BRIX v. PEOPLE MUT LIFE INS CO (1934)

This action was brought to recover on an accident insurance policy issued by the defendant in favor of the plaintiff. The policy provided that, in case the insured was accidentally injured and such injury ‘shall wholly and continuously disable the insured from performing any and every kind of duty pertaining to his occupation for one day or more, so long as the insured lives and suffers total loss of time, the Company will pay a monthly indemnity at the rate of One Hundred ($100) Dollars.’ The complaint is in two counts. The first count contains proper and sufficient allegations showing the execution and delivery of the policy of insurance; that, while said policy was in full force, the plaintiff suffered permanent accidental injuries of the character covered by the policy, specifying the nature of such injuries; and that said injuries had wholly and continuously disabled the insured from performing any and every kind of duty pertaining to his occupation. This count of the complaint continues and alleges the giving of notice of such injury to the insurer and the presentation by the insured to the insurer of proofs of loss as provided by said policy; that the insurer had paid four monthly payments of $100 each in compliance with the terms of said policy, but had failed and refused to pay any monthly indemnities for any month subsequent to the month of January, 1930, and that since said date no part of said monthly indemnities of $100 each had been paid. The second count of the complaint in paragraph I thereof by reference makes the allegations contained in the first count a part of the second count and contains one additional paragraph designated as paragraph II, which purports to state a cause of action for declaratory relief under section 1060 of the Code of Civil Procedure. To the complaint and to each count thereof the defendant filed a general and special demurrer. It also demurred to the first count on the ground that the court had no jurisdiction of the subject-matter thereof. The demurrers were overruled, and the defendant answered. The trial resulted in a judgment in favor of the plaintiff in the sum of $1,300 and interest. The court also further adjudged: ‘That plaintiff have and recover from the defendant the sum of one hundred ($100) dollars per month commencing with the month of March, 1931 (the trial was had on March 23rd, 1931) during the rest and remainder of plaintiff's natural life.’ From the judgment, the defendant has perfected the present appeal.

The first contention of appellant is that the court erred in overruling its demurrer to the first cause of action on the ground that the trial court had no jurisdiction of the cause of action stated in said first count. This contention must be sustained. The allegations of the complaint, the substance of which we have hereinbefore set forth in some detail, simply state a cause of action on said policy of insurance to recover the sum of $400. The jurisdiction of such an action was exclusively in the municipal court of the city and county of San Francisco. There is no allegation in this count making any of the statements in the second count a part of the first count by reference of otherwise. If the second count contained any statement which might aid or help out the allegations of the first count, it could only be made a part of the first count by reference or by restatement. The rule is well established that, where a complaint consists of two or more counts, each count must state a cause of action in itself, and any defect therein cannot be suplied from statements in other counts unless such statements are expressly referred to and made a part of it. Hopkins v. Contra Costa County, 106 Cal. 566, 570, 39 P. 933.

The second count of the complaint consists of two paragraphs. Paragraph I refers to the allegations of the first count; thereby making the statements contained therein a part of the second count. Paragraph II contains allegations from which it might possibly be inferred that plaintiff desired some form of declaratory relief under section 1060, Code of Civil Procedure. It may be seriously questioned whether the second count of plaintiff's complaint is sufficient for that purpose. However, the plaintiff contends that, if his complaint in the respect just noted was insufficient in its inception, the defendant by its answer, and particularly in that part of his answer setting up a special defense, has cured such defect by pleading the matter omitted from the complaint. For the purpose of this action, we will assume that the plaintiff is correct in this contention, and that under his pleadings, as aided by the allegations of the answer, he might be, if otherwise entitled thereto, awarded declaratory relief. In its special defense, defendant alleges that, under the terms of said policy of insurance, said policy did not cover disability while the plaintiff was not continuously under the professional care of a licensed physician, and that plaintiff had not during the months mentioned in the complaint been under such care. In determining the merits of this defense, it would be necessary for the court to construe the terms of the policy of insurance.

