Brooklyn Life Insurance v. Bledsoe , 52 Ala. 538 ( 1875 )

BRICKELL, C. J.

The Code provides, “ All pleadings must be as brief as is consistent with perspicuity, and the presentation of the facts or matter to be put in issue in an intelligible form; no objection can be allowed for defect of form, if facts are so presented that a material issue in law or fact can be taken by the adverse party thereon.” R. G. § 2629. Again, “ Any pleading which conforms substantially to the schedule of forms attached to this part is sufficient.” R. C. § 2630. Independent of statutory provisions, the rules of pleading are the same in their application to the contract of insurance as to other contracts. The contract or policy of insurance must be declared on, in hcec verla, or according to its legal effect; the plaintiff’s interest in the subject of insurance; tbe payment of the premium ; the inception of the risk ; the performance of any precedent condition or warranty contained in the policy, and the loss, or happening of the event, on which within the terms and meaning of the policy the liability of the insurer attaches, must be alleged. 2 Green. Ev. § 376. The general rule applicable to all executory contracts is, that if the defendant’s performance depended upon a condition precedent, the plaintiff must aver the fulfilment of such condition, whether it is affirmative or negative, or to be performed or observed by him, or the defendant, or a mere stranger to the contract, or must show an excuse for non-performance. If non-performance is excused, the matter of excuse must be distinctly averred. 1 Chit. PI. 320-26. These rules of pleading at common law have been modified, and to some extent abrogated by the statutory provisions to which we have referred. The schedule of forms attached to the third part of the Code has the form of a complaint on a policy of marine insurance. R. C. p. 676. It is very brief, and is a simple statement that the plaintiff claims of the defendant the value of certain goods, not describing them, which the defendant on a certain day insured against loss or injury, against perils of the sea, and other perils in the policy mentioned, from a certain port to another, on board a certain vessel, which goods were lost by the shipwreck of the vessel on her voyage, of which the defendant had notice. This is a bare statement of a legal conclusion, not of facts from which the court on an inspection of the pleading could draw the conclusion that the plaintiff had a just cause of action against the defendant. There is also a form of complaint (B. O. p. 675) on a dependent covenant or agreement. It is a mere allegation that the plaintiff’s cause of action is the breach of a covenant or agreement entered into, on a certain day, the substance of which is to be stated, followed by the general statement, that although the plaintiff has complied with all its provisions on his part, the defendant has failed to comply with the terms or stipulations forming the breach, of which complaint is made. These forms have the force of law. Crimm v. Crawford, 29 Ala. 623. They will support a judgment by default, as if every fact essential to the plaintiff’s right of recovery was formally averred. Randolph v. Sharpe, 42 Ala. 265 ; Letondal v. Huguenin, 26 Ala. 552; Pickens v. Oliver, 29 Ala. 528 ; Pike v. Elliott, 36 Ala. 69.

We shall not inquire whether the complaint, if tested by the rules of pleading at common law, would be subject to the causes of demurrer interposed. For if it is conceded that under these rules the plaintiffs should have set out the application for insurance, and averred the truth of its statements, the necessity of the averment is dispensed with by these statutory enactments. Whether the statements in the application are to be regarded as conditions precedent or warranties, it was not necessary for the plaintiff to notice them. A mere statement of the contract or policy, followed by the general averment that the plaintiffs had complied with all its provisions on their part, and that the defendant had not in a specified matter performed it, is sufficient. In defence, the defendant may set up the non-performance of any condition precedent, or the breach of any warranty, on which his liability depends, and it will be as available as if it appeared on the face of the complaint. The complaint is certainly in substantial conformity to the analogous forms prescribed by the Code, and is therefore sufficient.

Nor was the complaint demurrable, because, according to its averments, the policy was void for uncertainty. The uncertainty is supposed to lie in the designation of the beneficiaries by the general term of “ Children of John Wilson Bledsoe.” In deeds and in devises, the donee or devisee is frequently described merely by his relation to another, and a gift or devise to children has never been supposed to want any element of certainty. In policies of life insurance, the beneficiaries are often designated by no other term than that of children of the person whose life is assured, and their rights have been enforced. Bliss on Life Ins. 530-35. There was no variance between the complaint and the policy offered in evidence. “ Children of John Wilson Bledsoe,” and “ The children of John Wilson Bledsoe,” embrace the same persons, and no others, and are but different inodes of designating the same class.

