Central Life Ins. Co. v. Roberts

• Decision Date: 09 June 1915
• Citation: 176 S.W. 1139,165 Ky. 296
• Parties: CENTRAL LIFE INS. CO. v. ROBERTS. [a1]
• Court: Kentucky Court of Appeals

176 S.W. 1139

165 Ky. 296

CENTRAL LIFE INS. CO. v. ROBERTS. ^[a1]

Court of Appeals of Kentucky.

June 9, 1915

Appeal from Circuit Court, Fayette County.

Action by Anna Trout Roberts against the Central Life Insurance Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Bailey D. Berry, of Lexington, and Kohn, Bingham, Sloss & Spindle of Louisville, for appellant.

Allen &amp Duncan, of Lexington, for appellee.

TURNER J.

Prior to the 7th of February, 1913, the vice president of appellant company and Samuel J. Roberts reached an oral agreement by which that company was to issue a policy of insurance upon his life for $5,000, payable to Roberts' wife, appellee Anna T. Roberts. As a part of the agreement the company was to take within one year advertising in the Lexington Leader, a daily newspaper published there, and owned exclusively by Roberts, at agreed rates to the amount of $190, half of which was to be paid for in cash by the company as the advertising was inserted, and the other half to be applied on the first premium. Under this agreement Roberts, on February 7, 1913, signed a written application for insurance, which contained, among other things, the following stipulation, to wit:

"No contract of insurance shall be deemed made and no liability on the part of said company shall arise until a policy shall be issued and delivered to me, and the first premium thereunder actually paid, all while I am in good health."

On February 12, 1913, Roberts was examined by the local physician of the company at Lexington, and his examination approved and immediately forwarded to the general offices of the company at Louisville, where on the next day, February 13th, the same was approved by the medical director of the company. On the same day that his application was so finally approved the company through the private secretary of the president thereof wrote to the Lexington Leader as follows:

"I am inclosing herewith copy for an advertisement which you are to run for this company. Cuts for this ad will be furnished you by the Lexington Herald."

In accordance with this order from the company Roberts on the 16th day of February had inserted in his paper the advertisement as requested, and under his direction there was entered upon the books of the Lexington Leader the charges of this advertisement, showing that the same was to be paid for, half in cash and the other half to be credited upon the premium due appellant company on his life insurance. On the 19th day of February the policy was issued by the company, and on the 21st day of February it was mailed to the vice president at Lexington, with directions to deliver it to Roberts and take his receipt therefor. The vice president, however, was not at Lexington when it reached there, and did not actually receive the policy until the 25th, when he returned. On the 25th or 26th, he attempted to deliver the policy to Roberts, but he was informed at his (Roberts') office that he was out of the city, and he again attempted more than once to deliver the policy along about the 4th, 5th, or 6th of March at Roberts' place of business when he was informed that Roberts was at home sick. In the issue of the Lexington Leader on the 4th of March, 1913, there was again inserted an advertisement of appellant company under the terms of this contract. On the night of the 22d of February Roberts had a chiropodist to do some work upon his feet, and on the morning of the 23d of February, he and his wife left Lexington for a visit to Canton, Ohio; while in Canton, on the 24th or 25th, Roberts complained that his foot hurt him, but nothing was done for it so far as the record discloses. He and his wife reached Lexington on their return about 1 o'clock a. m. on March 1st, which was Saturday. On that day he went to his office early in the morning and remained there continuously all day and all night up to about 5 o'clock on Sunday morning, March 2d, in getting out the Sunday edition of his paper. On the afternoon of March 2d, he had some sort of slight operation performed upon his toe which had given him trouble, went home, and was never at his office again; blood poison developed, and he died on the 23d day of March, the policy of insurance never having been actually delivered to him, but having been returned by the vice president to the company about the 22d of March after receiving information of the serious illness of Roberts. This is an action by the beneficiary seeking a delivery of the policy and a recovery thereon. The defense of the company is that no contract of insurance ever became effective, while the plaintiff seeks to avoid the provision quoted in the application upon the ground that the company had waived by its conduct the right to rely upon that stipulation in the application, and had by its said conduct estopped itself to rely thereon.

Whether the company waived the right to rely upon the provision in the written application, or whether it is estopped to rely upon the same, must be determined from the conduct of the parties subsequent to the signing of the written application by Roberts. It is not denied that there was a parol agreement prior to that time, the claim of the company being that it was always subject to the provisions of the written application, while for the appellee it is urged that there was nothing left undone to complete the contract, after the examination was had and approved, except the physical delivery of the policy, and that that requirement had been waived by the election of the company to treat the contract as closed and already effective, and that the company, by its conduct in inducing Roberts to place himself in such position that he could not refuse to accept the policy when tendered to him, had estopped itself to deny there was a contract.

In the light of the uncontradicted evidence that the parties had an agreement; that the written application had been made; that the physical examination had been favorably acted upon--there can be no doubt that the letter of the company, dated the 13th of February, wherein it directed the insertion of "an advertisement which you are to run for this company" had reference to an existing agreement between the parties which involved the insertion of the advertisement. In the light of the evidence the direction in the letter to insert "an advertisement which you are to run for this company" can mean nothing more nor less than that:

"Certain propositions are now pending between you and this company, by the terms of which the company is entitled to insert certain advertisements in your paper, and the company here and now elects to and does accept your proposition and directs you, under the terms of that proposition, to insert the advertisement."

No other possible effect can be given to that letter than an acceptance of the proposals that were pending between the parties and an election upon its part to treat the contract between them as closed, and particularly so when this letter was written on the very day that the examination of the applicant Roberts was finally passed upon by the company's physical director. In other words the company on that day, after the approval of the physical examination, elected to accept the benefits coming to it under the pending negotiations between it and Roberts, and thereby chose to treat the contract of insurance as already in effect. Certainly, after having chosen to accept the benefits, it will be deemed to have waived that provision in the application, inserted for its benefit, which gave it the right in the future to claim that the contract was not in effect.

It is apparent that the written application was not the whole contract between the parties; the...