Fidelity Mutual Life Insurance v. Clark

Syllabus

<p>A man and his sister conspired to defraud an insurance company; the former having insured his life disappeared and the latter as’beneficiary filed proof of death, brought suit, and recovered' judgment after verdict by a jury; the company defended on ground .that insured was alive and claim was fraudulent.- The judgment was affirmed and the company paid the money into court. In order to have the suit prosecuted the beneficiary had made contingent fee contracts with attorneys which • - had boon filed 'and the money was distributed from' the' registry of the court to her and the various parties holding assignments of interests therein'. The insurance company, having afterwards found the insured was alive, sued in equity the beneficiary and also her counsel and their assignees to recover the money received by them respectively. No charge of fraud was made against anyone except the beneficiary, but notice of the fraud was charged against all by virtue of the company’s defense. The defendants claimed that under the Seventh Amendment the question of death of person insured could- not again be litigated. The bill was dismissed as-to all except the beneficiary.</p> <p>Held, as to the defendants other than the beneficiary, that as the action was prosecuted in good faith, whatever notice they may have had by virtue of the company’s defense was purged by the verdict, and although they had received their respective shares from the proceeds paid into court it was the same in law as though they had been paid in money directly by the judgment creditor and it could not be recovered. '</p> <p>Whether in view of the Seventh Amendment a Federal court sitting in equity may inquire into whether a judgment based on a verdict was obtained by fraud and, if so found, set the verdict aside, argued, but not decided.</p>