Aetna Life Insurance v. Bellos

Mr. Justice Chambliss

delivered the opinion of the Court.

(1) This bill was filed to cancel a policy of insurance on the life of a deceased assured on the ground of misrepresentation in its procurement,, and, in the alternative, to enjoin suit thereon in any other forum on the ground of suicide of the assured within one year, liability in such case being limited to the repayment of the premium, which was tendered.

A demurrer was sustained by the Chancellor on the ground of repugnancy and complainant has appealed. Repugnancy was held to appear in that in one aspect of the bill the right to relief was rested on the avoidance of the contract, and in the other on its limited enforceability.

Scales v. Insurance Co., 155 Tenn., 412, was relied on as emphasizing the distinction between these two positions, and Montlake Coal Co. v. Chattanooga, 137 Tenn., 449, for the holding that remedies of rescission and of reformation of a contract are inconsistent and repugnant. Bynum v. Ewart, 90 Tenn., 654, also, was relied on as supporting the defendant’s theory of repugnancy.

The Scales case, supra, was a suit brought on a policy by the beneficiary, and while the Court made clear the distinction between a reliance on the terms of a contract, and a repudiation of its validity, no issue of repugnancy was involved. And, in that case, distinguishing between proceedings to invoke rescission or annulment for misrepresentation in procurement, and proceedings to give application to the suicide clause, it was said, in distinguishing language pertinent here, that, “in one case affirmatve action by the insurer is required, and within a limited period; in the others the action is defensive only. ’ ’

In the oversight of this distinction appears to lie the vital defect of the bill before us. It is not so much a matter of repugnancy, as an unwarranted attempt to institute an action, by incorporation in the bill filed primarily for a distinct purpose, to which complainant has no right. The action to test and apply the suicide clause and for relief thereunder is “defensive only.”

(2) The bill appears to be properly filed insofar as it seeks annulment of the policy contract on the grounds alleged, but we think it clear that complainant had no right, to affirmative relief, either injunctive, or otherwise, in the second aspect of its bill. The defendant beneficiary alone, if the contract is hi force, has the right of action thereon. She may demand and bring suit to compel payment of the policy according to its terms at her election, choosing her time and forum. Until she chooses to act, complainant has no wrong to remedy and no right to enforce. No conditions are presented which call for or justify affirmative court action by the insurer on the policy contract, aside from a contest of its validity. The axiom “no wrong without a remedy” is conversely true • — no remedy without a wrong; That is to say, until one claims to have been wronged, or asserts an actionable right, the courts are not open to him.

In the instant case we find no ground on which complainant can force defendant into a forum, and at a time, of complainant’s choosing, and thus compel defendant to litigate the issue of the suicide of her husband.

The case in this aspect is not one for a declaratory judgment, even were the bill with its prayer framed to this end. .The principles governing declaratory judgment proceedings, announced in Newsum v. Interstate Realty Co., 152 Tenn., at pages 304, 305, apply here. Disputed facts would here be determinative issues, rather than “construction of definitely stated rights, status, and other relations, commonly expressed in written instruments,” etc.

Nor is this affirmative action justified by a threatened multiplicity of suits, or apparent necessity of reliance upon purely equitable defenses, which are recognized as grounds for appeals to a court of equity in avoidance of embarrassment. The prayer, going to this aspect of the bill, is for an injunction to restrain the defendant “from seeking to enforce the said policy of insurance in any court other than this Court,” etc. Fundamentally the remedy of injunction is to prevent a wrong. It had its origin in the inadequacy of the relief obtainable in actions for damages. No threat of a wrong, or of possible damage, is here set up. The bringing of her suit on this policy when, where and as she may elect, if at all, is the exclusive right of the holder, and her exercise of this right involves no wrong to complainant.

It results from the views expressed that so much of the bill as sought to have adjudicated in this suit, and no other, the amount of the liability of the complainant under its valid contract of insurance, requiring a decision particularly, of the issue of the. suicide of the . assured, was clearly demurrable. A motion to dismiss the bill in this aspect, and as to this part, would have been well grounded, or the Court might well have dismissed the bill with respect to this phase of it on its own motion, as without equity.

It is plausibly urged that the learned Chancellor was in error in sustaining that ground of the demurrer which challenged the bill for repugnancy. In Bynum v. Ewart, and in Montlake Coal Co. v. Chattanooga, supra, the complainants were seeking to enforce contract obligations on alternative grounds which were antagonistic. Asking affirmative relief and relying on the contract, they asserted (1) the validity of the contract, and, in the same suit, in the alternative, (2) attacked its validity and sought to recover equivalent relief on this inconsistent theory. This, it was properly held in these cases, was objectionable for repugnancy. Complainant here is not relying on and seeking to enforce a contract in either aspect of its bill, but to obtain relief from it not on it. In the one aspect it seeks to repudiate it for invalidity in its making; in the other aspect it maintains that if valid and the beneficiary may rely on it, the obligation under it is limited by its terms to the amount of the premiums paid, which is nominal. Both are defenses against the insurance contracted for. One may be asserted affirmatively, eo necessitas, because of the limit of time, but not so the other.

(3) The principle of repugnancy in pleading is that one may not rely on a contract and at the time time deny its validity. Its application appears to be confined to affirmative rather than defensive positions. Sued on a contract, one may defend by a denial of its validity and at the same time an assertion of its satisfaction. The defendant may rely for his defense upon the plea that the execution of an obligation was procured by misrepresentation or fraud and is therefore invalid and nonenforceable, and at the same time show that if binding the extent of his liability is limited by its terms, or reduced or satisfied altogether by payments; or that the consideration for it has failed. For illustration, take the instant case. If the beneficiary had brought suit on the policy within the contestable period, the Insurance Company defending might have denied liability on the ground, first, that the policy had been procured by misrepresentation, and, second, that the assured had committed suicide within one year, and that the liability was thereby limited to the amount of the premium.

(4) Since the statute of 5 Anne the pleading of different defenses has obtained, and in modern practice, independent of code provisions like ours in Tennessee, inconsistent pleas are quite generally permitted, “not withstanding apparent repugnancy between them.” 31 Cyc., 148. In this State our statute (Shan., 4628) is ex plicit in providing that the “defendant may plead as many pleas as he has real grounds of defense.” And this Court has expressly held that “these pleas may be inconsistent.” Shelby Co. v. Bickford, 102 Tenn., 408. In that case, the defendant plead first a denial of the undertaking or covenant sued on, and second that he owed nothing on it. Non est factum and payment may be joined. So there can be no doubt that as defenses both the grounds of nonliability set up in the bill would be available to the Insurance Company.

The apparent confusion here arises out of the fact that while the action is in substance defensive, it is in form affirmative. But it is nevertheless true that, complainant though it is, the Insurance Company here is not bringing an action to recover on the contract, but for relief from it.'

But, however this may be, as before stated, we are of opinion that the bill states a good cause of action in its first aspect and should be sustained to that extent, but complainant is entitled to no relief in the second aspect. The cause being here de novo this Court may do what it appears to us should have been done by the learned Chancellor, namely, dismiss the bill insofar as it seeks to adjudicate the claims of the defendant under the suicide clause of the policy, and permit it to stand insofar as it seeks to contest its validity for misrepresentation in its procurement. The decree will be so modified and the cause remanded for further proceedings in accordance with this opinion. The costs of the cause to this date, including the costs of the appeal, will be paid by the appellant.