Miller v. Massachusetts Mutual Life Insurance

Bailey, J., delivered the opinion of the Court. By its ordinary life policy No. 584078, issued on September 15, 1922, Massachusetts Mutual Life Insurance Company, the appellee, insured the life of one Frank O. Miller for $5,000. The insured’s wife, Bertie P. Miller, the appellant, was named as beneficiary therein. However, the insured reserved the right to change the beneficiary and on November 10,1939, the policy was amended to read as follows: “If the policy shall mature ás a death claim the proceeds shall be payable in monthly .installments (240 stipulated) as provided in Option ‘C’, to my wife, Bertie P. Miller (born June 4, 1888). “Upon the death of the survivor of myself and my said wife, any funds then retained by the Company shall be paid in one sum to my brother, George W. Miller, and my sister, Florence G. Miller, equally or to the survivor of them, if living, otherwise to the executors or administrators of such last survivor.” The approval of this amendment by the Company was, on November 13, 1939, indorsed upon the policy and signed by J. L. Márchese, Assistant Secretary.

A subsequent amendment was made on August 24, 1942, approved by the Company and the policy indorsed on August 25, 1942. This amendment reads as follows: “If the policy shall mature as a death claim, the proceeds shall be payable in monthly installments of $100.00, as provided in Option ‘A’, to my wife, Bertie P. Miller if living as said installments respectively fall due, otherwise the proceeds, or any balance thereof, shall be paid in one sum to my brother, George W. Miller, and my sister, ²² Florence G. Miller, equally or to the survivor of them, if living, otherwise as provided in the optional methods of settlement.” The insured died on August 25, 1942, and the net proceeds of the policy, including the face amount and the 1942 dividend, is the sum of $5,026.10. It is conceded that the date of birth of Bertie P. Miller is stated incorrectly in the first amendment and that the correct date is June 4,1886. It is further conceded that under Option “C”, referred to in the first amendment, monthly payments in the amount of $25.08 would continue during the lifetime of Bertie P. Miller, with 240 monthly payments guaranteed, and in the event of the death of Bertie P. Miller prior to the completion of said 240 monthly payments, the commuted value of the remainder thereof would then be payable in one sum to the other beneficiaries designated in said amendment, but that under Option “A”, referred to in the second amendment, the monthly payments of $100 would continue until the proceeds of the policy were exhausted, that is to say, for approximately 53 months, or until the earlier death of the said Bertie P. Miller, in which event any balance then remaining would be payable in one sum to the other designated benficiaries.

The appellant has demanded that the Company pay to her the monthly installments of $100 as provided by the second amendment and Option “A” of the policy. The other beneficiaries, George W. Miller and Florence G. Miller, claim that the second amendment is invalid, void and of no effect and have demanded that the Company pay to the appellant only the monthly payments accrued and to accrue under the first amendment and Option “C” of the policy. Confronted by these conflicting claims and demands, the Company, on November 23, 1942, filed its bill of complaint in the Circuit Court for Baltimore City against Bertie P. Miller, George W. Miller, and Florence G. Miller. The record does not contain a copy of the bill, but it does appear that on the same day and without notice to the defendants, the court entered a preliminary or interlocu ²³ tory decree, providing among other things, that the plaintiff pay into court the sum of §201.78 and that the defendants interplead.

On December 18,1942, Bertie P. Miller appeared and answered. On April 5, 1943, leave was granted her to withdraw her answer and file a demurrer to the bill. The demurrer was filed on the following day. On May 19, 1943, the demurrer was sustained with leave to file an amended bill within 30 days.

