Davison v. MacCabees , 217 Ala. 100 ( 1927 )

Suit by appellant against appellee, a fraternal corporation, to recover damages for breach of contract. Demurrer to the complaint having been sustained, plaintiff suffered a nonsuit, and prosecutes this appeal for a review of the ruling on the demurrer.

Plaintiff held with defendant two policies of insurance, a life policy, and the other a sick benefit policy. In the life policy it was stipulated that, if insured (plaintiff) should become totally disabled, he would be entitled, under the conditions therein set forth, to surrender his policy, and obtain one-half the amount thereof. The complaint shows that plaintiff became sick, and subsequently totally disabled to such extent as that he could have qualified under the conditions of the life policy for a surrender thereof, and received $1,500, which represented one-half the amount thereof; that, when plaintiff became sick, the defendant wrongfully failed and refused to pay him the sum of $70 per month due him for sick benefits, and that he was thereby rendered unable to keep up his life insurance policy, and therefore prevented from taking advantage of the clause in said policy to which reference has just been made.

The suit is for a breach of contract as to the payment of sick benefits under that particular policy, and the demurrer takes the point that the damages for recovery of which this action is brought were not such as may be reasonably supposed to have been within the contemplation of the parties at the time of its execution, and are not recoverable. The trial court evidently accepted this view in sustaining the demurrer, and we think correctly so.

The question is elaborately considered in Southern R. Co. v. Coleman, 153 Ala. 266, 44 So. 837, where the rule is stated in the following language:

"The broad general rule is that a party injured by a breach of contract or breach of duty is entitled to recover all his damages, including gains prevented as well as losses sustained, subject to two conditions: The damages must be such as may be fairly supposed to have entered into the contemplation of the parties when they made the contract, or when the duty was assumed or imposed — that is, the damages must be such as might be expected to follow its violation; and they must be certain, both in their nature and in respect to the cause from which they proceed."

The principle here recognized has found frequent application in our decisions. Samuels v. Scott, 212 Ala. 679, 103 So. 848; Vance v. Myers, 213 Ala. 660, 106 So. 142; Southern R. Co. v. Moody, 169 Ala. 292, 53 So. 1016.

Construing the complaint most strongly against the plaintiff, as the rule requires, the two policies were separate and distinct, and without reference of the one to the other. There is no averment indicating any contemplation of the parties that a breach of the one would result in a forfeiture or lapse of the other, and we think it clear the damages here sought to be recovered are not such as may be said to flow naturally and directly from the breach. They do not come within the rule of the above-cited authorities, and the trial court correctly so ruled.

We are mindful of the rule that, where unrecoverable damages are sought, the proper method for their exclusion is not by demurrer, but by motion to strike and objection to evidence, or appropriate instruction to the jury (Morgan v. Whatley,205 Ala. 170, 87 So. 846), and we intend no infringement upon that rule. We are of the opinion, however, this rule of procedure is without application in a case as here presented, where the only damages sought are such as cannot be held to have been in contemplation of the parties, and, therefore, unrecoverable, and where, indeed, the question is determinative of plaintiff's entire cause of action, and incapable of amendment without a departure from the facts stated. In such case the demurrer properly takes the point.

Counsel for appellant urges the further theory that the amount due plaintiff under the sick benefit policy, which defendant wrongfully failed and refused to pay, was sufficient to have kept up the life policy, and should be held to have been so applied. The argument rests upon the assumption that defendant had in its hands sufficient funds to pay the life policy premiums, and that the duty rested upon it so to apply these funds. Upon this latter question as to the duty of application without direction or contract to that effect, there is diversity of opinion. Mutual Fire Ins. Co. v. Miller Lodge,58 Md. 463; Wheeler v. Mut. Life Ins. Co., 82 N.Y. 543, 37 Am.Rep. 594; 32 C. J. 1308; Reliance Life Ins. Co. v. Hardy,144 Ark. 190, 222 S.W. 12; Union Cent. Life Ins. Co. v. Caldwell,68 Ark. 505, 58 S.W. 355. But we do not reach a consideration of this latter question. In the authorities cited by appellant there were funds in the hands of the insurance company admittedly belonging to the insured, and either by contract or custom the application to premium payments had been made. Citizens' Life Ins. Co. v. Boyle, 139 Ky. 1, 129 S.W. 303; Reliance Life Ins. Co. v. Hardy, supra; Union Cent. Life Ins. Co. v. Caldwell, supra. These authorities have been carefully read and considered in the light of argument of counsel for appellant, but they are readily distinguishable from the instant case. Here plaintiff at most has a disputed claim against defendant on the sick benefit policy. It cannot be said, in view of the contested issue thus presented, that defendant has funds of plaintiff's in his hands. He has a right of action only as to which he insists defendant wrongfully refuses to pay, but nothing more.

Counsel for appellant has expressed a desire that the meritorious questions presented be here determined, and we have discussed this latter insistence in response to such suggestion. As a matter of strict pleading, however, we entertain serious doubt that it is here presented. This insistence is in effect that the life policy premium was paid, and, if so, then the proper procedure would appear to be a suit upon that policy for a recovery of the amount claimed, and not a suit for a breach of the sick benefit policy. But, however that may be, we conclude plaintiff's complaint is insufficient to show a right of recovery, and that the demurrer was properly sustained.

Let the judgment be affirmed.

Affirmed.

ANDERSON, C. J., and SAYRE and BOULDIN, JJ., concur.