New York Life Insurance Co. v. Nashville Trust Co.

PREwxtt, Justice

(dissenting).

The questions herein presented are ones of law raised by the demurrer, the grounds of which are in substance as follows:

(1) That the former judgment is res adjudicata, and is conclusive as to the death of Buntin by reason of his unexplained absence for a period of seven years; (2) that the present suit is barred by the six and ten year statutes of limitations; (3) that the facts averred as fraud in this cause were considered in the former suit and determined adversely to complainant, and there are no facts of fraud charged against the defendants as trustees or beneficiaries, and the alleged fraud of Buntin is not attributable or imputable to said defendant; (4) that no facts are averred which would justify a trust being imposed upon the funds held by defendant Bank, and that said funds are being held as a result of a valid judgment since the date of payment on March 10, 1942, have been held adversely to complainant and any action *538by it is barred by the six and ten year statute of limitations; and (5) that the only alleged mistake was that the Courts erroneously concluded Buntin was dead, which mistake was intrinsic and foreclosed by the prior judgment as a direct issue in that cause, and likewise the only facts averred to be fraudulent are of intrinsic fraud and foreclosed by the judgment in the former cause.

Now there can be no doubt that the Chancery .Court has a right to grant relief against judgments which have been obtained through fraud, accident or mistake. See Gibson’s Suits in Chancery, Fourth Edition, Section 814, page 659.

In this connection the complainant relies upon the case of Fidelity Mutual Life Insurance Company v. Clark, 203 U.S. 64, 27 S.Ct. 19, 51 L.Ed. 91. It appears that this was a fraud case, but the case relied on is distinguishable from the one at bar because the defendant beneficiaries herein are charged with no conspiracy or fraudulent acts whatsoever.

The principles set out above in Gibson’s Suits in Chancery and also recognized in the case just cited above on this general proposition of jurisdiction is not controverted by the defendants, but it is contended by them even though the facts charged herein constitute' fraud, the same would amount only to acts of intrinsic and not extrinsic fraud, and further under the principle of res adjudioata, the rights of the parties have been settled and this suit cannot be maintained.

The defendants contend that the Insurance Company, in the prior proceeding, took the position that Buntin voluntarily left Nashville to join a young woman, and undertook to prove that he was actually alive as late as January, 1935.

*539The defendants insist that where a fact had been judicially passed npon the factual question may not be reopened merely because it had been incorrectly decided in a former suit. See King v. Vaughn, 16 Tenn. 59; Douglas v. Douglas, 156 Tenn. 655, 4 S.W.2d 358, 359, wherein it was stated:

“Certain general principles are pertinent. We find in Bouvier’s Dictionary the following’ definition of res judi-cata, given by Lord Hardwick, in Gregory v. Molesworth, 3 Atkins, 626, considered by some writers the best: ‘When a question is necessarily decided in effect though not in express terms between parties to the suit, they cannot raise the same question as between themselves in any other suit in any other form.’ ”

Complainant insists that the fraud of Buntin was extrinsic in that he disappeared and deliberately kept himself away, and that as a result of his disappearance the Company as a defendant in the Circuit Court had no opportunity to meet the testimony of the beneficiaries because of the outside act of the insured. It is contended that his conduct was as much an extrinsic fraud as keeping the unsuccessful party, or a witness away from the court, both of which are recognized as extrinsic fraudulent acts.

The Court in the case of Keith v. Alger, 114 Tenn. 1, 24-25, 85 S.W.71, 77, after discussing the various cases involving extrinsic and intrinsic fraud said:

“It is perfectly clear that no one should be allowed to enforce a judgment which was procured by any of the fraudulent practices catalogued in Pico v. Cohn, supra [Pico v. Cohn, 91 Cal. 129, 25 P. 970.], and United States v. Throckmorton, supra [98 U.S. 65, 25 L.Ed. 93], or other similar fraudulent practices; but it *540is equally clear that there must be at some time an end of litigation, and that the parties to a record, or the privies thereto, should not, in general, be allowed to retry the same issues after final judgment and the exhaustion of correctory and appellate proceedings. Carried to its ultimate, there would be no end to such retrials. The second case could be retried by a third, and the third by a fourth, and so on ad finitum, and nothing would ever be settled. ’ ’