The amended bill, which was filed on June 25, 1943, after setting forth substantially the facts with respect to the policy and its amendments and the conflicting claims and demands of the defendants which we have recited above, further alleges that the plaintiff “has no interest, partiality, or favor towards any of said Defendants, and claims no interest in the proceeds of said policy other than its desire faithfully to perform its duty with regard thereto under the terms of said policy, and any valid amendment of the contract embodied therein and while Plaintiff stands ever ready, willing and anxious to perform its said duty, and to satisfy the claim and demand of that Defendant or those Defendants who lawfully establish the right thereto, this Plaintiff, under the circumstances hereinbefore set forth is exposed to the possible hazard, vexation, and expense of several actions at law or equity, and is unable without danger to itself to ascertain which of the claimants, said defendants, is entitled to be satisfied in their said demands”. The Company, in said amended bill, then tenders itself ready and willing to pay into court either the sum of §272.96 under the first amendment or the sum of §1,103.13 under the second amendment, as the court might direct, and further tenders itself ready and willing to continue to make such further payments out of the policy proceeds to the clerk of the court, pending the determination of the cause, and thereafter until the same are thereby exhausted to such of the defendants and in such manner as the court, by its decree, might direct after adjudicating the respective claims and demands of the defendants. The prayers of the amended bill are that the defendants interplead, ²⁴ that the court determine the manner and amount in which monthly payments thereafter accruing should be paid by the plaintiff out of the proceeds of the policy, that the defendants be restrained from prosecuting any action, either at law or in equity, against the plaintiff for or in respect to the proceeds of the policy, and for general relief. Again, without awaiting answers from the defendants to the amended bill, the court on the same day passed a preliminary or interlocutory decree directing that the parties defendant interplead, that “the plaintiff pay into the Court the further sum of $800.00, said fund to be deposited in a National Bank, and that the plaintiff continue to pay into this Court each month the further sum of $100, pending the further order of this Court, and that the plaintiff redeposit or repay into the Court the fee and costs heretofore withdrawn or paid out”, that all further proceedings in this case be stayed as regards the plaintiff, that an injunction issue restraining the defendants from prosecuting any action against the plaintiff in respect of the proceeds of said policy, that in the interpleader pro-, ceedings George W. Miller and Florence G. Miller be the plaintiffs and Bertie P. Miller, the defendant, that the decree passed on November 23, 1942, be rescinded, and that the questions of court costs and counsel fees be reserved for the further determination of the court.

On the same day the plaintiff paid into court the sum of $901.35, which was deposited with the sum of $201.78, paid into court by it under the decree of November 23, 1942. Thereafter, on July 9, 1943, Bertie P. Miller demurred to the amended bill. By its order dated July 16, 1943, the court overruled the demurrer, with leave to the defendant to answer within 30 days. On August 5, 1943, she filed a lengthy answer to the amended bill in which she admits many of its allegations, but denies that the indorsement of November 13, 1939, was placed upon the policy as the corporate act of the plaintiff, and charges that the plaintiff has not maintained a position of impartiality in that it has wrongfully disclosed to the other ²⁵ defendants certain information which it received from her, that it has refused to recognize and abide by an agreement between the defendants whereby she was to be paid at the rate of 850 per month, in lieu of the payments provided for under either Option “A” or Option “C”, and that it should have paid into court the full sum of $5,026.10 due under the policy, with proper interest thereon.

There is a general denial of its right to maintain a bill for interpleader under the facts set out in its amended bill of complaint. On August 17, 1943, the other defendants filed their interpleading complaint setting out in full their contention that the second amendment is a forgery and of no force, effect or validity in law and praying that the same be declared void and of no effect and that payments be made to Bertie P. Miller only as provided in the first amendment. On August 31, 1943, Bertie P. Miller entered an appeal from the order of July 16, 1943, overruling her demurrer to the amended bill of complaint. Subsequently, on October 28, 1943, a hearing was had on the amended bill and the answer of Bertie P. Miller, testimony was taken before the chancellor and the chancellor entered what he termed a final decree of interpleader, which reads as follows: “This cause standing ready for hearing upon Amended Bill of Complaint, and Answer thereto of Bertie P. Miller, first defendant herein, testimony having been taken in open Court, and the parties by their counsel duly heard, the proceedings were by the Court read and considered, and it appearing to the Court that the second defendants herein have entered no appearance in these proceedings for the purpose of objecting to the granting of relief tó the plaintiff by way of interpleader, And it further appearing to the Court that pursuant to the decree of this Court dated the 25th day of June, 1943, the plaintiff has paid into this Court the sum of $800, and has repaid into this Court the fee and costs there ²⁶ tofore paid out, and is continuing to pay into this Court the sum of $100 each month, all as therein provided. “And it further appearing to this Court that the plaintiff holds the proceeds of the insurance policy mentioned in the Amended Bill of Complaint for the true owner or owners without having or claiming any right or interest therein, and that it is ready and willing to. pay said proceeds in such amounts, installments, in such manner and to whomsoever may have the right thereto. “It is thereupon this 28th day of October, 1943, by the Circuit Court of Baltimore City, Adjudged, Ordered, and Decreed that the defendant parties to the Amended Bill of Complaint interplead. “And it is further Ordered that the plaintiff continue to pay into this Court each month the further sum of $100 pending the further order of this Court. “And it is further Ordered that all further proceedings in this case be stayed as regards the plaintiff, pending the further order of this Court and that as between the defendants an inquiry be made as to their respective claims and demands with respect to the proceeds of said policy, and the manner of payment thereof, and that an injunction be issued restraining the defendants, their counsel, solicitors, agents, and attorneys from prosecuting any action against the plaintiff in respect of the proceeds of said policy in the Amended Bill of Complaint mentioned. “And it is further Ordered that in the interpleader proceedings herein George W. Miller and Florence G. Miller shall be the plaintiffs and Bertie P. Miller shall be the defendant. “And it is further Ordered that the plaintiff be at liberty to retain and deduct from the proceeds of said policy the sum of $77.30 for its costs, together with the sum of $150 as a fee to its solicitors for their services in this case.” It is from this decree that the second appeal was taken on November 3, 1943.

