Duffy v. Bankers' Life Ass'n of Des Moines
| Decision Date | 18 February 1913 |
| Citation | 139 N.W. 1087,160 Iowa 19 |
| Parties | CATHERINE E. DUFFIE, Appellant, v. BANKERS' LIFE ASSOCIATION OF DES MOINES, IOWA |
| Court | Iowa Supreme Court |
Appeal from Poweshiek District Court.--HON. BYRON W. PRESTON, Judge.
ACTION for damages resulted in a directed verdict for defendant and judgment thereon. The plaintiff and intervener appeal. Affirmed in part and reversed in part.
As to plaintiff the judgment Affirmed. The judgment against the intervener Reversed.
Bray & Shifflet and O. M. Brockett, for appellant.
I. M Earle, for appellee.
OPINION
The plaintiff is the widow of Joseph M. Duffie, who departed this life July 9, 1911. He had applied to the defendant association on June 8th preceding for a certificate of membership therein, stipulating the payment of an indemnity of $ 2,000 upon his death; but the association had failed to accept or reject the application, and, in this action recovery of that amount as damages is sought by plaintiff who was named as proposed beneficiary in the application, on the ground "that defendant negligently failed to take any action upon said application before the death of said Joseph M. Duffie and negligently failed either to issue to him a certificate of insurance as provided for therein or to reject said application and give him notice thereof in sufficient time to enable him to procure other insurance," and, in consequence of such negligence, she was deprived of the benefit of the insurance. The widow, as a duly appointed and qualified administratrix, filed a petition of intervention, wherein she prayed judgment for damages to the estate of deceased on the grounds:
That defendant's said agent carelessly and negligently failed to send the application of said decedent to the home office of the defendant association after he had been examined by defendant's examining physician at Tama, Iowa; that, in consequence of such negligence on the part of said agent, no policy or certificate of life insurance was issued to said applicant by the defendant association; that, if said application had been forwarded by said agent to the home office of the defendant association as soon as said applicant was examined by defendant's examining physician at Tama, Iowa the defendant association would have issued and delivered a policy or certificate of life insurance for $ 2,000 to said applicant before he died, and such insurance would have been in force at the time of his death.
At the conclusion of plaintiff's evidence, the court directed a verdict for the defendant, and this is the only ruling of which complaint is made.
The facts admitted or proven on the trial first should be stated. The defendant is a mutual assessment insurance association. T. P. Rogers, at the time in question, was its general agent, and had authority from the association to take the application and receive the notes hereinafter mentioned. Duffie's application for membership in the association closed in words following:
I agree to accept the certificate of membership issued hereon and that the same shall not take effect until said certificate (signed by the secretary or assistant secretary) is issued and received by me during my continuance in good health. This application and the certificate issued thereon, together with the articles of incorporation and by-laws (not reducing the insurance provided) which may be hereafter adopted, shall constitute the agreement or contract between me and the said association. I certify that I have carefully read the foregoing application. [Signature of the applicant in his own handwriting] Joseph M. Duffie.
This was at the date mentioned, and at the same time the applicant executed to Rogers his promissory note for $ 17 as membership fee required to be paid when making such application, and delivered to Rogers a guarantee deposit note for $ 34 required by the articles of corporation and by-laws of defendant. For these Rogers gave Duffie a receipt in the words following:
The Bankers' Life Association of Des Moines, Iowa. I have this day taken the application of Mr. J. M. Duffie of Tama, Iowa for $ 2,000 insurance in the Bankers' Life Association, upon which he has given his guarantee note for $ 34.00 and paid in cash January 9, 1912, $ 17.00, all of which is to be returned promptly if the application is declined. The first quarterly payment on the insurance applied for will be due January 31, 1912. T. P. Rogers, Solicitor. Dated at...., June 8, 1911.
On the back of the receipt this appears:
Agents should not promise that certificate will be issued in less time than is reasonably assigned to do the work, as disappointment may result, especially as frequently occurs, an extra amount of business come in a bunch. The home office does all it can to expedite the issue and the agent can add material help if he will see that all applications are properly completed and full information given. If delay is unusual write for cause.
Rogers informed Duffie at the time that he could go to the office of Dr. Thompson within a day or two for examination, and the application would then be sent to the association and explained to him; that the notes would be returned if the applications were rejected. To this inquiry as to how soon the insurance would be in force, Rogers responded, "Upon the passage of the physical examination required by their physician." Rogers left the application with Dr. Thompson on the same day, and two days later Duffie called and was examined by that physician, who informed the applicant that he had passed a satisfactory examination and that he (the doctor) had recommended him for membership of the association.
As required by defendant's rules, the physician mailed to Dr. Will, medical director of defendant, on the same day, a slip of paper signed by him showing that he had made the medical examination of Duffie, and this reached defendant's office June 12, 1911. Rogers had been in the habit of calling at Thompson's office for the application with the examination, and the doctor left these on the desk for him, where it remained until he learned that Duffie had drowned, whereupon the physician mailed them to defendant. The medical examination disclosed that Duffie, who was thirty-two years of age, was in fine physical condition. He is conceded to have been a man of good habits, good financial ability, and of good moral character. He had done all that was required of him to obtain the insurance. The defendant was actively engaged through its agents in soliciting members of the association to whom certificates of insurance might be issued, and on an application of one Herman, procured by Rogers, June 5, 1911, defendant issued a certificate June 24th following. The defendant paid the $ 17 note out of its funds and caused it to be canceled July 28, 1911, after the association had been advised of the claim now made against it in this action, and it tendered the surrender of the guaranteed deposit note.
It is to be observed that the petition does not proceed on the theory that from the retention of the application and unreasonable time without acting thereon acceptance of the application is to be presumed, nor on the theory that defendant is estopped from denying such acceptance because of having misled the applicant in some way. See Winchell v. Iowa State Ins. Co., 103 Iowa 189, 72 N.W. 503. The action is not based on contract either express or implied, but solely on tort; the theory of the plaintiff being that, having solicited and received the application for insurance, it owed the applicant the affirmative duty either of rejecting the application or of accepting it within a reasonable time, and upon breach of such duty it is liable for all damages suffered in consequence of such breach. Let us first ascertain whether the evidence was sufficient to carry the issues involved in such a claim to the jury.
I. Might defendant have been found to have been negligent? The association was responsible for the conduct of Rogers when acting within the scope of his agency, and it is admitted that he allowed the application...
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