Several of the exceptions resolvé themselves into a single point. The complaint avers the plaintiffs have performed all the conditions on which their-right of recovery depends. The proposition in the circuit court was, under this averment, to make proof of an excuse for the non-payment of an annual premium, on the payment of which the continuance of the policy and the liability of the company depended. The court, against the objection of the appellant, admitted the evidence. As we have already declared, if the plaintiffs had followed strictly the analogous form of complaint prescribed by the Code, it would have been sufficient for them to state that their claim was founded on a policy of insurance of a certain date, issued on the life of John Wilson Bledsoe, by which the defendant promised to pay to them a certain sum on his death, and that he died prior to the institution of suit, of which the defendant had notice. All other allegations are rendered unnecessary. If the. liability of the insurer has not attached, whether from a default of the plaintiffs, or from any other cause, it is matter of defence, which may be presented by plea. ' Apart from this view the policy became a binding contract on the payment of the first cash premium, and although it is declared that it is made upon condition that it is to cease’and determine in the event of a failure to pay the annual premiums as they become due, a breach of this condition is matter of defence, the burden of proving which rests on the insurer. It was not necessary, therefore, for the plaintiff to have averred a performance of this condition, or an excuse for its non-performance. 1 Bigelow’s Life & Accident Ins. Rep. 218. When, therefore, it was urged as matter of defence that the policy was forfeited, or had, in its own words, ceased and determined by the failure to pay, as it was due, the annual premium,- matter of excuse for the failure was properly admissible.

It is apparent the policy was obtained by a father on ’his own life for the benefit of his infant children. The policy was issued and accepted on the expectation that he would pay the premiums. The beneficiaries had a right to adopt the contract, pay the premiums, and keep the policy alive; yet, it was not the expectation or the intention of the real contracting parties that they would do so. The duty of making the payment devolved on the father. After the annual premium had become due, and default had been made in its payment, the father, in the course of settlement of accounts with a former partner, charged himself with moneys collected on partnership debts, and declared he had made the collections to pay the premium, but did not pay because he had been informed by the secretary of the company the policy had been cancelled. To the introduction of these declarations in evidence the appellant objected, but the objection was overruled. The evidence is hearsay, in its most objectionable and dangerous form, and consists of exculpatory declarations, made by a party in the absence and without the knowledge of his adversary who is to be affected by them. A party’s acts or declarations are never admissible as evidence for him, unless they constitute part of the res gestee. The specific fact it was proposed to prove was, that the declarant was in readiness to pay, but had been prevented from making the payment of the premium by the act of the company. The time of payment had passed nearly a month before these declarations were made. Whatever, if any act was done, preventing the payment, must have been at or before the day of payment. It was therefore antecedent to these declarations. The res gestee includes only facts, circumstances, or declarations attending the main fact, springing out of it, and cotemporaneous with it. It is true they need not be exactly coincident in point of time with the main fact, but they must be so near it as to bear the relation of unpremeditated result to it. These declarations are wanting in this element of nearness, did not spring out of, or have any connection with the main fact, but grew out of a different transaction with a mere stranger, and are merely narrative of the main fact and the circumstances attending it. Nelson v. Iverson, 17 Ala. 216; McBride v. Thompson, 8 Ala. 650 ; Gandy v. Humphries, 35 Ala. 617. Hearsay is excluded not only because it generally presupposes the existence of better evidence, nor because of its intrinsic weakness and incompetency to satisfy the mind, but because of the frauds which could be practised under its cover. 1 Green. Ev. § 99; Glover v. Millings, 2 St. & Port. 28. A like reason obtains for the exclusion of a party’s own declarations or acts when offered as evidence for him. If a party could by his own acts and declarations, made in the absence of the other party, manufacture evidence to excuse his non-performance, there could not be many contracts capable of enforcement. The widest door to fraud would be opened. Parties would find themselves stripped of their rights by the mere declarations of their adversaries in interest, of which they had not knowledge until offered in evidence against them. There was manifest error in the admission of the evidence of the witness Coleman ; it should have been excluded.

