Conn. Mut. Life Ins. Co. v. Rudolph

• Decision Date: 01 January 1876
• Citation: 45 Tex. 454
• Parties: CONNECTICUT MUTUAL LIFE INSURANCE COMPANY v. MARY E. RUDOLPH ET AL.
• Court: Texas Supreme Court

45 Tex. 454

CONNECTICUT MUTUAL LIFE INSURANCE COMPANY

v.MARY E. RUDOLPH ET AL.

Supreme Court of Texas.

1876.

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                ¦(Signed)¦J. Q. A. CARTER, ¦
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APPEAL from Grayson. Tried below before the Hon. J. M. Lindsay.

Brown & Cowles, for appellant.--The case presented by the evidence is totally defective, because the company never issued a policy, and never, in any way, accepted the risk on the life of the applicant. An acceptance is the distinct act of one party as much as the offer is of the other. (May on Ins., 55.) Before the company can be held liable for the insurance applied for, the negotiations must have reached such a point that nothing remains to be done by either party but to execute what has been agreed upon. (Id., 41, 42.) In addition to this, some act must be done by the company indicating to the applicant an acceptance of the risk. (Id., 43-46; Bliss on Life Ins., secs. 137, 143.) In this case the company had not only refused to issue the policy, but returned the application for explanation. It is a uniform rule that the minds of the parties must meet on the same proposition, and that some act must be done, or something said, indicating an acceptance by the party to whom the proposition is addressed. It cannot be contended, with any show of reason, that filling the blanks, by the application clerk, was an acceptance of the risk.

If Carter has overpaid the company, he has his remedy, but certainly no right of action accrues to appellees as against the company. If the contract of insurance had been consummated, such payment as this would not have protected the applicant in a suit brought against him for the premium, which is alleged to have been paid. No inference unfavorable to the company can be drawn from not paying the amount mentioned in the receipt under the circumstances.

Hare & Bledsoe, for appellees.--The very nature of the application, the numerous questions and the manner of conducting the business, shows every disposition on the part of such companies to defraud whenever an opportunity offers; and for this reason courts have always construed this character of cases strictly as to the insurers, and given them a liberal construction in favor of the insured. For without this there would not be one policy in a thousand collected. In all cases where the home office is in one State and the business is transacted in other States by agents, these agents are regarded as general agents, clothed with all the powers of the company, and their acts and declarations, dum fervit opus, are binding upon the company. The acts of Carter and Bristol were then the acts of the company. Carter had received the premium from Richards and forwarded it to the company, and from the testimony of several witnesses, it had ample time to reach them; yet the only effort we see on the part of the company to return the money, was a letter to Carter from Secretary Olmstead, of January 19, 1871, instructing Carter to return the premium-money, which the company had in their possession. This was no more than resolving themselves to return it and not doing it. The verdict of the jury, we believe, settles the question of the acceptance of the risk by the company, and it cannot be said that there was no evidence to sustain it, for they have never returned the premium-money, nor in their answer offered to do so. The fact that Richards put his middle name in the application in different ways can be a matter of no importance, as the beneficiaries would only be put to some additional trouble in order to identify him. If it was of any importance, the company should have rejected the application on that account. But the note of the secretary, asking for an explanation “why he wrote his name in different ways,” was, if it showed anything at all, proof that they had taken the risk, and wanted simply to know how to place the name properly in the policy. It is clear that sending back for an explanation was not a rejection. As has been before stated, the company could not, under a pretext of this kind, play the game of “fast and loose;” for after the receipt of the premium and the presentation of the application, there was but one of two things left them to do: either accept the risk, or reject the application and return the money. According to their own rules the applicant was to be notified of the rejection, which, in this case, was never done.

GOULD, ASSOCIATE JUSTICE.

This suit was brought on an alleged contract of defendants to insure the life of White M. Richards, for the benefit of plaintiffs, his wife and children. The petition, as amended, alleges and exhibits the application of Richards of date November 11, 1870, the payment of the premium to the company's agent, setting out the receipt therefor, in which it is provided that the “insurance takes effect from the date thereof, provided the application therefor be approved and accepted by said company;” that the contract was completed by the acceptance of the application by the company, but that afterwards, hearing of the death of Richards, they refused to deliver the policy.

The petition was excepted to on the ground that the general averment of the acceptance of the application, without specifying the particular acts or facts relied on as constituting such acceptance, is insufficient. Counsel have adduced no authority in support of the exception; and, on principle, we think the averment sufficient.

The defense relied on, consisted in the denial of the acceptance of the application and in the alleged false statement of Richards in his application, and in response to a question which he was required to answer, that he was not and had not been addicted to the use of stimulants to excess, but was temperate. The jury found a verdict for plaintiffs, and the principal question in the case is the sufficiency of the evidence of the acceptance of the application.

The application was made by Richards at the solicitation of Carter and Bristol, agents of the company, acting under Hopkins and Graham, general agents at Leavenworth, Kansas.

The answers to the usual questions were written by Bristol, and the question, Has any company ever declined to grant insurance on your life? was answered in the negative. The signature of the applicant was not written uniformly in places where his full signature was required, being in one place White McLennan Richards, in another White McLelland Richards. On the 11th of November, 1870, the application was completed and the following receipt executed, the premium having been arranged to the satisfaction of the agent:

“GENERAL AGENCY OF CONNECTICUT MUTUAL LIFE INS. CO.,

SHERMAN, TEXAS, 1870.

Received the sum of one hundred and nineteen dollars and eighty-five cents on account of premium on an insurance of five thousand dollars on the life of White M. Richards, of Whitesboro, county of Grayson, and State of Texas, for which an application, dated the 11th day of November, 1870, has been made to the Connecticut Mutual Life Insurance Company of Hartford. Said insurance takes effect from the date hereof, provided the application therefor be approved...