We have held that the superior court had no jurisdiction of the cause of action set forth in the first count of the complaint. The only difference between the allegations of the first count and those of the second count is that the latter count contains allegations relating to declaratory relief, which allegations we are assuming for the purpose of this action constitute a sufficient statement for that purpose. Does this additional allegation in the second count relating to declaratory relief take the case out of the jurisdiction of the municipal court and bring it within the jurisdiction of the superior court? The superior court has exclusive jurisdiction of all actions for declaratory relief. Code Civ. Proc. § 1060. In such an action, the plaintiff may ask for a declaration of his rights either alone or with other relief. It is competent, therefore, in all actions for declaratory relief, for the plaintiff to ask for a declaration of his rights and also for any affirmative or consequential relief to which he is entitled under the facts alleged. Has the plaintiff in his second count made out a proper case for declaratory relief? By an examination of the second count as made up by reference to the allegations of the first count, it will be seen that plaintiff seeks to recover from the defendant the four monthly payments of $100 each which had at the commencement of said action already accrued and which were then due plaintiff by the terms of said policy of insurance. It will thus be seen that the cause of action set forth in said second count had already accrued at the commencement of said action, and said action was primarily, and we think exclusively, for consequential relief. The court, in order to determine whether plaintiff was entitled to consequential relief, necessarily must have declared the rights of the plaintiff under said policy of insurance. Having done so, and having determined the question of consequential relief, the entire controversy embodied in the action was at an end. There was no necessity and no occasion for any further order declaring the rights of the plaintiff under said policy of insurance as that question had already been disposed of by the court. The case was not therefore one for a declaratory judgment. Aetna Life Ins. Co. v. Bellos, 158 Tenn. 554, 13 S. W. (2d) 795, 14 S. W. 2D) 961, 68 A. L. R. 119, note. See, also, the case of Standard Brands v. Bryce (Cal. Sup.) 37 P.(2d) 446, this day decided, and the authorities therein cited. The cause of action set forth in plaintiff's second count of the complaint can be regarded in no other light than simply an action to recover the several amounts due on the policy of insurance sued on, and, as the aggregate of these amounts was less than $2,000, the exclusive jurisdiction of said action was in the municipal court of the city and county of San Francisco.

Plaintiff makes the further contention, however, that he was entitled under the second count of his complaint not only to a judgment for the amount which had accrued under the terms of said policy, but in some manner, by reason of his allegations relating to declaratory relief, that he was also entitled to a continuing judgment for the sum of $100 per month during the rest and remainder of his natural life. This was evidently the view of the trial court as it rendered a judgment in accordance with this last contention of the plaintiff. Plaintiff maintains that this judgment was proper, and, if so, that the action was of such a nature as to lie within the jurisdiction of the superior court. That judgments for future payments under installment contracts, even without allegations for declaratory relief, have been upheld in certain jurisdictions, is apparent from a reading of the reported decisions of certain states, and particularly those from the state of Kentucky. Equitable Life Assur. Society v. Branham, 250 Ky. 472, 63 S. W. (2d) 498; Prudential Ins. Co. v. Hampton, 252 Ky. 145, 65 S. W. (2d) 980. The first of these two decisions was rendered without the citation of any supporting authority, but upon precedents afforded in cases of alimony and compensation under workmen compensation acts. The second of these cases was decided upon the sole authority of the first. We are not inclined to accept these decisions as decisive of the question involved herein. It seems that a clear distinction may be made between an action upon an insurance policy, or other contract payable in installments, and a claim for alimony or for compensation under the workmen compensation acts. The former are strictly actions on the contract, while the latter are predicated upon statutory enactments expressly empowering the court in one instance and the Industrial Accident Commission in the other instance to adjudicate future payments. Plaintiff also relies upon the case of Fleming v. Peterson, 167 Ill. 465, 47 N. E. 755, which at first blush would seem to support the trial court in the entry of the judgment herein. However, a closer study of that case shows that it was a suit in equity brought to enforce specific performance of a contract entered into by the parties therein. The plaintiff in said action had secured a divorce from the defendant and in the judgment in said action the defendant was required to pay her the sum of $125 per month. Subsequently the parties to said suit substituted for said judgment a contract whereby the defendant agreed to pay plaintiff the sum of $125 per month, payable quarterly, and plaintiff satisfied the judgment for alimony. The case was further involved by certain other provisions of said contract. The defendant made payments under the contract up to a definite date, and thereafter refused to comply further with its terms. Plaintiff then brought a suit in equity to enforce specific performance. which resulted in a decree of the court in her favor. This decree was affirmed on appeal. It is quite evident that that proceeding is so different from the instant case as to render it but slight, if any, authority supporting the judgment now under review. It is not necessary for us to distinguish the other cases cited by plaintiff. They are either, in our opinion, decided upon an erroneous principle of law, or they are based upon statements of fact so different from those involved in the present action as to render them of slight, if any, aid in the decision of any question now before us. This statement is applicable to two California cases cited by plaintiff: Newman v. Burwell, 216 Cal. 608, 15 P. (2d) 511 and In re Estate of Caldwell, 129 Cal. App. 613, 19 P. (2 d) 9. The first of these actions was brought by the divorced wife of a decedent against the executor of the will of said decedent to establish a claim against said estate and to have impounded funds of the estate sufficient to pay and discharge said claim. The claim was based upon a decree of divorce whereby the wife was awarded the custody of the minor child and the husband was directed to pay to the wife $50 per month until the further order of the court. The claim was for the maximum amount necessary to pay and discharge the monthly installment accruing since the decedent's death and which would thereafter accrue until such time as the child should reach her majority. A demurrer to the complaint setting forth the foregoing facts was sustained by the trial court, but this court reversed the judgment. No useful purpose is to be gained by a lengthy consideration of the differences between the facts in that case and those in the present action. We think it is apparent that the two cases differ so materially that the cited case is in no way parallel with the instant action and cannot be accepted as an authority in support of the judgment in the present action. The facts in the case of In re Estate of Caldwell, supra, were in all material respects like those in the case of Newman v. Burwell, supra. That case was decided on the authority of Newman v. Burwell, supra, upon the only point raised on appeal, and that was that the claim for the support of the minor child of the deceased did not abate with his death. We reiterate our former statement that these cases cited by plaintiff are not of material aid in the solution of the problem now before us.

