The opinion of the court was delivered by: Wham, Chief Judge.
This case arises under the National Service Life Insurance Act
of 1940, as amended 38 U.S.C.A. § 801 et seq., and the action was
instituted by plaintiff, Thomas E. Sly, as beneficiary of a
contract of insurance whereby defendant, United States of
America, in consideration of the payment of certain premiums
insured the life of the plaintiff's son, Thomas Joseph Sly, in
the amount of $10,000. The contract of insurance was entered into
on May 12, 1943 and said Thomas Joseph Sly died on May 24, 1950.
Plaintiff's claim for the proceeds of the contract was denied by
the defendant on the ground that the said insurance contract
lapsed for nonpayment of the premium due on October 12, 1948.
The case came on for trial before a jury and at the close of
all the evidence, for reasons which will hereinafter appear, the
defendant's motion for a directed verdict was sustained by the
court and judgment was entered in favor of the defendant.
The case is presently before the court on plaintiff's motion to
set aside verdict and judgment for defendant and to enter
judgment in favor of plaintiff in accordance with plaintiff's
motion for a directed verdict, and an alternative motion for a
new trial. Plaintiff contends that the court erred in failing to
submit the case to the jury upon the fact issue as to whether the
failure of the insured, Thomas Joseph Sly, to file application
for waiver of premiums was due to circumstances beyond his
control, namely, ignorance of the fact that he was totally and
At the time the case proceeded to trial two issues were in
dispute: (1) Did Thomas Joseph Sly know, during the year
immediately following October 12, 1948, that he was totally and
permanently disabled; and (2) if Thomas Joseph Sly did not know
that he was totally and permanently disabled during the said
time, did such lack of knowledge constitute a circumstance beyond
his control within the meaning of the statute? During the course
of the trial, however, another issue arose out of the facts shown
by the testimony of plaintiff and his witnesses which cannot be
In the presentation of the plaintiff's case Dr. Francis Bihss,
a radiologist and the treating physician of the deceased,
testified that before October 12, 1948 he had diagnosed the
deceased's condition as spleenic leukemia; that he advised the
plaintiff of insured's condition, that the disease was incurable
and that he was totally and permanently disabled; that he agreed
with plaintiff beneficiary to keep such information from the
insured; that in his opinion it was better from a medical
standpoint for the insured to be kept in ignorance of his true
condition. The plaintiff, Thomas E. Sly, was also sworn as a
witness, and testified that he was the father of the deceased,
Thomas Joseph Sly; that he knew that he was named as a
beneficiary in the policy; that he was engaged in business as an
insurance broker and that the deceased worked with him a portion
of the time; that during the period of one year, following
October 12, 1948, he knew that his son was suffering from an
incurable disease known as spleenic leukemia and was totally and
permanently disabled; that during this time he and Dr. Francis
Bihss agreed, for the good of the insured, as he believed, to
keep this information from the insured and that he did keep such
information from him.
Should the beneficiary in the policy here under consideration
be permitted to take advantage of his own deliberate acts and
omissions which prevented the insured from complying with the
requirements of the policy? The law, on principle, seems not to
favor a recovery under such circumstances. In the case of R.H.
Stearns Co. of Boston, Mass. v. United States, 291 U.S. 54, at
page 61, 54 S.Ct. 325, at page 328, 78 L.Ed. 647, the Supreme
Court of the United States, speaking through Mr. Justice Cardozo,
"The applicable principle is fundamental and
unquestioned. `He who prevents a thing from being
done may not avail himself of the non-performance
which he has himself occasioned, for the law says to
him, in effect: "This is your own act, and therefore
you are not damnified."' Dolan v. Rodgers, 149 N.Y.
489, 491, 44 N.E. 167, and Imperator Realty Co. v.
Tull, 228 N.Y. 447, 457, 127 N.E. 263; quoting West
v. Blake-way, 2 Mann. & G. 729, 751 [133 Eng.
Reprint, 940, 949]. Sometimes the resulting
disability has been characterized as an estoppel,
sometimes as a waiver. The label counts for little.
Enough for present purposes that the disability has
its roots in a principle more nearly ultimate than
either waiver or estoppel, the principle that no one
shall be permitted to found any claim upon his own
inequity or take advantage of his own wrong.
Imperator Realty Co. v. Tull [228 N.Y. 447,
127 N.E. 263], supra. A suit may not be built on an omission
induced by him who sues. Swain v. Sea-mens, 9 Wall.
254, 274, 19 L.Ed. 554 ; United States v. Peck,
102 U.S. 64, 26 L.Ed. 46; Thomson v. Poor, 147 N.Y.
402, 42 N.E. 13; New Zealand Shipping Co. v. Societe
des Ateliers (1919) A.C. 1, 6 [ — H.L.]; 2
Williston, Contr. §§ 689, 692."
Plaintiff has devoted much argument to the end that defendant
may not rely upon the defense of estoppel for the reason that all
of the elements required for an estoppel are not present. Without
stopping to classify the obstacle to plaintiff's right to recover
it would seem, as Justice Cardozo said in R.H. Stearns Co. of
Boston, Mass. v. United States, supra, "the label counts for
little." The plaintiff put himself in position that the law
should not and does not permit him to succeed.
The undisputed evidence shows that plaintiff, with knowledge
that the insured was disabled, kept the knowledge from the
insured so he could not comply with the requirement that he apply
for waiver of premiums but plaintiff, having such knowledge,
failed to do anything to avoid the consequences of his own act.
In effect, he, the beneficiary, stepped into the shoes of the
insured and failed to protect the policy in any way. Thereby, he
forfeited his rights as beneficiary.
Under Rule 8(c) of the Federal Rules of Civil Procedure, Title
28 U.S.C.A., in a responsive pleading a party shall plead
affirmatively any matter which constitutes an avoidance or an
affirmative defense. The purpose of this rule is to prevent
surprise, Carr v. National Discount Corporation, 6 Cir.,
172 F.2d 899; Barron and Holtzoff, Federal Practice and Procedure, Vol. 1,
sec. 279. The primary purpose of the rules is to permit the
accomplishment of substantial justice by simplifying the
procedure. The general policy in the interpretation of these
rules is to disregard the technicalities and to determine the
rights of litigants on the merits and to that end the rules are
liberally construed. Mitchell v. White Consolidated, 7 Cir.,
177 F.2d 500; Holley Coal Co. v. Globe Indemnity Co., 4 Cir.,
186 F.2d 291.
The evidence of the fact that plaintiff was responsible for the
insured's lack of knowledge of his permanent and total disability
was produced by the plaintiff in his own testimony and in the
testimony of his witnesses. Under these circumstances plaintiff
cannot maintain that he was surprised as to the facts presented.
Dixie-Vortex Co. v. Paper Container Mfg. Co., 7 Cir.,
130 F.2d 569, at pages 576, 577. To deny to the defendant the right to
raise the question on the motion for a directed verdict in this
case would defeat the avowed purpose for which the Rules of Civil
Procedure were promulgated. Furthermore, were it essential under
the rules, any discrepancy ...