Braman v. Mutual Life Ins. Co.

• Decision Date: 15 October 1934
• Docket Number: No. 9754.,9754.
• Citation: 73 F.2d 391
• Parties: BRAMAN et ux. v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Eighth Circuit

73 F.2d 391 (1934)

BRAMAN et ux. v. MUTUAL LIFE INS. CO. OF NEW YORK.

No. 9754.

Circuit Court of Appeals, Eighth Circuit.

October 15, 1934.

Carl J. Eastvold, of Ortonville, Minn. (Murphy, Johanson, Winter & Nelson, of Wheaton, Minn., on the brief), for appellants.

M. J. Doherty, of St. Paul, Minn. (Doherty, Rumble & Butler, of St. Paul, Minn., on the brief), for appellee.

Before GARDNER, WOODROUGH, and VAN VALKENBURGH, Circuit Judges.

GARDNER, Circuit Judge.

Appellants, as plaintiffs below, brought this action to recover $5,000 upon an alleged life insurance policy insuring the life of their son, they being named as beneficiaries therein, it being alleged that the insured met his death by external, violent, and accidental means.

As a matter of convenience and to avoid confusion, the parties will be referred to as they appeared in the lower court.

The defendant denied in effect that any contract of insurance had ever been consummated and pleaded certain provisions of or recitals in the written application signed by insured, the correctness and existence of which were admitted by the reply filed by plaintiffs.

Plaintiffs' son, Glenn D. Braman, was solicited by Kenneth W. Stockton and Edward F. Gettman for an application of life insurance on December 13, 1931. Stockton was a soliciting agent of defendant, while Gettman was employed by another soliciting agent of defendant, McRae, to assist him in soliciting insurance, but he was not defendant's agent. An application for life insurance with double indemnity in case of accidental death was signed by Glenn D. Braman. There was testimony on behalf of plaintiffs, and as the court directed a verdict for the defendant, we must accept it as true, that Stockton and Gettman told plaintiffs, who were present at the time, and their son, that as soon as the premium was paid the insurance would be in effect, subject to the passing by the applicant of a satisfactory medical examination. There was testimony that in payment of the first premium Gettman was to take the note of Charles Braman, father of the applicant, discount it at the bank of which McRae was cashier and Gettman was assistant cashier, and send the money to the defendant company. Gettman agreed to accept the note at the bank and advance the money for the premium. Pursuant to this understanding, plaintiff Charles Braman gave his note to Gettman personally for the amount of the premium. This note Gettman held in his personal possession, but did not advance the money either to Braman nor the defendant, nor attempt so to do until after Glenn D. Braman was accidentally killed on December 21, 1931.

Glenn D. Braman was given a physical examination by defendant's local examining physician at Graceville, Minn., and the complete application with medical examiner's report was mailed to defendant's branch office at Sioux City, Iowa, December 18, 1931. The physical examination indicated that the applicant was an insurable risk. The papers were received at defendant's home office in New York City December 23, 1931, and on that date the application was approved by defendant's home office without knowledge of the prior death of applicant. In the meantime, on December 22, 1931, and after he had learned of the death of applicant, Gettman sent a draft for the amount of the first premium to the Sioux City office of defendant. This draft was returned to Gettman.

The application which was signed by Glenn D. Braman was on the printed form provided by the defendant, and recited that, "The proposed policy shall not take effect unless and until delivered to and received by the Insured, the Beneficiary, or by the person who herein agrees to pay the premiums, during the Insured's continuance in good health and unless and until the first premium shall have been paid during the Insured's continuance in good health; except in case a conditional receipt shall have been issued as hereinafter provided."