A still later case is Thomas v. Dockery, 33 Tenn. App. 695, 232 S.W.2d 594, 598, which recognizes the intrinsic and extrinsic fraud rule and relies upon Keith v. Alger, supra. The Court of Appeals make this statement:

“Under the ruling of the Keith case and by the weight of authority a judgment that has become final in the full sense of res adjudícala may not be set aside on allegation and proof of the falsity of the internal evidence, on which it was procured. See discussion in Noll v. Chattanooga Company, Tenn. Ch. App. 38 S.W. 287, 290, Sharp v. Kennedy, 13 Tenn. App. 170, 176.
“The reason for the rule is that litigation must be brought to a close; it would never terminate if each party successively could reopen the last judgment by charging false evidence.”

The law, as pronounced by a majority of the cases, is that equity will not relieve for fraud which leads to an erroneous judgment after a trial which is otherwise fair, but only in cases where the party has been prevented from having a fair trial. But it seems that the intrinsic rule is only in the case where the party has been prevented from having a reasonably fair trial. Whether or not Buntin had died prior to March 8, 1933, was the issue on the previous trial. The company was not misled *541by B on tin’s disappearance, or the mailing of the will by him to his relatives.

The complainant has had its day in court, without any misapprehension or mistaken belief as to what the facts were, but it could not convince the Courts.

The insurance policies issued by complainant on Bun-tin’s life constituted contracts between it and the designated trustee thereunder, whereby the Company agreed to pay certain amounts upon proof of death of the said Buntin.

The rule in Tennessee is to the effect that insurance companies may expressly protect themselves from the liability of presumptive death, created by unexplained absence, J-f they see fit to do so. In the case of Mays v. Sovereign Camp W. O. W., 151 Tenn. 604, 620, 271 S.W. 34, 38, 40 A.L.R. 1266, it was said:

“An insurance company has a right to contract as to the nature and extent of the risk assumed, and we see no good reason why a benefit society, operated in the interest of its members and not for profit, cannot, by contract limit its liability to actual or physical death, or presumptive death after the period of life expectancy of the insured has expired. In other words, we see no reason why it cannot exclude, by contract, liability for a presumptive death; and no valid reason occurs to us as to why such a contract in any sense offends the public policy of the State.”

In the case of Redwine v. Metropolitan Life Insurance Company, 178 Tenn. 83, 156 S.W.2d 389, the question arose as to whether or not the proceeds of a certain policy of insurance were payable to a named beneficiary, or to the estate of the deceased. The named beneficiary *542had disappeared and remained away for more than seven years. The company was insisting upon the right to have the estate of the deceased pnt np an indemnity bond to protect it in the event that the named beneficiary appeared and claimed the benefits of the policy. This Court said 178 Tenn. at page 85, 156 S.W. 2d at page 390:

“The common law presumption of death from disappearance for seven years is well established. 25 C.J.S., Death, sec. 6, page 1055, and 16 Am. Jur., Death, sec. 24, page 23. The Insurance Company drafted the policy knowing this rule. Language requiring a bond could have been inserted. See Mays v. Sovereign Camp, 151 Tenn. 604, 271 S.W. 34, 40 A.L.R. 1266. In that case a provision that only proof of ‘actual’ death would suffice was upheld.”

In this connection see New York Life Insurance Co. v. Chittenden & Eastman, 134 Iowa 613, 112 N.W. 96, 98, 11 L.R.A., N.S., 233, wherein the following language is used:

“Had a judgment been secured in an action by the administrator with authority to represent the rights of all persons interested in the proceeds of the policies, such judgment would have been conclusive as to the death of Jarvis, and the company could not, after paying the amount of such judgment, have recovered back the money paid on discovering that the essential fact in issue in the case, to wit, the death of Jarvis, had been erroneously adjudicated. The judgment would have been conclusive as to that fact.”