Nor do we think that plaintiff's claim that he is entitled to a continuing judgment for unaccrued installments during the balance of his life is supported by section 3283 of the Civil Code, which provides that: ‘Damages may be awarded, in a judicial proceeding, for detriment resulting after the commencement thereof, or certain to result in the future.’ This section, in our opinion, simply refers to damages that may accrue in the future as the proximate result of the tort or breach of contract upon which the action is based. In the present action the breach of the contract was the failure of the defendant to pay the accrued installments. This default in the payment of these accrued installments did not work a breach of the entire contract, ‘the contract still subsists as to future benefits, and the default only affects the rights of the parties as to the benefit accrued. It is obvious that it does not work a breach as to the future benefits, since, as to such, the liability of the defendant has not become fixed, but remains contingent upon the condition of the plaintiff being such as to entitle him to demand them.’ Robinson v. Exempt Fire Co., 103 Cal. 1, 3, 36 P. 955, 24 L. R. A. 715, 42 Am. St. Rep. 93.

The authority most nearly in point to which our attention has been directed is the case of Green v. Inter-Ocean Casualty Co. decided by the Supreme Court of North Carolina and reported in 203 N. C. 767, 167 S. E. 38, 42. That was an action brought to recover installments which had already accrued on an insurance policy. Plaintiff claimed permanent disability and sued for unpaid installments and for declaratory relief. The jury found plaintiff to be permanently disabled, and the trial court granted judgment for the accrued installments and in addition for monthly indemnity (as provided in the policy) so long as the plaintiff should live. The Supreme Court modified the judgment by striking out the last provision of the judgment relating to unaccrued indemnity payments. In doing so the court used the following pertinent language: ‘The plaintiff mistakes the purpose of the Declaratory Judgment Act * * * in assuming that a judgment, in an ordinary controversy like the present one, comes within the provisions of said act. It is quite obvious from the complaint that this is an action to recover under an insurance policy, that the alleged cause of action had already accrued.’

The books are filled with cases in which actions have been brought to recover upon insurance policies similar to the one here involved, in which the insured has attempted to recover judgment, not only for accrued payments, but has also sought an adjudication as to installments not yet due. While the decisions upon the right of the plaintiff in such character of actions to recover for installments which have not yet accrued are not entirely uniform, the great weight of authority is to the effect that, in such actions recovery cannot be had for any installments falling due in the future. We cite only a few of such cases: Robinson v. Exempt Fire Co., 103 Cal. 1, 36 P. 955, 24 L. R. A. 715, 42 Am. St. Rep. 93; Atkinson v. Railroad Employees' Mutual Relief Society, 160 Tenn. 158, 22 S. W. (2d) 631; New York Life Insurance Co. v. English, 96 Tex. 268, 72 S. W. 58; Bonslett v. New York Life Ins. Co. (Mo. Sup.) 190 S. W. 870; Commercial Cas. Ins. Co. v. Campfield, 243 Ill. App. 453; Metropolitan Life Insurance Co. v. Day, 145 Ga. 425, 89 S. E. 576; Mid-Continent Life Ins. Co. v. Christian, 164 Okl. 161, 23 P. (2d) 672; Metropolitan Life Ins. Co. v. Lambert, 157 Miss. 759, 128 So. 750; State Life Ins. Co. v. Atkins (Tex. Civ. App.) 9 S. W. (2D) 290; Green v. Inter-Ocean Casualty Co., supra, 203 N. C. 767, 167 S. E. 38; Garbush v. Order of United Commercial Travelers, 178 Minn. 535, 228 N. W. 148; Howard v. Fenefit Ass'n of Railway Employees, 239 Ky. 465, 39 S. W. (2d) 657, 81 A. L. R. 375; Washington County v. Williams, 111 F. 801 (C. C. A. 8th Cir.). In Atkinson v. Railroad Employees Mutual Relief Society, supra, 160 Tenn. 158, 22 S. W. (2d) 631, 634, the court declared the law as follows: ‘While the benefit certificate issued to complainant constitutes an entire contract, the obligation thereby cast upon the society is severable, with a right of action accruing to the holder for each benefit installment payable and in default. (Citing authorities.) So it is generally held that, in an action at law for breach of a contract of insurance, payable in weekly or periodic installments, only those installments in default at the time suit was brought may be recovered.’ (Citing authorities.)

