Rehearing
Denied May 22, 1919
Appeal
from Circuit Court, Madison County; Robert C. Brickell
Judge.
Action
by John B. Brannum against the Cherokee Life Insurance
Company on a life insurance policy. Judgment for plaintiff
and defendant appeals. Reversed and remanded.
The
second replication contains the receipt referred to in the
opinion, and is as follows:
(2) On said 26th day of October 1916, the defendant, by and
through its duly authorized agent Charles B. Tarr, signed and
delivered to the plaintiff an instrument in writing in words
and figures as follows:
"This receipt is not valid for more than first
year's premium nor in excess of a premium on $25,000.00
of insurance. This receipt must not be altered. The
settlement as shown herein must correspond in amount with the
settlement as shown in the application of corresponding
number signed by the applicant.
"Received of John S. Brannum, at Owen's X Roads
state of Alabama, this 26th day of October, 1916, the sum of
seventy-eight and 08/100 dollars, in connection with his
application for insurance in the Cherokee Life Insurance
Company, said application corresponding in date and number
with this receipt and containing said applicant's
declaration that he paid the sum hereby receipted for, and
that he assents to the terms of this receipt, as follows, to
wit:
"First, that if a policy be delivered on said
application said company shall accept this receipt as cash
towards the payment on the first premium of said policy.
"Second, that if the company fails to offer to deliver a
policy on said application within ninety days from this date
and if such failure is not attributable to the
applicant's neglect or refusal to comply with the
company's rules, regulations and requirements as to
medical examination and other customary requirements in
acting upon application for insurance (and only on this
event) the company will return said sum to the applicant upon
surrender of this receipt, otherwise the payment will be
retained by the company in consideration of this trouble and
expense incurred on account of this application.
"Third, that if said company will within ninety days
from this date offer to deliver to said applicant a policy of
insurance on the plan applied for and said sum in
consideration of the trouble and expense it shall have
incurred on account of said application," etc.
"Fourth, that this receipt will not be valid for any sum
in excess of the sum declared by said applicant in his said
application to have been paid. It will not be valid if issued
after December 31, 1916. It will not be valid if any erasures
or additions have been made in printed form.
"Fifth. That this receipt is nonnegotiable and cannot be
assigned or transferred.
"Sixth. If full settlement has been made with this
application the insurance will be in force from the date of
approval of the completed application by the company medical
adviser.
"Seventh. No conditions or agreements other than those
printed herein and in the application shall be binding.
Conditions on back of this receipt a part of same, as if
printed herein.
"[Agent must sign here] Chas. B. Tarr, Agent. No. 46397.
AC. Chas. B. Tarr. R.R. Guice. Cherokee Life Insurance
Company. Gadsden, Alabama."
On the back is found the following in writing:
"The agent is not authorized to give this receipt to the
persons exceeding the limit of height and weight indicated in
the table below or to those who have been rejected by another
company or who are not in good health."
And plaintiff alleges that full settlement was made with said
application by said agent taking the notes of said plaintiff
for the premium one for $50 due on delivery of the policy and
the other for $28.08 due on January 15, 1917, both of which
were paid when due and payment accepted by the defendant and
said policy delivered to plaintiff. And plaintiff further
alleges that said completed application for insurance was
approved by the defendant's medical director on the 4th
day of January, 1917, which was prior to the death of said
Bertha Brannum.
THOMAS
J.
The
suit was upon a policy of life insurance in Code form, and
resulted in judgment for the plaintiff.
Defendant's
pleas were: (1) A denial of liability under its policy; (2)
that the application which is made a part of the contract
provides that the policy shall not become effective
"until the first premium is paid and the policy
delivered to and received by the applicant during her life
and good health"; that the insured died before the
payment of the first premium and before the policy was
delivered; (3) that the policy was not delivered until after
the death of the insured, of which defendant did not know, at
the time of delivery of the policy; (4) that the policy was
procured to be delivered by the fraud of the plaintiff in
withholding (before and at the time of that delivery)
information of insured's death.
Defendant's
demurrers to the several replications were overruled, and
this ruling is duly assigned as error.