In this connection we refer to the case of Steele v. Metropolitan Life Insurance Company, 196 N.C. 408, 145 S.E. 787, 789, 61 A.L.R. 821, wherein it was held that the *543beneficiary of a life insurance policy could not be required, as a condition of recovering judgment tbereon, to give a bond for the protection and indemnity of the insurance company, in the event of the reappearance of the insured, who had been declared dead because of the seven-year presumption rule. The Court said:

“The presumption of death after seven years’ absence of one who has disappeared and has not been heard from, after diligent search and inquiry, in reason and by authorities, applies to those who are insured. The presumption of seven years has long been the common law, which obtains in this jurisdiction. The contract of insurance is interpreted in reference to existing laws pertinent to the subject. The laws in force become a part of the contract as if they were expressly incorporated. The issue found by the jury is that the insured was dead at the date of the bringing of this action. By the verdict of the jury it was established that the insured is in fact dead so far as the rights of the parties are concerned. The court below had no power to impose on plaintiff the giving of bond, as set forth in the judgment.”

The above statement is in line with the rule in this State and that is these laws were in force at the time of the writing of the contract of insurance, among them being the seven-year presumptive rule and became a part of the contract as if it were expressly incorporated into the policy.

As pointed out above if the company had so desired in the present cause it could have easily placed a provision in the policy in question requiring proof of actual death. The company can guard against such contingencies by such a provision in its policy.

*544The Insurance Company further contends that if the seven-year presumption had been the only thing in the case, nothing would have been paid because the policies lapsed on March 8, 1933. The company insists that because of fraud perpetrated by Buntin in disappearing and sending back documents to his grandfather and uncle, which amounted to suicide notes, the Court was misled into saying that the insured was dead, when, in fact, he was alive then and is alive now, and that the beneficiaries are chargeable with his fraud. The contention is not sound because no fiduciary relation existed between the Company and Buntin, and the Company was not deceived by his disappearance or any of his subsequent acts. Furthermore, even if Buntin’s conduct was such that our Courts were misled by it, the very issue which we are concerned with now was presented at the former trial of the case, and has been rendered adversely to the Insurance Company and the plea of res adjudicaba is good.

There is another reason why the bill in the present case cannot.be maintained and that is the ten-year statute of limitation, which is contained in Section 8601 of the 1932 Code and is as follows:

“Ten years against guardians, executors, administrators, public officers, and on judgments. — Actions against guardians, executors, administrators, sheriffs, clerks, and other public officers on their bonds, actions on judgments and decrees of courts of record of this or any other state or government, and all other cases not expressly provided for, shall be commenced within ten years after the cause of action accrued.”

The question is whether or not Buntin’s acts are chargeable to the defendants so as to toll the running of *545the statute of limitations. The defendants were not guilty of any fraud or collusion with the insured. They are not even fraudulent grantees of Buntin, and they obtained their benefits from the company by virtue of a judgment affirmed by this Court. In the proceeding herein the insured was not even a party. See Boro v. Hidell, 122 Tenn. 80, 99, 120 S.W. 961.

We are of the opinion, that in the absence of some fraudulent concealment on the part of the defendants, the complainant’s cause of action, if any it had, has been barred by the ten-year statute of limitations.

Finally, complainant insists that regardless of anything else equity will not suffer a wrong without a remedy, and it insists that in equity, good conscience, honesty and decency, it is entitled to the money paid under the prior judgment.

Mr. Gribson in his Suits in Chancery Section 33, says that ‘‘equity will not suffer a wrong without a remedy,” and that must be a civil injury to complainant’s rights or interests, legal or equitable, before equity can apply the maxim.

There are many instances wherein Courts of Chancery are prevented by well-recognized legal principles from enforcing claims which in equity, good conscience and honesty should be enforced. For instance, an honest debt may be admittedly unpaid, but barred by the six-year statute of limitations. One may solemnly promise orally to pay the debt of another, but the statute of frauds may be successfully interposed in favor of the promisor, if such a promise is not reduced to writing.

If the courts of equity were not required to follow the law, there would be no stability in the administration of justice.

*546I am of the opinion therefore that the law in the case at bar was settled by this Court in the case of Nashville Trust Company v. New York Life Insurance Company, supra, and the judgment in said case is res adjudicaba of the issues herein presented, and is binding upon us.

Furthermore, I am of the opinion that the suit of complainant is barred by the statute of limitations, and that the suit should be dismissed as was held by the Chancellor.

Swepston, Justice, concurs, except as to Statute of limitations.