, 59 So. 73; Harrison v. Turner, 116 Miss. 550, 77 So. 528.
The constitution and laws of a benefit society are binding upon it and upon all its members, and may be considered as written into contracts between it and its members; and all amendments, changes, and additions made in or added to said constitution and laws of the order become at once the law of the order and of its members and the members are bound thereby provided said charges or amendments are reasonable and do not impair vested rights.
Odd Fellows Benefit Assn. v. Smith, 161 So. 115; Butler v. E.H. Columbian Woodmen, 116 Miss. 85, 76 So. 830; Newman v. Knights of Pythias, 110 Miss. 371, 70 So. 241; Sovereign Camp v. Woodruff, 80 Miss. 456, 32 So. 4.
A voluntary payment cannot be recovered back; and within the meaning of the rule a voluntary payment is a payment made, with compulsion or fraud, without any mistake of fact, of a demand which the payor does not owe, and which is not enforceable against him.
McLean v. Love, 157 So. 361; 48 C.J., sections 280-285; Town of Wesson v. Collins, 72 Miss. 855, 18 So. 360; J.H. Menge Sons v. G. S.I.R.R. Co., 53 So. 424, 97 Miss. 810; Bank of Belmont v. Judson, 108 So. 440; 2 Elliott on Contracts, page 630; Graham-McNeil Co. v. Scarborough, 99 So. 502.
Premiums voluntarily paid upon a policy of life insurance do not fall within the exception to the rule and cannot be recovered.
Aetna Life Ins. Co. v. Thomas, 144 So. 50; Featherstone v. Stonewall Life Ins. Co., 147 So. 305.
Money cannot be recovered on a mistake of fact if the other party cannot be put in status quo. If there must be a loss it must fall upon him whose negligence caused the mistake.
R.C.L., Payment, page 170.
If there are no such circumstances surrounding the payment as constitute sufficient compulsion in the eyes of the law in accordance with the principles laid down herein, the fact that the payment is made under the most solemn protest does not render it any the less voluntary; it does not impair in any respect the operative effect of the payment as a discharge of the demand on which it is made, so far as such demand is legal.
McLean v. Love, 175 So. 361; 21 R.C.L. 149, sec. 173.
A representation is not actionable unless actually false. The representation must be materially and substantially false, and must be acted upon by the bearer in the manner reasonably contemplated.
26 C.J. 1098, sec. 29; 21 R.C.L. 301, sec. 64.
Except where it may be regarded as continuing in character, the truth or falsity of a representation is generally to be determined as of the time when it was made and subsequent changes in the condition of affairs cannot affect the liability of the person who made it.
12 R.C.L. 303, sec. 64.
A party cannot be required to answer interrogatories not pertinent to the issue.
18 C.J., page 1102, sec. 81, and pages 1104, 1105; Thompson v. Richmond, 24 S.C. 366; Rosenberg v. People's Surety Co., 125 N.Y.S. 257; Smith v. Sisters of Good Shepard, 87 S.W. 1083; Lichtenheim v. Fisher, 39 N.Y. 553.
O.B. Triplett, Jr., of Forest, for appellee.
One-half of the monument benefit constituted a part of the total permanent disability benefit. Appellee was entitled to invoke the provisions of section 5171, Code of 1930. This code section was an integral part of the insurance contract.
Farmer v. Sov. Camp, W.O.W., 77 So. 655, 116 Miss. 626.
One-half of the so-called paid up insurance was also thus recoverable. It was dissimilar from ordinary paid up insurance.
37 C.J., page 364, sec. 11.
Appellant perpetrated fraud upon appellee in respect to these rights.
Restatement, Contracts, sections 471 and 472, pages 891 and 896; 26 C.J., sections 17, 18 and 19, pages 1074-78; Townsend v. Hurst, 37 Miss. 679.
Because of fraud the defense of res adjudicata was, therefore, unavailing.
State v. Morrison, 60 Miss. 74; Burford v. Kersey, 48 Miss. 642; Hardy v. O'Pry, 102 Miss. 197, 59 So. 73; Gaines v. Kennedy, 48 Miss. 103; 34 C.J. 1245, page 836.
