Court Opinion

ID: 6959569
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:43:13.485091+00
Date Added: 2024-06-11T16:08:23.427797
License: Public Domain

Mr. Justice Sheldon delivered the opinion of the Court: The declaration contains but one count—the count for money had and received. The theory of the suit is, that there was here a surrender of the policy, or what was its equivalent; that the insurance company violated its contract in not, thereupon, issuing a “ paid-up ” policy; that any violation of the terms of a special contract will authorize the other party to rescind it; that appellee has, accordingly, rightfully rescinded the contract, and is entitled to recover back all money paid under the rescinded contract. The mistake of the appellee is in regarding the premiums as having been paid for a paid-up policy, and that the entire consideration for the premiums was the issuing of a paid-up policy. Were this so, and the consideration had entirely failed, then the action for money had and received would well lie to recover money paid for a consideration which had failed. But the consideration for the premiums paid here, was the carrying of the life policy of appellee for five years. If, at any time during the five years, appellee had died, the company would have had to pay to his wife and children $2500. It was for this risk, which the company carried for five years, that the premiums were paid. The privilege of surrender of the original policy, and receiving a paid-up policy for the amount of premiums paid, might be a desirable one for the assured to possess, but it was a minor incident of the contract, and insignificant as respects consideration, probably forming no appreciable element in fixing the amount of the premiums which were paid. The evidence justifies the remark, as there is the uncontradicted testimony of a witness familiar with the business of life insurance, and the life tables on which it is based, and knowing the cost of carrying the life policy, that it was worth as much as all the money paid to carry the life policy of appellee for the five years. The risk, here, has been carried" for five years; the consideration for the premiums paid, received and enjoyed; it is past recall or restoration; the parties can not be put in the same situation they were in when the contract was made, and it is no such case where a contract can be rescinded by one party for the default of the other. Hunt v. Silk, 5 East, 448; 2 Chit. Cont. 1092-3. The count for money had and received, is not maintainable if a contract has been in part performed, and the plaintiff has derived some benefit, and by recovering a verdict the parties can not be placed in the exact situation in which they originally were when the contract was entered into. 1 Chit. Pl. 387. There is a special contract here, and the alleged breach of it is the gravamen of the action. In the case of Russell v. Gillmore, 54 Ill. 148, this court said: “It was never allowed to a plaintiff to recover in such action (for money had and received), in a case where there was a special contract, the breach of which was the gramamen of the action.” There was no warrant for the amount of damages found by the jury. The agreement of the company was, that after performance of the conditions precedent, it would issue a paid-up policy for the whole amount of even dollars of premiums received, subject to all indebtedness on the original policy. If the conditions precedent were performed, then the company broke its contract in not issuing the paid-up policy, and the damages recoverable for the breach of the contract would be the damage in not having such a paid-up policy—that is, the value of such a policy. It by no means follows that its value would be the whole amount of the premiums which had been paid to the company. They would be in no way a measure of the damages. The annual payments under the original policy, as therein provided, were $99. They were made, for the most part, partly in cash and partly by note. Thus, the five pay-, ments, in cash, amount to $309.43. There are four outstanding notes against appellant, of $49 each. Without stopping to consider what would be the precise sum for which the paid-up policy should issue if the plaintiff were entitled to one, allowing that it should be for the largest sum that can be claimed, the whole amount of the five annual payments, of $99 each, it would then be for $495, their aggregate amount, not payable until the death of. the assured, and to be subject, by the terms of the provision in the policy, to the deduction of the indebtedness on the four notes of $196, leaving the sum then to be received only $299; and yet the verdict is for $388.97. making the present value, in a sum payable presently, of $299, payable at the death of the assured, to be $388.97. The amount of the damages is utterly unwarranted, and palpably calculated on an erroneous basis. Upon the assumption, then, that, even had appellee performed the condition precedent of making a surrender of his policy, we find that this form of action for money had and received is not maintainable, and that the damages are manifestly excessive. The assessment of damages was in accordance with the instruction of the court below, that they should be to the amount of premiums paid, and interest thereon. The instruction was erroneous. We need, for the purpose of the present decision, to express no opinion as to whether there was here a surrender of the policy. The judgment is reversed and the cause remanded. Judgment reversed.