McDonald v. Mutual Life Ins. Co. of New York, 7950.

• Citation: 108 F.2d 32
• Decision Date: 05 December 1939
• Docket Number: No. 7950.,7950.
• Parties: McDONALD v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

108 F.2d 32 (1939)

McDONALD v. MUTUAL LIFE INS. CO. OF NEW YORK.

No. 7950.

Circuit Court of Appeals, Sixth Circuit.

December 5, 1939.

John A. Osoinach and Charles C. Brown, both of Memphis, Tenn., for appellant.

G. T. Fitzhugh, of Memphis, Tenn. (G. T. Fitzhugh and Fitzhugh, Murrah & Fitzhugh, all of Memphis, Tenn., and Louis W. Dawson, of New York City, on the brief), for appellee.

Before HICKS, ALLEN, and HAMILTON, Circuit Judges.

ALLEN, Circuit Judge.

Appellant, as testamentary guardian of the minor children of Prather S. McDonald, instituted an action at law on a policy of insurance alleged to have been issued by appellee on the life of Prather S. McDonald, deceased. Jury trial was waived, and the District Court rendered judgment in favor of appellee upon the ground that the policy never came into legal existence.

The policy was in the amount of $10,000.00, with double indemnity provision in case of death resulting from an accident. The application for the policy was dated September 14, 1932. On September 23, 1932, Prather S. McDonald (hereinafter called the applicant) was seriously injured in an automobile accident, and died on October 9, 1932. On September 24, 1932, the day after the accident, the soliciting agent of appellee wrote a letter to the applicant, in which he stated:

"Your policy has been approved and issued subject to your approval of the big rider inside as to the Mode of Settlement. It is as you wanted it except that the Company makes provision in the event of the death of the children. If you approve of the rider, will you please sign the two enclosed forms and return to me. If you want the rider changed, return the whole works and I will have the changes made. If you can't take up the policy within the 60 days, the Company will naturally want the policy back."

With the letter was enclosed the policy, to which was attached a rider which provided, among other things, for payment in monthly installments of $50.00 to each of the two children of the deceased, and made provision for payment in a lump sum in the event of the death of both children to the executor or administrator of the last survivor. The application did not give instructions as to the mode of settlement, but the soliciting agent penciled a suggestion on the top margin, as follows: "Prin. & int. payable to beneficiaries at rate of $50.00 per mo. each as long as it lasts." A notice was also enclosed in the letter to applicant, directed to appellee's manager at New York, which read:

"The Policy No. 4644558, Insured's name Prather S. McDonald, must not be delivered or the first premium accepted thereon until and unless the request written below has been executed by the insured. This form, when properly executed as above, is to be returned to the Registrar's Division at the Home Office. E. Dixon Williams, Registrar."

To this notice was appended as part of the same printed form, to be signed by the proposed insured, the following statement:

"Referring to the above numbered policy, the undersigned hereby certifies that I have read the endorsement on said policy providing for Mode of Settlement elected and said endorsement is satisfactory and is accepted by me."

The letter also enclosed a receipt for the policy, to be signed by the insured, which reads as follows:

"The receipt of Policy No. ______ of The Mutual Life Insurance Company of New York for $ ______ on the life of ______ is hereby acknowledged. It is understood and agreed that the said policy is received for inspection only, notwithstanding the acknowledgment of the receipt of the premium contained in the policy; and it is expressly agreed that the said policy is not in force, the first premium thereon not having been paid. I hereby further agree to pay the premium thereon or return the policy upon demand."

On September 27, 1932, at the direction of the applicant, appellant mailed a check for the amount of the first premium to appellee, which refused to accept the check or to recognize the existence of the policy. The other two documents were not signed or returned to appellee. On September 26, 1932, the soliciting agent wrote to the applicant as follows:

"Today I was advised that the company wanted your policy recalled. They did not give me the reason, but I think it is because I told them to date it back to September 1st to give you the benefit of age 45, and I notice that they gave you the rate of age 46 (sticking you $15.00 per annum). When you return it, please mention any changes you want made in the rider. Also I think we got...