Because of fraud the defense of accord and satisfaction was equally unavailing.
Powell v. Plant, 23 So. 399; Clark v. Equitable Life Assur. Soc., 23 So. 453; Penn Mutual Life Ins. Co. v. Nunnery, 167 So. 416.
Premiums paid after submission of disability proofs were recoverable: (a) because a part thereof was paid under mistake and fraud.
Brotherhood of Railroad Trainmen v. Bridges, 144 So. 554, 164 Miss. 356; New York Life Ins. Co. v. Salmon, 157 So. 344, 171 Miss. 25; Featherstone v. Stonewall Life Ins. Co., 147 So. 305, 165 Miss. 164; Aetna Life Ins. Co. v. Thomas, 144 So. 50, 146 So. 134, 166 Miss. 53; Columbian Mutual Life Ins. Co. v. Gunn, 163 So. 454, 173 Miss. 897.
(b) Because the remainder was paid under compulsion and mistake.
Columbian Mut. Life Ins. Co. v. Gunn, 163 So. 454, 173 Miss. 897; Pacific Mut. Life Ins. Co. v. McCaskill, 170 So. 579.
(c) Because the doctrine of res adjudicata could not apply to them.
Hardy v. O'Pry, 59 So. 73, 102 Miss. 197; Harrison v. Turner, 77 So. 528, 116 Miss. 550.
(d) Because the right to sue therefor was expressly reserved in the release.
Argued orally by O.B. Triplett, Jr., for appellee.
In the fall of 1932 the appellee, C.E. Waggoner, wrote the appellant association a letter indicating his desire and purpose to apply for the total and permanent disability benefit provided in his insurance certificate in said association. Upon receipt of this letter the appellant forwarded the necessary blanks to enable the insured to make application for the disability benefits, with a letter stating that:
"In order to receive this benefit the member must make satisfactory proof of disability, and must continue the prompt payment of all monthly installments of his annual assessment until his disability claim is actually allowed and paid. Otherwise he will become suspended and his beneficiary certificate will become null and void.
"If the claim is allowed, the Total Disability Benefit amounts to one-half of the certificate less any indebtedness due the Association and the beneficiary certificate is thereby cancelled and membership in the Association terminates."
Appellee forwarded proofs of disability which were disallowed, and in June, 1934, he filed suit for $500 on the benefit provided by his certificate for total and permanent disability. This suit proceeded to judgment in circuit court and on appeal to this court was affirmed. This judgment was afterwards paid and fully satisfied, upon the execution by the appellee of a release of all liability except his claim for all monthly installments on his annual assessment, which were paid after his proof of disability was disallowed.
Afterwards appellee filed this suit in the chancery court of Scott county, seeking to recover as additional benefits one-half of the amount provided in his certificate "for the erection of a monument to his memory," one-half of certain surplus accumulations or paid-up insurance, and the monthly installments of the annual assessment on the certificate, which had been paid after appellee's proof of disability was disallowed, some of which were paid under protest. The court below allowed recovery for all the stated items, and from that decree this appeal was prosecuted.
The bill of complaint sought recovery of one-half of the monument benefit, and one-half of the "so-called" paid-up insurance, on the ground that appellant's liability therefor and duty to pay the same were fraudulently concealed from appellee, and that he was induced to pay the monthly installments of premium by misrepresentations on the part of appellant. To this bill of complaint the appellant pleaded (1) that the former suit was res adjudicata of the claim of all alleged additional benefits; (2) that the alleged monument benefit and the so-called paid-up insurance did not comprise any part of the total and permanent benefit available to appellee; and (3) that the monthly installments of premium were paid voluntarily.
Appellee's original application was for participation in the benefit fund to the amount of $1,000, and the face of the beneficiary certificate issued by appellant was for that sum, and we understand that appellee does not contend that the monument benefit was a part of the face of the certificate. On the contrary, appellee contends, and we think correctly, that the monument fund was not a part of "the face of the certificate," and since appellant's by-laws provide that the benefit for total and permanent disability of an insured occurring before the age of sixty years shall be "one-half of the face amount of the certificate," there can be no recovery of the one-half of the monument fund unless it can be sustained by reason of the facts next to be stated.