Were
the replications full answer to the several pleas? Referring
to the specific averments of the latter, "the
replication for the insurance policy which is made a part of
the policy here sued on" was a part of the policy as
required by the statute and its construction by this court.
Code 1907, § 4579; Prudential Casualty Co. v. Kerr,
80 So. 97; Mut. Life Ins. Co. v. Lovejoy, 78 So.
299, 301, L.R.A.1918D, 860; Norris v. N.E. Mut. Life Ins.
Co., 73 So. 377; Pac. Mut. Life Ins. Co. v.
Hayes, 76 So. 12; Locomotive Engrs. Mut. L. & A.
Ins. Asso. v. Hughes, 77 So. 352; Supreme Ruler,
etc., v. Darwin, 79 So. 259; Ill. Surety Co. v.
Donaldson, 79 So. 667, 670; Eminent Household of
Col. Woodmen v. Blackerby, 78 So. 821. Of this written
contract of insurance with the application therefor expressed
therein, it is averred that the contract stipulated that
"said policy should not take effect until the first
premium is paid and the policy delivered to and received by
the applicant during her lifetime and in good health,"
and pleas 2 and 3 aver that the policy was not so delivered
during the life and good health of Mrs. Brannum, but after
her death, and (plea 3) of which fact the defendant did not
know at the time of the delivery of said policy. The fourth
plea avers that--
"The application for the policy sued which is made a
part hereof and was signed by the assured stipulates that the
policy should not take effect until the first premium is paid
and the policy delivered to the applicant during her lifetime
and good health, and *** that said premium had not been paid
and the policy delivered when the insured died, but that the
policy was procured to be delivered by the fraud of the
plaintiff in this, that plaintiff, after the death of the
insured, called up the defendant by long distance phone, and
asked that said policy be delivered, and concealed from the
defendant the fact that the insured was then dead, and
thereby induced the defendant to forward said policy attached
to a draft for the first premium to the bank of New Hope to
be delivered on the payment of the draft, and thereafter
plaintiff paid said draft and secured the policy before
defendant had any knowledge of the death of the insured, and
gave no notice thereof until several
days after her death and until he had secured and delivered
the policy as above stated."
Plaintiff
took issue on these pleas. Further replying to pleas 2, 3,
and 4, he said that on the date of the application for
insurance (October 26, 1916) the defendant through its
authorized agent signed and delivered to the plaintiff an
instrument in writing, known in insurance law as a
"binding slip or memorandum" (Sun Ins. Office
of London v. Mitchell, 186 Ala. 420, 427, 65 So. 143),
which is embodied in the replications and will be set out by
the reporter. It is recited and stipulated in this receipt
that there had been received of John S. Brannum, on
"this 26th day of October, 1916, the sum of
seventy-eight and 8/100 dollars, in connection with his
application for insurance in the Cherokee Life Insurance
Company, said application corresponding in date and number
with this receipt and containing said applicant's
declarations that he has paid the sum hereby receipted for,
and that he assents to the terms of this receipt, as follows,
to wit: First, that if a policy be delivered on said
application, said company shall accept this receipt as cash
towards the payment of the first premium of said policy. ***
Sixth, if full settlement has been made with this application
the insurance will be in force from date of approval
of the completed application by the company's medical
director" (italics supplied). Plaintiff further replied
to said pleas (2, 3, and 4) by the additional averment
(replications 4 and 5) that--
"The defendant did not, prior to the death of said
Bertha Brannum, or prior to the delivery of the policy,
notify the plaintiff or said Bertha Brannum, by notice
brought home to them or either of them, that said instrument
in writing or receipt was not further binding on
defendant."
It is
a familiar declaration of the courts that contracts of
insurance are liberally construed in favor of the assured
and, if doubtful, such contracts are construed against the
insurer. Union Cent. Rel. Asso. v. Johnson, 73 So.
816; Allen v. Standard Ins. Co., 73 So. 897;
Empire Life Ins. Co. v. Gee, 178 Ala. 492, 60 So.
90; Equitable Life Ass. Soc. v. Golson, 159 Ala.
508, 48 So. 1034; Nat'l Life & Acc. Ins. Co. v.
Lokey, 166 Ala. 174, 52 So....