The evidence of the witness Daniel, that Dr. Bledsoe spoke of the fact that the premium was becoming due, and of the source from which he expected to obtain money to pay it, and of his proposition to loan him the money to make the payment, was also inadmissible. It is subject to the objection that it is nothing more than the declarations of a party offered as evidence in his favor, capable of being manufactured to meet his own delinquencies. The evidence of this witness as to Dr. Bledsoe’s ability to make the payment would be admissible in connection with legal evidence of an excuse for the non-payment.

In answer to a letter from the father, asking an extension of the time of payment of the premium, the secretary of the company replied stating that the policy had been cancelled on. the bo.oks of the company, because no payment had ever been made to the company on it, and requesting him, if the premium had been paid to a deceased agent of the company, to send them a certified copy of the receipt for the payment, and to state when and to whom it was paid, as no premium had been sent them, and they had no record of the payment. These letters having been given in evidence, connected with evidence of the fact that the cash premium had been paid to a deceased agent of the company, the appellant proposed proving that it had never received this premium, was ignorant of its payment, and of the delivery of the policy. The evidence was rejected. The payment to the agent, his authority to receive it not being disputed, was a payment to the company, rendering the policy obligatory as a contract. The cancellation by the company did not affect its validity, or impair the rights of the assured, or of the beneficiaries. They could, by paying or offering to pay the premiums as they became due, have kept it alive, as completely as if the cancellation had not been made. The cancellation was a mere error, which, if not accepted by the assured as a rescission of the contract, could not prejudice either party. The appellant should have been permitted to prove the error in which it originated, and thus have relieved itself from any imputation of an intentional abandonment of the contract, with knowledge that the assured had performed his part, and was relying on it as valid.

The report and decree of insolvency of the estate of the-assured, had in the court of probate, was properly excluded. The effect of the report and decree is simply to declare the status or condition of the estate, as between the personal representative and the creditors. They alone are parties to it, capable of contesting the facts on which it is founded, having interests affected by it, or in any wise concluded by it as a judicial proceeding. As to all other persons, it is res inter alios acta, and not evidence of the insolvency of the decedent, or of any other fact involved in it. McGuire v. Shelby, 20 Ala. 456 ; State Bank v. Ellis, 30 Ala. 478.

When this policy was issued, the statutes of this State required foreign insurance companies, transacting business here, to procure a certificate of authority from the comptroller. This certificate could be issued only on the filing of a certain statement, and paying a certain sum to the .Fire Department Association and Medical College of Mobile. ' Any person violating the statute was declared guilty of a misdemeanor, and subject on conviction to fine and imprisonment. R. C. §§ 1180-91. To show the illegality of the policy, the appellant proposed proving its failure to observe the statute. That the .contract of insurance was made here does not seem to have been a disputed fact. The company may have violated the statute, and the agents making the contract may have been liable to the penalty imposed; but neither the assured nor the beneficiaries were involved in, or affected by their guilt. While it is a settled principle, that a contract founded on an act prohibited by statute is void; yet it is subject to this qualification, that although the legislature may forbid the doing of a particular act, a party not privy to it, or involved in the guilt of the transaction, may recover of the guilty actor unless the act itself is void. Whetstone v. Br. Bank Montgomery, 9 Ala. 875.

The statute did not declare void the policy or contract of insurance made here, by a foreign company, without a certificate .of authority. Its purpose was not to absolve the company from liability on its contracts made here. The object was to afford our own citizens ample security against loss, because of transactions had here with the companies. The company and its agents are alone guilty under the statute, if they violate it. Such violation they cannot invoke as .a protection from liability on their contracts. There was no error in excluding the evidence offered to show its want of statutory authority to transact business.

