Opinion
No. 36192.
January 13, 1947.
1. REWARDS.
In action by insured against insurer to recover reward under insurer's newspaper advertisement that it would pay $1,000 to anyone who proved that insurer failed to pay a claim covered by its policy on receipt of acceptable proof, insured must allege and prove that he had a lawful claim against insurer that remained unsatisfied at time reward was offered.
2. REWARDS.
Insured, who had received full accord and satisfaction of his claim in controversy against insurer on a sick and accident policy, could not recover from insurer reward offered in newspaper advertisement to anyone who could prove that insurer had failed to pay a claim covered under a policy on receipt of acceptable proof, in absence of showing that insurer's original refusal to pay insured was unjust.
3. JUDGMENT.
A declaration which does not state a cause of action will not sustain a judgment of default.
4. REWARDS.
In action by insured against insurer to recover reward offered by insurer to anyone who could prove that insurer failed to pay a claim on a policy on receipt of acceptable proof. that insurer contested insured's claim under a sick and accident policy and then compromised and paid the claim, did not establish that insured's claim was valid, but merely admitted that there was a dispute and that an amount was paid to be rid of the controversy.
5. ACCORD AND SATISFACTION.
A sum tendered by a debtor on condition that it will be accepted in full settlement of claim constitutes an "accord and satisfaction" of the claim.
APPEAL from the circuit court of Jones county. HON. F. BURKITT COLLINS, J.
Watkins Eager, William E. Suddath and Mrs. Elizabeth Hulen, of Jackson, and Deavours Hilbun, of Laurel, for appellant.
Where appellant appeared by counsel within less than two hours of the time that a default judgment was rendered against it and filed a motion to set aside the judgment, supported by affidavit, showing reasonable diligence on the part of the appellant's attorneys, the motion to set aside the default judgment should be sustained.
Southern Express Co. v. Hunt, 54 Miss. 664; Southwestern Surety Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143; Planters' Lumber Co. v. Sibley, 130 Miss. 26, 93 So. 440.
The appellant, having filed a demurrer to appellee's declaration, was entitled to reasonable notice of any amendment made by appellee.
Boone v. Miller, 160 Miss. 287, 133 So. 121; Code of 1942, Sec. 1474, 1511; Griffith's Mississippi Chancery Practice, Ch. 397.
The judgment of default cannot be sustained where neither the declaration nor the record shows a cause of action or right to recover in favor of the appellee and against the appellant.
Stevens et al. v. Barbour et al., 193 Miss. 109, 8 So.2d 242; Odom v. Gulf S.I.R. Co., 101 Miss. 642, 57 So. 626; Penn Mutual Life Ins. Co. v. Keeton, 95 Miss. 708, 49 So. 736; Reid v. Gregory, 78 Miss. 247, 28 So. 835; Home Ins. Co. v. Newman, 147 Miss. 237, 111 So. 455; Palmetto Fire Ins. Co. v. Allen, 141 Miss. 681, 105 So. 482; Kohler v. Oliver, 114 Miss. 46, 74 So. 777; Hogue v. Armstrong, 159 Miss. 875, 132 So. 446; May Bros. v. Doggett, 155 Miss. 849, 124 So. 476; State Highway Department v. Duckworth, 178 Miss. 35, 172 So. 148; Metropolitan Life Ins. Co. v. Perrin, 184 Miss. 249, 183 So. 917; Board of Sup'rs of Itawamba County v. Candler, 62 Miss. 193; Code of 1942, Secs. 1469, 1470; 15 C.J.S. 737, 738, 739; 46 C.J.S. 509, Sec. 1351.
The case was not triable on its merits at the December 1945 term of the trial court.
Globe Rutgers Fire Ins. Co. v. Sayle, 107 Miss. 169, 65 So. 125; Continental Casualty Co. v. Gilmer, 146 Miss. 22, 111 So. 741; Universal Life Ins. Co. v. Catchings, 169 Miss. 26, 152 So. 817.
Leonard B. Melvin, of Laurel, for appellee.
A default judgment should be set aside where good cause is shown and where a trial of the case on the merits could be made possible at that term of the court, but in this case, in view of the facts and circumstances, and in view of the fact that the motion to set aside the judgment came at a time when it had been made impossible for the court to try this case on its merits at that term of court, and plaintiff would have lost his right to try it on its merits at that term, the defendant has no legal right to have it set aside.
Southwestern Surety Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143; McIntosh v. Munson Road Machinery Co., 167 Miss. 546, 145 So. 731; Strain v. Gayden, 197 Miss. 353, 20 So.2d 697; Code of 1942, Sec. 1519.
This Court has universally held that where there is no surprise to the opposing party, and amendment may be allowed during the trial.
Rea v. Grubb (Miss.), 39 So. 808; Merchants' Farmers' Bank v. Smith, 107 Miss. 105, 64 So. 970; Rodgers v. Kline, 56 Miss. 808; Code of 1942, Secs. 1474, 1511, 1512; Griffith's Mississippi Chancery Practice, Sec. 397.
The declaration shows a cause of action or right to recover.
The case was triable on its merits at the December 1945 term of the trial court.
Code of 1942, Secs. 1438, 1439.
Argued orally by William E. Suddath and Mrs. Elizabeth Hulen, for appellant, and by Leonard B. Melvin, for appellee.
