Bellak v. United Home Life Ins. Co.
| Decision Date | 19 March 1954 |
| Docket Number | No. 11927.,11927. |
| Citation | 211 F.2d 280 |
| Parties | BELLAK v. UNITED HOME LIFE INS. CO. |
| Court | U.S. Court of Appeals — Sixth Circuit |
A. Albert Sugar, Detroit, Mich., Rottman, Siegel & Sugar, Detroit, Mich., on the brief, for appellant.
David G. Barnett, Detroit, Mich., Lawrence E. Brown, David G. Barnett, Detroit, Mich., on the brief (Fischer, Brown, Sprague, Franklin & Ford, Detroit, Mich., of counsel), for appellee.
Before SIMONS, Chief Judge, and ALLEN and MILLER, Circuit Judges.
Appellant, Katherine F. Bellak, brought this action to recover from the United Home Life Insurance Company, appellee, under an alleged life insurance contract, in which she was named the beneficiary, covering the life of her son, Herbert C. Bellak. The District Judge sustained appellee's motion for summary judgment and dismissed the action.
The pleadings, pre-trial conference, and answers of the appellee to interrogatories propounded by the appellant show the following facts: On or about March 30, 1951, Herbert C. Bellak made application to the appellee for a life insurance contract in the amount of $10,000 wherein the appellant was designated as the beneficiary. About April 2, 1951, Bellak paid to the appellee through S. H. Howard, its authorized soliciting agent, $121.70, representing the first quarterly premium payment thereon. The application provided — "I agree * * * (e) that the insurance hereby applied for shall not take effect unless and until the full first premium or the Short Term Premium, shall have been paid and the policy delivered to the applicant during the lifetime and sound health of the applicant, except as provided in the Binding Receipt bearing the same number as this application and given to the applicant by an authorized agent of the Company for the said premium." It also provided that if the risk was not assumed by the company, the sum paid would be returned in accordance with the provisions of the binding receipt. On or about May 1, 1951, Bellak died as a result of an appendectomy operation, of which fact appellee was informed by an attorney in Detroit on or about May 7, 1951. The application was rejected on May 9, 1951, and during the latter part of May it sent to the administrator of the estate of the decedent its check for $121.70, as a return of the premium, which check was not accepted or cashed. Appellee refused to deliver a policy to the appellant, and also refused appellant's demand for payment of the $10,000 insurance applied for.
Appellant claims that when Bellak paid the first quarterly premium of $121.70, agent Howard executed and delivered to Bellak the Binding Receipt referred to in the application. However, appellant was not able to produce the executed receipt, and appellee's evidence was that the Binding Receipt bearing the same number as the application was still in its file and had never been executed. There is no dispute that such Binding Receipt contained this provision: "(1) That, subject to the terms and conditions of the policy contract, the insurance applied for shall be effective from the date of the application, or the date of the medical report if required by the Company, whichever is later, provided the Company shall be satisfied that on said date the applicant was insurable under the rules, limits and standards of the Company for the amount and plan of insurance applied for and at the premium stated in this Binding Receipt and shall approve the application at its Home Office."
It is appellant's contention that although no insurance policy was actually issued, the execution of the application, the payment of the required quarterly premium, and the execution and delivery by the appellee of the Binding Receipt constituted a valid contract of insurance on the life of Bellak, effective as of the date of the medical report. Appellee contends that conceding, for the purposes of the motion only, that the Binding Receipt was executed and delivered by its agent, there was no contract of insurance in existence on May 1, 1951, the date of Bellak's death, because the appellee was not satisfied that Bellak was insurable under the rules, limits, and standards of the Company for the insurance applied for, and that the application had not been approved by it at its Home Office, both of which conditions were required to be met by the terms of the Binding Receipt.
Appellee's motion for summary judgment was based on the foregoing facts. In opposition to the motion, appellant filed the affidavit of the soliciting agent Howard, in which he set out his solicitation of the application, the payment of the quarterly premium to him, and the execution and delivery by him to Bellak of the Binding Receipt which Bellak folded and placed in his billfold. The affidavit also stated that in answer to Bellak's inquiry as to when the insurance became effective, he told him to take his medical examination, and, if the doctor did not reject him at the time of the examination, he was insured from that time on as if the policy had been issued; that Bellak took the medical examination about three or four days after the application was made; that the affiant was never notified by the examining doctor or by anyone else that the applicant had been rejected for any reason whatsoever until after the death of Bellak, when the appellee returned the premium of $121.70 to be given to the administrator; that the procedure which he followed in soliciting the application, obtaining the premium, giving the applicant the Binding Receipt, his statement to the applicant that he was insured from the time of the medical examination, if not then rejected by the doctor, was the authorized procedure for all agents of the appellee, and also the standard procedure in all life insurance companies with which he had been associated for approximately 15 years.
The District Judge held that the undisputed facts showed that at the time of Bellak's death the appellee had not delivered a policy to him, had not accepted the risk by approval of the application at its Home Office, and had not entered into any contract of insurance, and sustained the motion for summary judgment. He also made a finding that the Binding Receipt was never executed by the agent nor delivered to Bellak, which, in view of the conflicting evidence on the issue, he was not authorized to make in ruling on the motion for summary judgment. However, he disregarded this finding in making his ruling, assuming for the purposes of the motion that the Binding Receipt had been executed and delivered to the intended...
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