The appellee has filed motions to dismiss both appéals. ²⁷ We will consider first the motion to dismiss the first appeal. It has been repeatedly held by this court that an order either sustaining or overruling a demurrer to an entire bill of complaint is not an interlocutory order, but an order in the nature of a final decree, from which an appeal lies under Section 30 of Article 5, Code of 1939. Young v. Cockman, 182 Md. 246 , 34 A. 2d 428 ; Chappell v. Funk, 57 Md. 465 ; Hyattsville v. Smith, 105 Md. 318 , 66 A. 44 ; Darcey v. Bayne, 105 Md. 365 , 66 A. 434 ; Peoples v. Ault, 117 Md. 631 , 84 A. 60 ; Hendrickson v. Standard Oil Co., 126 Md. 577 , 95 A. 153 ; Harlan v. Lee, 177 Md. 437 , 9 A. 2d 839 . But in this case the appellant, after the passage of the order of July 16, 1943, overruling her demurrer to the amended bill and prior to the entering of an appeal from said order, filed her full and complete answer to the amended bill.

It was held by this court in Somerset Rapid Transit Co. v. Mayor and Council of Crisfield, 126 Md. 368 , 94 A. 911 , that the effect of the answer upon the demurrer was to overrule it. In that decision the court refers to the case of County Com’rs of Frederick County v. City of Frederick, 88 Md. 654 , 42 A. 218, 221 , where it is said: “But we are not aware of any practice in this state which will permit him to plead or demur to the whole bill, and also at the same time to file an answer to it. By his plea he prays judgment of the court as to whether he shall be required to make further answer to the bill; and the demurrer, while admitting the facts properly stated in the bill, interposes an objection to the plaintiff’s further proceeding or requiring the defendant to answer. Hence, if he answers to anything as to which he has pleaded, he thereby overrules his plea, and the same principle is equally applicable to demurring and answering and to demurring and pleading to the whole bill, or to the same part of the bill.

Chase’s Case, 1 Bland 217 ; Miller Eq. Proc., Sec. 134; 6 Ency. of Pl. and Pr., 414. The result is that the plea and demurrer filed in this case were overruled by the filing of the answer, and must be treated as out of the case.” See ²⁸ also Morton v. Harrison, 111 Md. 536 , 75 A. 337 . The portion of the above quotation which refers to pleas is now inapplicable as pleas in equity were abolished by the adoption in 1919 of General Equity Rule No. 18 (Code 1939, Art. 16, Sec. 179).

