De Cesare v. Metro. Life Ins. Co.

• Decision Date: 08 March 1932
• Citation: 278 Mass. 401,180 N.E. 154
• Parties: DE CESARE v. METROPOLITAN LIFE INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

278 Mass. 401

180 N.E. 154

DE CESARE

v.METROPOLITAN LIFE INS. CO.

Supreme Judicial Court of Massachusetts, Essex.

March 8, 1932.

Report from Superior Court, Essex County; A. E. Pinanski, Judge.

Action by Matilda De Cesare against the Metropolitan Life Insurance Company. A verdict was directed for defendant. On report.

Judgment for plaintiff.

J. M. Morrison and Robert N. Daley, Jr., both of Boston, for plaintiff.

James F. Bacon and William P. Kelley, both of Boston, for defendant.

SANDERSON, J.

This is an action of contract in which the plaintiff seeks to recover as beneficiary on an alleged contract of insurance on the life of Frank De Cesare. The trial judge directed a verdict for the defendant on the sole ground that no valid contract of insurance existed between the defendant and De Cesare, husband of the plaintiff, at the time of his death on March 31, 1927.

The plaintiff in her declaration alleged that the defendant issued to Frank De Cesare on or about February 25, 1927, a policy of insurance on his life payable to the plaintiff as beneficiary, and that on March 7, 1927, he made another contract with the defendant for an additional policy which was to be issued on the same examination and payable to the plaintiff as beneficiary upon which a payment equal to the full first premium on the policy applied for was made by the applicant and for which the receipt described below was given; that the applicant died on the thirty-first day of March, 1927, before the policy applied for was actually delivered; that the defendant had notice and proof of his death and was bound to pay the plaintiff as beneficiary the sum named in the application. The answer, after making a general denial, sets up the defence of fraud and also that the policy was not delivered to the insured and therefore never took effect as a contract, and if issued and delivered it was dated, issued and delivered to take effect as of April 1, 1927, and never took effect because of the death of the applicant. The answers to questions submitted to the jury eliminated from the case the defences of fraud.

The second application for a poliey of insurance was dated March 4, 1927, and contained a clause in the following terms: ‘It is understood and agreed: * * * 4. That the Company shall incur no liability under this application until it has been received, approved, and a policy issued and delivered, and the full first premium stipulated in the policy has actually been paid to and accepted by the Company during the lifetime of the Applicant in which case such policy shall be deemed to have taken effect as of the date of issue as recited on the first page thereof.’ The record states that on March 7, 1927, Frank De Cesare had made ‘full payment of all premiums due on the policy in suit’ and a receipt was issued to him on that date by duly authorized agents of the defendant company acting within the scope of their authority, stating the money was received ‘on account of application made this date to the Metropolitan Life Insurance Company. Such advance payment will be returned to the applicant (a) if application is declined or (b) if a policy is issued other than as applied for and applicant declines to accept it. If a policy is issued as applied for and applicant declines to accept it and pay the balance of the first premium, then the advance payment will be forfeited. No insurance is in force on such application unless and until a policy has been issued thereon and delivered in accordance with the terms of such application, except that when such advance payment is equal to the full first premium on the policy applied for and such application is approved at the Home Office of the Company for the Class, Plan and Amount of insurance and at the rate of Premium as so applied for, then the amount of insurance applied for will be in force from this date, but no obligation is assumed by the Company unless and until such application is so approved. If a policy is offered by the Company that is not in all respects the same as the policy applied for, such policy will not take effect unless and until it has been accepted by the applicant and the additional premium therefor, if any, has actually been paid to and accepted by the Company during the lifetime of the applicant. Mar. 7, 1927. I. Leone District, Lawrence, Mass. If policy is not delivered to you within 60 days from date, this receipt should be presented at the District Office, or the Home Office in New York for redemption.’

Frank De Cesare was admitted to a hospital in Boston on March 15, 1927, where he submitted to an operation on March 17, 1927, and where he remained until his death on March 31, 1927. The application for the policy was approved during the lifetime of the applicant at the home office of the defendant for the class, plan and amount of insurance and at the rate of premium as applied for. The record states: ‘Prior to the death of the said Frank De Cesare the policy here in suit dated April 1, 1927 was delivered at the home of the named insured, Frank De Cesare on March 25, 1927 by duly authorized agents of the defendant company. The named insured, Frank De Cesare, made an advance payment equal to the first full premium on the policy applied for. The policy as delivered by the company was in all respects the same as the policy applied for, except as to the date thereof.’ The plaintiff in her declaration and the defendant in its brief both state that the policy was not delivered to the applicant. The policy states on its first page that it is issued in consideration of the application therefor and the payment for the insurance of $64.20 ‘(which maintains this Policy in force for a period of one month from its date of issue, as set forth below).’ The policy also states under the heading of ‘Provisions and Benefits': ‘This Policy and the application therefor constitute the entire contract between the parties. * * *’ Following the death of Frank De Cesare due proof of death within the meaning of the terms of the policy was made by the plaintiff. The plaintiff surrendered the policy to the defendant in accordance with its terms, and at the same time surrendered to it the receipt above quoted and in all other respects complied with the requirements of the policy and the receipt. The parties stipulated ‘that if on the evidence properly admitted or improperly excluded, the ordering of a verdict was right, judgment is to be entered on that verdict. If the ordering of a verdict was wrong, judgment is to be entered for the plaintiff in the sum of Ten Thousand Dollars with interest thereon from April 12, 1927.’ No contention is made that the plaintiff is not the proper party to bring the action if a valid contract of insurance was in force at the time of the death of the applicant. The plaintiff bases her right to recover not on the policy but contends that the terms of the receipt issued to the applicant upon his payment of the full first premium charges rendered the insurance applied for effective immediately upon the approval by the company of his application, and further contends that the language of the receipt should be read in connection with the application and the policy later issued.

The right, apart from some statutory prohibition, to enter into contracts for temporary insurance either by oral or written coverage agreements seems to be well established in this commonwealth. Sanford v. Orient Ins. Co., 174 Mass. 416, 422, 54 N. E. 883,75 Am. St. Rep. 358;McQuaid v. AEtna Ins. Co., 226 Mass. 281, 284, 115 N. E. 428;Mowles v. Boston Ins. Co., 226 Mass. 426, 115 N. E. 666;Cass v....