In Mid-Continent Life Ins. Co. v. Christian, supra, 164 Okl. 161, 23 P. (2d) 672, 675, the court stated the rule in the following language: ‘Under the authorities just cited, plaintiff would be entitled to recover in his cause of action for all benefits that had accrued under the insurance contract at the time of filing his suit. And could amend his petition to include such installments due up to the date of the amendment. But plaintiff could not recover for installments that were not due. The court could not determine how long said installments would continue to become due, because said matter is dependent upon the conditions of health of plaintiff and the date of his death.’

Our own court in construing a by-law of a fraternal organization providing for weekly benefits to any member who from sickness or accident became unable to earn a livelihood stated the applicable rule as follows: ‘The right of plaintiff to this payment for any one week accrues at the end of that week, and he is entitled to sue immediately upon default in its payment. Such default, however, does not breach the entire contract; the contract still subsists as to future benefits, and the default only affects the rights of the parties as to the benefit accrued. It is obvious that it does not work a breach as to the future benefits, since, as to such, the liability of the defendant has not become fixed, but remains contingent upon the condition of the plaintiff being such as to entitle him to demand them. * * * But the breach being separable, as we have seen, and not entire, plaintiff is only entitled to recover those benefits accrued at the commencement of the action.’ Robinson v. Exempt Fire Co., supra, 103 Cal. 1, 3, 4, 36 P. 955, 24 L. R. A. 715, 42 Am. St. Rep. 93.

Practically the same question has been before the courts of the state in cases involving leases where the rent was made payable in periodical installments, such as monthly or quarterly. It has invariably been held that the breach or repudiation of the lease by the lessee does not operate at once to mature all the rent reserved in the lease and to enable the lessor to recover not only the installments already accrued but those to accrue in the future. Bradbury v. Higginson, 162 Cal. 602, 604, 123 P. 797; Oliver v. Loydon, 163 Cal. 124, 126, 124 P. 731; Jacoby v. Peck, 23 Cal. App. 363, 138 P. 104. The same ruling was made where recovery was sought on a promissory note payable in installments. Crossmore v. Page, 73 Cal. 213, 14 P. 787, 2 Am. St. Rep. 789.

We are satisfied that the foregoing authorities state the correct principle of law which should govern the decision of the instant case. They hold most convincingly that in the action here pending the plaintiff is entitled to recover on said policy of insurance only accrued indemnity installments, and that this right of plaintiff may not be extended to recover installments which have not accrued by resort to the declaratory relief statute of this state. The pending action then, as stated in the foregoing authorities, is simply one upon an installment policy of insurance for the recovery of those installments which had accrued at the date of the commencement of said action. It was not such an action as the superior court in which it was brought had jurisdiction. It was the duty of the court, therefore, instead of proceeding to the trial of said action, to transfer it to the proper municipal court. Nothing which we have said herein should be taken as holding that, in case of a transfer of said action and a retrial thereof in the municipal court, the plaintiff may not, after proper amendment to that end, recover all installments which have fallen due on said policy of insurance since the commencement of said action, provided that his total demand does not exceed the jurisdictional limit of the municipal court.

The judgment is reversed, with directions to the trial court to transfer said cause to the proper municipal court.

CURTIS, Justice.

We concur: WASTE, C. J.; SHENK, J.; SEAWELL, J.; PRESTON, J.