For a number of years, appellant, a foreign corporation, has been engaged in the sick and accident insurance business in Mississippi. In 1931, appellee was the holder of one of its policies insuring him aganst such hazards. He sought to collect indemnity for alleged illness. Appellant denied liability for reasons not definitely disclosed in the record. Ultimately, appellee brought suit in the circuit court for the first district of Jones County.
This action was transferred to the United States District Court for the Southern District of Mississippi, Hattiesburg Division, where the final order entered in the litigation reads in part as follows: "This day this cause came on to be heard and it appearing unto the court that the matters and things in controversy have been fully satisfied, paid and compromised, and that said cause should be dismissed with prejudice. It is therefore ordered and adjudged that said cause be and the same is hereby dismissed with prejudice at the cost of the defendant, for which let execution issue."
In 1945, for advertisement purposes, appellant published in Jones County the following offer of reward: "$1,000.00. To anyone who can prove that Mutual Benefit has failed to pay a claim covered under the policy and which we will not pay upon receipt of proof acceptable under the terms of the policy — $1,000.00 reward!" It will be noted that this offer was conditioned upon failure to "pay a claim covered under the policy." In other words, a just claim for which appellant by its policy had bound itself to pay. Appellee made his own one-time claim and its former litigation the basis for demanding this reward. Denied, he brought suit in the same circuit court of Jones County, First District. With his declaration, he filed a copy of his declaration for illness benefits in the former action, as an exhibit, and also exhibited the final judgment of the United States District Court, supra. He did not, however, exhibit the pleas of the appellant insurance company. There is, therefore, not disclosed in this record what defense the insurance company interposed. Since the offer of reward was not merely for proof of refusal to pay a claim, but was patently for proof of refusal to pay a just claim covered under the policy, it was incumbent upon appellee both to allege and prove that he had a lawful claim that remained unsatisfied at the time the reward was offered.
Appellee's declaration for the reward made the same allegations of liability against appellant as he did in his former declaration for the insurance benefits, with the additional allegations seeking to support his claim for the reward. To this declaration at bar, with its aforesaid exhibits, appellant demurred on several grounds. In our judgment, the declaration is demurrable for more than one of them, but a discussion and decision as to only one will dispose of the case in view of the conclusion we have reached. The demurrer challenges the sufficiency of the declaration because it states no cause of action, and shows affirmatively "from the pleadings filed herein by the plaintiff that it has been adjudicated by a court with full jurisdiction over the parties hereto and the subject matter hereof that all of plaintiff's rights and claims under said policy of insurance have been fully satisfied, paid and compromised." The trial court sustained this demurrer, not on the above ground, but only "in so far as the demurrer applies to the time and place of the publication of the reward." Subsequently, judgment by default for the full amount of the reward was rendered by the trial court under unusual circumstances not necessary to discuss here, since its judgment must be reversed and judgment rendered herein for appellant. Here, failure of the trial court to rule on the entire demurrer is assigned as error, because its specific designation of one ground for sustaining the demurrer overruled all others, including the one we are discussing. The point was again made in the affidavit with the motion to vacate the default judgment, the overruling of which is assigned as error here.
Since the appellee, in the instant action for the reward, disclosed by the exhibit to his declaration that he had received full accord and satisfaction from appellant, in the satisfaction, payment and compromise of his suit for insurance benefits in the former litigation, the demurrer should have been sustained for that reason, as the declaration stated no cause of action with reference thereto. The amendment of his declaration by appellee, giving the date and place of publication of the reward offer, did not remedy the other fatal defect raised by the demurrer. We have repeatedly announced the rule that a declaration which does not state a cause of action will not sustain a judgment by default. Stevens et al. v. Barbour, et al., 193 Miss. 109, 8 So.2d 242; Odom v. Gulf Ship Island Railroad Co., 101 Miss. 642, 57 So. 626; Penn Mutual Life Insurance Co. v. Keeton, 95 Miss. 708, 49 So. 736; Reid v. Gregory, 78 Miss. 247, 28 So. 835.
The best that appellee can say for his former action is that he made a demand for a claim under an insurance policy issued by appellant, which was contested. Since no plea of appellant was filed by him as an exhibit to his declaration, evidencing an unjust refusal to pay a claim covered by the policy and he was satisfied and paid under a compromise settlement in a court of competent jurisdiction, he thereby demonstrated that he was not entitled to recover the reward for which he sued, under the very terms of its offer. The compromise of the case did not constitute an admission by appellant that appellee's then claim was valid "but merely admits that there is a dispute, and that an amount is paid to be rid of the controversy; . . ." 15 C.J.S., Compromise and Settlement, Sec. 22, p. 737. We have held that a sum tendered by a debtor on condition that it will be accepted in full settlement of claim, constitutes accord and satisfaction of claim. May Brothers v. Doggett, 155 Miss. 849, 124 So. 476.
There are other reasons why the declaration in the case at bar, and probably why the declaration in the former action, failed to state a cause of action. However, it is not necessary to discuss them here inasmuch as we are of the opinion that for the reasons, supra, the lower court was in error, in failing to sustain the demurrer of appellant on the grounds hereinabove set forth. Its judgment will therefore be reversed, and judgment rendered here for appllant.
Reversed and judgment here for appellant.
Sydney Smith, C.J., did not participate in this decision.