Scarborough v. Scarborough, 170 Md. 222 , 183 A. 558 ; Moodhe v. Schanker, 176 Md. 259 , 4 A. 2d 453 . Applying the rule laid down in the above decisions to the present case we must conclude that the demurrer is out of the case and that the action of the appellant in appealing from the order overruling the demurrer must be regarded as a nugatory act. It follows, therefore, that the first appeal must be dismissed. In reaching this conclusion we are not unmindful of General Equity Rule No. 20 (Code 1939, Art. 16, Sec. 185) which provided that: “The defendant shall be entitled in all cases by answer to insist upon all matters of defense in law or Equity, to the merits of the bill of which he may be entitled to avail himself by demurrer.” But this provision, in almost the identical words, appeared as General Equity Rule No. 23 in the Code of 1888, Art. 16, Sec. 142, was continued in subsequent Codes and was in effect at the time of the decisions, in County Com’rs Frederick County v. City of Frederick, supra, Morton v. Harrison, supra, and Somerset Rapid Transit Co. v. Mayor and Council of Crisfield, supra.

And it was not availed of by the defendant in this case. Its effect, as stated by the court in Hill v. Pinder, 150 Md. 397 , at page 406, 133 A. 134 , at page 137, “is to postpone any benefit to be derived by this course until .at. the hearing of the cause.” The decision of the court in Harlan v. Gleason, 180 Md. 24 , 22 A. 2d 579 , is not inconsistent with our ruling in this case, as the court was there considering a combined demurrer and answer filed under the authority of General Equity Rule No. 20. The motion to dismiss the second appeal is based on the contention that the decree of interpleader, entered on October 28, 1943, after the taking of testimony and full hearing before the chancellor- on the right of the plaintiff ²⁹ to maintain its bill, is not a final decree but is only an interlocutory decree, and that no appeal lies therefrom. In support of this contention we are referred to Miller, Equity Procedure, page 827, par. 724, where it is stated: “A decree passed upon the filing of a bill of interpleader, ordering the plaintiff to pay money into court, and requiring the defendants to interplead and answer is interlocutory, settling the rights of no party, and is at all times prior to a final decree subject to revision and alteration, being merely auxiliary to further proceedings, and does not require a bill of review to vacate, amend or rescind the same”.

The author cites as authority for his text the cases of Barth v. Rosenfeld, 36 Md. 604 , and Owings v. Rhodes, 65 Md. 408, 9 A. 903 . In the case of Barth v. Rosenfeld, supra, the decree was entered simultaneously with the filing of the bill of complaint, without notice to the defendants. It ordered the plaintiff to pay the money into court, required the defendants to interplead and answer, setting forth their respective claims to the fund, and enjoined further proceedings at law, until further order. It was of the same nature as the two preliminary decrees entered in the instant case, one on November 23, 1942, simultaneously with the filing of the original bill, and the other on June 25, 1943, simultaneously with the filing of the amended bill.

Thereafter one of the defendants moved the court to dissolve the injunction and to rescind the decree, so far as the same required the moving defendant to interplead, as premature and inadvertent. This motion was granted. On appeal it was contended that the decree could be vacated only through a bill of review filed within nine months from the date of its passage. In answering this contention the Court says, 36 Md. at page 616 : “But the decree in this case was clearly interlocutory, settled the rights of no party; on the contrary, called on the parties to interplead, and was evidently passed prematurely and improvidently.

The decree was at all times prior to a final decree, subject to revision and alteration, being merely ancillary to further proceedings, and it is ³⁰ apparent, its being rescinded, to be renewed again after the answers were filed, was intended to correct the record; by amending which, no party was prejudiced, and from which, of . course, no one could appeal.” In the case of Owings v. Rhodes, supra, we have the following situation: One Plummer, by his will, gave to his wife, .Josephine Plummer, the income from §4,000 during her life, and after her death, the principal was to be divided among certain charitable institutions named in the will; there were several legacies to other parties, and then all the residue of the estate, real and personal, was given to the wife; one Lindsay was named executor; the widow of the testator, being indebted to one Frank Welsh in the amount of §700, executed a mortgage of all her interest in the estate, and Welsh assigned this mortgage to one Rhodes. The validity of this mortgage being subsequently disputed and there being other claims against the widow, the executor filed his bill of complaint, alleging that the Orphans’ Court had decided that it had no jurisdiction to determine the matters in controversy and asking that the parties be decreed to interplead, so that their respective rights might he heard and determined. The proper pleadings were then filed in regular procedure, and by its decree the court appointed one Owings as trustee to