The policy, by its terms, is forfeitable, is to cease and determine and the insurer to be freed from all liability, if the annual premiums were not paid when they became due and payable. The continuance of the policy as a contract — its life — depended on the prompt payment of the premiums. The payment was manifestly the condition precedent, on whieh the parties respectively stipulated for its continuance, and on the non-performance of which they assented to its extinction. Howell v. Knickerbocker Life Ins. Co. 2 Big. Life & Acc. Ins. Rep. 132; Robert v. N. E. Mut. Life Ins. Co. Ib. 141. It is an elementary principle, that the performance of conditions precedent may be waived, or, if the party, whose responsibility is to arise on their performance, by any act of his prevents performance, the opposite party is excused from a strict compliance. He must, however, prevent performance — he must be the proximate, not the remote cause — the causa causans, not the causa sine qua non. 2 Chit, on Con. 1087. The charge given on the request of the appellee, and the first and second charges requested by the appellant, which were refused, present the same question. The charge given and the charges requested are the converse of each other. That question is, whether the cancellation of the policy by appellant on its books, in ignorance of the fact that the cash premium had been paid, on the payment of which the policy became operative, and the letter of appellant’s secretary informing the assured of it, written in response to the application of the assured for an indulgence, or extension of the time for payment of the premium, can be regarded as preventing the assured from making payment, or as excusing him from the duty of paying on the day fixed, if he would continue the policy.

The plaintiffs’ action proceeds on the hypothesis that the policy was a binding contract, conferring on them rights, and fixing on the defendant liabilities, which they claim to enforce. If the policy was such a contract, it needs no argument to support the proposition, that it was not in the power of the company to rescind this contract, or by its own act or omission to absolve itself from the liabilities it imposes. The cancellation of the policy on its books was nugatory — impairing no right of the assured, and diminishing no liability it had assumed. As it required the assent of the assured to make the contract, so his assent was necessary to its rescission or renunciation. May on Ins. 567. The policy — which is now the foundation of the action, which is the highest and best evidence of the rights of the assured, and of the liabilities of the insurer — remained unaltered, without a blur or mark on it, exciting suspicion, or requiring explanation, in the possession of the assured, unaffected by this cancellation. The existence of the policy on the books of the company was merely evidence to it of the number and extent of its risks. It was no more than the entry on a merchant’s books of his bills payable, or other debts. The cancellation or erasure of such an entry could work no injury to those having debts against him. How then could the cancellation, which was impotent to harm the assured, and impotent of benefit to the insurer, have prevented the assured from performing the condition on which the continuance of the contract depended ? If the assured desired to keep the policy alive, it should have quickened his diligence in the performance of the condition. It may have indicated a purpose on the part of the insurer to renounce the contract, but sucb renunciation was not within its power, without tbe assent of the assured. It could not impede or binder the assured from making tbe payment or offer to make it, at tbe appointed time, and tbus keep the policy alive. If be had made tbe offer, tbe cancellation would not have justified its rejection. Tbe policy would have continued a contract as binding on tbe insurer as if tbe cancellation on tbe books of tbe company bad not been made. It is not material be was not informed of tbe cancellation until a few days before tbe premium was payable. Tbe.fact itself is immaterial, and of consequence, tbe time tbe assured acquired knowledge of it cannot be important.

There is nothing in tbe letter of the secretary indicating that tbe company would not receive the annual premium, if it was tendered when it became payable. It states tbe cancellation of tbe policy was made because no payment bad been made upon it to tbe company, and requests, if tbe payment was made to a deceased agent of tbe company, that a certified copy of tbe receipt be sent them, with a statement of tbe time, manner, and person to whom it was made. Tbe evidence tbus requested was necessary to enable it to recover from tbe agent or bis representatives, if payment bad been made to him; and it was proper it should be furnished tbe company, to satisfy it of tbe fairness of tbe contract tbe company supposed bad never been completed. Tbe request indicates rather a purpose to continue tbe contract, if it was fair, and it was compbed with by tbe assured, than a purpose unlawfully and without cause to renounce it.

Whenever a party has been excused from the performance of a condition precedent, because of tbe act of the party to whom performance is due, the act relied on has invariably been of a character that rendered performance impossible; or induced tbe belief that it was waived; or that if it was offered it would not be accepted. An act not of this character cannot be regarded as preventing performance, as the proximate cause of non-performance. From the evidence no sucb act is imputable to tbe appellant, and tbe non-payment of tbe premium is without excuse. It is a breach of a condition on which tbe continuance of tbe policy depended. Tbe court erred in tbe charge given on request of tbe appellees, and in tbe refusal of tbe first and second charges requested by the appellant. It is not necessary to notice tbe remaining assignment of errors, as what we have said will probably enable tbe court on another trial to dispose of tbe case correctly.

The judgment is reversed and tbe cause remanded.