Smith v. Massachusetts Mut. Life Ins. , 167 F.2d 990 ( 1948 )

SIBLEY, Circuit Judge.

The situation, as shown by the record, is this. Appellant, Mrs. Selene R. Smith, is beneficiary in two policies of life insurance on the life of her husband for $5,000 each issued in 1934 by the appellee Massachusetts Mutual Life Insurance Company. Each contains a provision that if the death of the insured shall result directly or indirectly from operating or being in or on or riding in any kind of aircraft, whether as a passenger or otherwise, the amount payable shall be limited to the reserve less any indebtedness. The reserve on each is a little over $700. On January 23, 1943, Smith, being in the Army, started with others on an airplane trip in the line of duty from Puerto Rico to Waller Field on the island of Trinidad and the plane disappeared, and neither it nor anyone on it has been heard from since. The War Department reported to Mrs. Smith that her husband was missing, then that he was dead; but the latter report was withdrawn on the ground that there were small islands <n the line of flight and death was not proven, and the report of missing was renewed. At the end of a year, there still being no news, the War Department declared him “presumed dead” for purposes of terminating pay and allowances, and settling accounts and death gratuities. Mrs. Smith probated her husband’s will and qualified as executrix, and made claim against another insurance company stating the facts as above. The appellee tendered her a settlement on the basis of the reserves on its policies, but she refused it and elected to continue the policies by charging the premiums against the surrender values as provided in the policies, which would automatically carry them beyond seven years from her husband’s disappearance, she hoping that he would reappear, or that it would turn out that he had not died from riding in an aircraft. A statute of Alabama, however, passed July 7, 1945, Gen.Acts 1945, p. 499, Code 1940, Tit. 7, § 386(1), declares that a written communication from the War Department that a person in the armed forces “is dead shall be prima facie evidence of the death of such person”. Relying on this statute and the circumstances above detailed, the appellee brought this suit against Mrs. Smith in Alabama for a declaratory judgment that its policies have matured and that the tendered sums are all that is due on them. She moved to dismiss the suit as not stating a claim on which relief can be granted, which was overruled. By answer she denied that there was any present controversy, or any occasion now to declare the rights and relations of the parties; that she did not yet know whether her husband is living or dead, or if dead what caused his death, and for want of information she denied the allegations thereabout; she denied the plaintiff’s right to a declaratory judgment and prayed a dismissal of the complaint. The case was tried with the assistance of a jury which answered interrogatories, and on them the judge made a judgment for the insurance company. Mrs. Smith appeals.

Seven years have not yet passed since the disappearance of the insured. The Alabama statute does not apply, for the communication from the War Department that Smith was dead was by it withdrawn and substituted by one that he was missing, before the statute was passed. The final communication that after a year he is “presumed dead” for certain purposes is not a communication that he “is dead”. The War Department does not know he is dead and has not said so as a determined fact. The conduct of Mrs. Smith in taking out administration and making a claim against the other insurance company is a sort of admission but it is not an estoppel; and when it is made fully to appear that she does not know the fact the admission loses all weight as evidence in this case with a third party. The judge erred in directing the jury to find that Smith is dead.

But we will not reverse the case for a new trial, because we think Mrs. Smith’s contention that it is premature, and does not present, a situation where a declaratory judgment is called for ought to be sustained. The declaratory judgment is here sought quia timet. “A declaratory judgment, like other forms of equitable relief, should be granted only as a matter of judicial discretion, exercised in the public interest. (Citing cases.) It is always the duty of a court of equity to strike a proper balance between the needs of the plaintiff and the consequences of giving the desired relief”. Eccles v. Peoples Bank, 68 S.Ct. 641, 644. The appellee puts forward, as the reasons why it should be given a declaratory judgment now, that Mrs. Smith is tendering the indebtedness against the policies and if the tender is accepted the reserves will automatically carry the premiums till February, 1950, more than seven years from the insured’s death (meaning his disappearance), and if said payment is accepted, or if any premiums are accepted, it will likely estop it to claim the aircraft provision, to its irreparable damage. By amendment it was further alleged that appellee might lose its evidence or its witnesses might disappear. None of these fears are weighty. Surely the acceptance without conditions of a debt due on the policy would not prejudice the Company. It is entitled to this payment in any event. It need not accept premiums if it fears an estoppel therefrom. 'None are now offered or need be till after the seven years. The policies will simply be in suspense, as life policies normally are till death is established. The trial has demonstrated that the Company has no evidence save the War Department records, and no oral testimony of importance. This testimony is now preserved by this trial should these witnesses die. On Mrs. Smith’s side, she may acquire important evidence. Her husband is not yet known to be dead nor so presumed by any law binding on her. She may learn that her husband, if dead, did not die by reason of the airplane trip, but survived it and died from other causes. She ought not to be hurried into a res judicata now, when it is known she cannot answer the circumstances which do-indicate death from riding in an airplane, but not at all conclusively. We are of opinion that on a just balance of inconveniences there is no need now for a declaratory judgment, and that the complaint should be dismissed without prejudice, at the cost of appellee. It is so ordered.