Following this recital, appear fourteen paragraphs consecutively numbered. The first gives the residence, occupation, place of birth, and age of the applicant; the second contains a declaration that the applicant does not contemplate going to a foreign or tropical country or changing his occupation; the third recites that the applicant does not contemplate making aviation flights or aeronautical ascensions; the fourth, that the applicant has no negotiations for other life insurance; the fifth, that the applicant has never had an application for life insurance declined or postponed by any other company; the sixth, that he has no insurance now in force on his life in any other company. The seventh calls simply for details in relation to the four preceding paragraphs, and are all answered in the negative; the eighth gives the amount of the insurance applied for; the ninth gives the plan of insurance as two-year term, with automatic conversion to end age sixty-five, with level disability benefits, double indemnity benefits, and waiver of premium benefits; the tenth recites that if the company is unwilling to issue a policy for the plan and amount applied for, the application shall be for such plan and amount as shall be issued by the company; the eleventh gives the names of the beneficiaries; the twelfth reserves the privilege of changing the beneficiary to the applicant; the thirteenth refers to surrender values and dividends. The fourteenth is as follows:

"$____ in cash has been paid to the Soliciting Agent and a conditional receipt No. ____, signed by the Secretary of the Company, and countersigned by the agent has been issued making the insurance in force from this date, provided this application shall be approved."

Following the foregoing fourteen separately numbered paragraphs, the application contains provision that, "It is agreed that no Agent or other person except the President, Vice-President, a Second Vice-President, or a Secretary of the Company has power on behalf of the Company to bind the Company by making any promise respecting benefits under any policy issued hereunder or accepting any representations or information not contained in this application, or to make, modify or discharge any contract of insurance, or to extend the time for payment of a premium, or to waive any lapse or forfeiture or any of the Company's rights or requirements."

Testimony on behalf of plaintiffs was to the effect that the agent Stockton said he did not have his receipt book with him, and on that account he made out a receipt on a piece of paper, using for the purpose the back of a blank check or note, and this was delivered to applicant. This receipt was not produced at the trial, but proper foundation being laid, secondary evidence was received as to its contents. In substance, the receipt acknowledged receipt of the first annual premium, and recited that the policy would go into effect at once, or when the medical examination had been taken. It was not signed by the secretary of the company.

At the close of all the testimony, the court directed a verdict for the defendant, and from the judgment entered thereon this appeal has been perfected.

While there are numerous assignments of error, we think the substantial question presented is whether the court erred in directing a verdict for the defendant. It is broadly asserted in plaintiffs' brief that "the policy was in force at the time of the death of the assured, and the plaintiffs made out a case for the jury." If, by the policy, plaintiffs mean the final formal contract of insurance customarily issued by the defendant, it seems clear that that instrument as such could not have been in effect at the time of the death of the applicant because the application had not been approved by the company and the policy was not even in form executed until after that date. But to this plaintiffs say, "The plaintiffs' answer to that is that that was brought about by the defendant's own delay and that it was a ministerial act to write up and sign the policy and that the issuance and signature and delivery thereof did not depend upon any conditions precedent or subsequent; because all of the conditions required by the company and its agents had been complied with and fulfilled by the assured or the beneficiary." But it is to be noted that the application provides that the proposed policy shall not take effect unless and until delivered to and received by the insured, the beneficiary, or by the person who therein agrees to pay the premiums during the insured's continuance in good health. This was a condition precedent to the taking effect of the policy unless, as we shall later consider, there was effected a contract of present insurance. Jensen v. New York Life Ins. Co. (C. C. A. 8) 59 F.(2d) 957; New York Life Ins. Co. v. McCreary (C. C. A. 8) 60 F.(2d) 355; Inter-Southern Life Ins. Co. v. McElroy (C. C. A. 8) 38 F.(2d) 557.

The exception to the above-noted conditions is stated as follows: "Except in case a conditional receipt shall have been issued as hereinafter provided." Was there a contract of interim insurance? This would seem to depend upon what authority was vested in the soliciting agent. The application signed by Glenn D. Braman recites that, "It is agreed that no Agent or other person except the President, Vice-President, a Second Vice-President, or a Secretary of the Company has power on behalf of the Company to bind the Company by making any promise respecting benefits under any policy issued hereunder or accepting any representations or information not contained in this application, or to make, modify or discharge any contract of insurance, etc."

These restrictions on the power of the agent, being contained in the application signed, were notice to the applicant of the lack of authority of the soliciting agent to make any contract of insurance except as authorized by the provisions of the application itself. New York Life Ins. Co. v. McCreary (C. C. A. 8) 60 F.(2d) 355; Jensen v. New...