In response to an interrogatory propounded to appellant's secretary, he replied in part as follows: "The method by which this association arrived at the sum to be due B.C. Ponder was simply to take one-half the face amount of his beneficiary certificate and to give him credit for one-half the monument benefit to which his beneficiary would have been entitled had Mr. Ponder died while the certificate was in force. While the constitution, laws and by-laws and the beneficiary certificate of members do not provide for the payment of one-half of the monument benefit in case of a permanent disability claim, the association has allowed this additional sum in the settlement of permanent total disability cases."
Based upon this answer, appellee contends that there was established a long adopted course or custom of appellant to pay one-half of the monument benefit in the case of permanent disability, and that consequently, by virtue of the provisions of section 5171, Code of 1930, prohibiting discrimination in favor of individuals of the same class and equal expectation of life, appellant was bound to pay one-half of the said monument benefit to the appellee. We do not construe the language of this witness that the "association has allowed this additional sum in the settlement of permanent total disability cases" as showing any established rule or custom so to do, and if the appellant association has made this discrimination in favor of one or more designated individuals of the class, it did so in violation of the statute. Section 5171, Code of 1930, provides in part that: "No life insurance company doing business in Mississippi shall make any distinction or discrimination in favor of individuals of the same class and equal expectation of life in the amount of payments of premiums or rates charged for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any of the terms and conditions of the contract it makes."
By virtue of the provisions of this statute, a promised discrimination in favor of an individual is unenforceable, Cole v. State, 91 Miss. 628, 45 So. 11; Rideout v. Mars, 99 Miss. 199, 54 So. 801, 35 L.R.A. (N.S.) 485, Ann. Cas. 1913d 770, and discriminations in favor of one or more individuals in the payment of benefits, in violation of the statute, does not bind the offending insurance company to grant the same benefit to all policyholders. By such violation of the statute, the offending company subjects itself to the penalty of a revocation of its license to transact business in this state, but it does not bind itself to pay like benefits to all policyholders of the class. We think the court below was in error in allowing recovery on this monument fund.
During the five years next preceding appellee's application for disability benefits, there were allocated to his insurance certificate certain small dividend accumulations, or paid-up insurance, under a resolution adopted by the association, which provided, in part, as follows: "Said paid up insurance shall only be available as to each member in the event he continues his membership by the payment of all dues and assessments required of him in accordance with the terms of his certificate and the laws of the association. Should the membership of any such member become lapsed or suspended or void for any reason, said paid up insurance hereby granted shall become suspended and of no effect and null and void."
The resolution under which this so-called paid-up insurance was allocated expressly provided that it should only be available as to each member in the event he continued his membership by the payment of all dues and assessments in accordance with the terms of the certificate and the laws of the association, and that it should be of no effect and null and void if the membership of any insured became lapsed, suspended, or void for any reason. The constitution, laws, and by-laws of the appellant association require that membership in the association shall cease and the certificate be surrendered for cancellation upon receipt of settlement for disability benefits. The resolution under which the dividend accumulations were allocated contemplates continued payment of annual assessments until the death of the insured, and upon the surrender of appellee's insurance certificate for cancellation the allotments became ineffective and void, and we think the court below was in error in allowing recovery for these allotments.
The monthly installments of the annual assessment or premium, for the recovery of which appellee sues, were paid to cover the period intervening between the disallowance of his proof of disability and the final consummation of the suit to establish the appellant's liability for the total and permanent disability benefit claimed by appellee. By the payment of these installments of the annual assessment, appellee maintained his insurance certificate in full force and effect and received the full protection provided thereby, and by these payments he preserved his right to maintain his life insurance in full force and effect in the event he lost his claim for disability benefits. We think the requirement that the insured should keep his installments paid up until the final determination of his right to the disability benefit was reasonable and for the protection and benefit of the insured, and that no recovery should be allowed therefor.
The decree of the court below will, therefore, be reversed and a decree will be entered here for appellant.
Reversed and decree for appellant.