Brancato v. National Reserve Life Ins. Co.

• Decision Date: 06 November 1929
• Docket Number: No. 8605.,8605.
• Citation: 35 F.2d 612
• Parties: BRANCATO v. NATIONAL RESERVE LIFE INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

35 F.2d 612 (1929)

BRANCATO v. NATIONAL RESERVE LIFE INS. CO.

No. 8605.

Circuit Court of Appeals, Eighth Circuit.

November 6, 1929.

J. Francis O'Sullivan, of Kansas City, Mo. (George Halpern, of Kansas City, Mo., on the brief), for appellant.

Robert Stone, of Topeka, Kan. (James A. McClure, Robert L. Webb, and Beryl R. Johnson, all of Topeka, Kan., on the brief), for appellee.

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

WOODROUGH, District Judge.

A mother and daughter each signed a written application for a joint policy of insurance to be written on the two lives. They were examined by the local medical examiner of the insurance company, were deemed insurable by him, delivered the amount of the first annual premium in cash to the company's agent, and accepted a so-called "binding receipt" therefor, as follows:

"No. 42071 Binding Receipt — To be used 40736 when first premium is paid in cash.

"Received six hundred two and 50/100 dollars (602.50), in cash intended to be the first annual premium for proposed insurance of $10,000 on the life of Carmela Distefano and Lena Tumino, residing at 538 Troost, for which application is this day made to The National Reserve Life Insurance Company. Any insurance effected shall be in accordance with the terms and condition of this policy granted, and by reason of this payment shall be binding and in force from the date of the Medical Examination: Provided, said application shall be duly approved and accepted at the Home Office and that the above amount is the correct premium for the insurance approved and accepted, or if insufficient, shall immediately upon advice be made up to the correct amount. If the insurance applied for shall not be approved, the sum paid will be returned on surrender of this receipt.

"Dated Sept. 20, 1926. "J. M. Grodzins "(Signature of Agent.)

"Notice. — This receipt Must Not be used for partial cash payment or note settlement.

"$301.25 by check payable to company 310E15 H A 6202

"Bal to J. M. G."

The applications were forwarded and investigated. The company did not approve the applications, and so indicated by letter to the applicants, duly received by them. The letter, however, did not contain a refund of the payment made by the applicants, and some time after receiving the notification of the company's refusal to approve the applications, and before repayment or tender of the money was made by the company, the daughter died. The mother brought this suit to recover the amount of insurance applied for. A jury was waived, and, all the facts being stipulated, there was a trial to the court and judgment was rendered for the insurance company. Since the filing of the appeal in this court the appellant, Carmela Distefano, departed this life, and her executor has been substituted. By requests for findings and judgment, exceptions to the trial court's refusal, and appropriate assignments of error, appellant presents the question to this court whether the insurance company ought to pay the amount involved.

It is contended for appellant that the binding receipt by its wording evidenced a contract of interim or temporary insurance, which the company could not terminate without restoration or tender of the money that had been paid to it, and that the company is estopped to deny its liability because it retained the money after notice in writing from the applicants that, unless the money was forthwith returned, they would consider themselves insured.

Binding receipts substantially like the one relied upon by the appellant have received frequent consideration by the courts, and it is settled that the right reserved to the insurance company to accept or reject the application for insurance...