Harding v. Metropolitan Life Ins. Co.

• Decision Date: 24 April 1939
• Docket Number: 17089
• Citation: 188 So. 177
• Court: Court of Appeal of Louisiana — District of US
• Parties: HARDING v. METROPOLITAN LIFE INS. CO.

188 So. 177

HARDING v. METROPOLITAN LIFE INS. CO.

No. 17089

Court of Appeal of Louisiana, Orleans.

April 24, 1939

Rehearing Denied May 22, 1939

Writ of Certiorari Denied June 26, 1939

Appeal from Civil District Court, Parish of Orleans; Harold A Moise, Judge.

Action by Ellen Harding against the Metropolitan Life Insurance Company on a life insurance policy. Judgment for plaintiff and defendant appeals.

Amended and affirmed as amended.

Spencer, Phelps, Dunbar & Marks, of New Orleans (Wood Brown, of New Orleans, of counsel), for appellant.

Cabral & Graham, of New Orleans (Harry Cabral, of New Orleans, of counsel), for appellee.

JANVIER, Judge.

Ellen Harding sues as beneficiary on a life insurance policy in the sum of $1,000, which she alleges was issued by defendant, Metropolitan Life Insurance Company, on the life of Wesley Johnson, but which policy, she avers, remained in the possession of the said company and was never delivered. Johnson died on May 18, 1929, and plaintiff alleges that, for no valid reason, payment under the policy has been refused.

Defendant company denies that any such insurance contract came into existence, though it admits that application for a policy in the sum of $1,000 was made and that payments totaling $14.11 on account of the first premium were collected and retained by its soliciting agent, Weston, who secured the application for the policy. Defendant contends that no contract came into existence for the reason that it was unwilling to issue the policy in the " intermediate" form applied for because of the occupation of the applicant and that it therefore rejected the said application. It admits that it prepared another policy, known as a " special class" policy, in the same amount, but requiring a slightly higher premium, and it admits that it sent this policy to its agent, Weston, with instructions to him to prevail upon the applicant to execute an amended application requesting a " special class" policy and to secure from the said applicant the amount due as the first premium on the policy tendered and to then deliver to the applicant the said " special class" policy. But it avers that the said policy was never accepted by the said applicant and that he did not make application for a policy in that form.

Plaintiff maintains that Johnson was never notified of the company's rejection of his application for an " intermediate" policy and was never tendered the " special class" policy which the company was willing to issue and she contends that, in the absence of such notification, Johnson was under the impression that his application had been approved and that a policy in accordance with his application would be forthcoming. Plaintiff also contends that the policy which the company was willing to issue and which it called a " special class" policy complied substantially with the application, and that it was so similar to what would have been issued had the application been granted that it is, in effect, the policy which was requested.

Defendant denies this and maintains further that, even if the policy prepared could be considered as the policy applied for, still no contract came into existence because the first premium has never been paid, and it points to a stipulation in the application and to another in the policy, which provide that in no event shall the policy become effective until the first premium has been paid. This stipulation in the application reads as follows:

" It is understood and agreed ***.

" 4. That the Company shall incur no liability under this application until *** the full first premium stipulated in the policy has actually been paid to and accepted by the company during the lifetime of the Applicant ***."

A similar stipulation, as it appears in the policy, reads as follows:

" This policy shall not take effect unless or until the first premium therefor, as entered on the foregoing receipt, has actually been paid in cash."

But plaintiff counters with the argument that the full first premium has been paid and calls to attention receipts showing payment of $15.61, admittedly more than sufficient to cover the first premium, whether on the policy applied for and rejected, or on the policy which the company was willing to issue.

The insurer admits that its agent received, in connection with the application, total payments of $14.11, but it denies that an additional amount of $1.50 was received, and brands as a forgery the signature on the receipt purporting to evidence that payment, and it takes the position that if that sum, $1.50, be deducted from the amount claimed to have been paid, there will remain only $14.11 as the amount paid on account of the first premium, whereas $15.26 is shown to be the amount required as first premium on the " special class" policy which defendant was willing to issue, and it contends, therefore, that it cannot be said that the first premium has been paid, as is required by the application and by the policy, and that, therefore, since payment of the first premium was made a condition prerequisite to the attaching of the coverage of the policy, the said coverage has never been affected.

Finally, the company contends that in any event it is not liable, for the reason that the Wesley Johnson who died and on whose death the claim is based is not the person who presented himself for medical examination in connection with the application; in other words that, when the medical examination was made, there was substituted for the elderly Wesley Johnson, who was in ill health, a younger and a healthier person, and that the said Johnson would have been rejected had he been presented to the medical examiner.

In the court below there was judgment for plaintiff as prayed for. Defendant has appealed.

We shall first approach the disputed questions of fact.

Was there a fraudulent substitution at the medical examination? Of course, if there was such substitution, the matter must end there, for there can be no recovery where the issuance of a policy of life insurance is induced by such fraud. Hill v. Southern Life & Health Insurance Co., La.App. 147 So. 121; West v. Life & Casualty Insurance Co. of Tenn., 19 La.App. 249, 140 So. 104.The applicant, on February 12, 1929, declared himself to be 48 years of age and the person examined, as stated in defendant's brief, was " in good health, with a sound heart" . Yet it appears that the person who died on May 18, 1929, just about three months later, was a rather elderly man, with heart trouble of a very severe character.

The evidence produced by defendant shows that in 1929 Wesley Johnson was a rather aged man and was in failing health and that at no time had he ever worked as a stevedore. The children of the said Johnson placed his age at 78 and one of these children testified, at the time of the trial, that he himself was 49 or 50 years of age. This, of course, would have made it impossible that his father was only 48 years of age at the time he made application for the policy.

The defendant also produced the testimony of a Mr. G.S. Davidson, of St. Francisville, who stated that he had known Wesley Johnson when he lived in St. Francisville in 1924 and that the person he knew could not have been younger than 86 or 90 years old at the time of his death. In contradiction of this testimony, however, plaintiff shows that, not only was Wesley Johnson examined when this application was made, but that he had been examined by the company's physician in connection with the issuance of a previous policy, over which no question had been made, and, in addition to this, several witnesses testified that they were present when the medical examiner presented himself to examine Johnson and that the man examined was the same Johnson who later died.

The evidence produced by defendant tends to cast suspicion on the question of whether or not the Johnson who died is the same person who presented himself for medical examination, but, in view of the finding of our brother below, we are unable to state that there was a substitution. Only a question of fact is involved here and the finding of the district court is not manifestly erroneous.

We next consider the disputed receipt for $1.50. If the signature on this receipt is a forgery, then the amount actually paid was $14.11, whereas, if this receipt is genuine, then the amount was $15.61-admittedly sufficient to cover the cost of the premium on either policy.

We find in the record the testimony of two handwriting experts-one produced by plaintiff, the other by defendant. There is one rather suspicious circumstance in connection with the production of this receipt and that is that, when plaintiff, in an effort to show that the first premium had been paid, presented the receipts at the office of the defendant company, she did not present this particular receipt for $1.50. She was told that the other receipts totaled only $14.11 and that the first premium amounted to $15.26. Obviously there was, according to these figures, a deficiency of $1.15. Quite a long time later she again appeared at the office with the additional receipt for $1.50. This additional receipt shows an overpayment of 35 cents and we cannot understand why, under any set of circumstances, such an amount would have been paid. It is possible that the plaintiff may have misunderstood the statement that an additional $1.15 would be necessary and understood that $1.50 would be required and that she thereupon fraudulently prepared the receipt for $1.50. But this is only a suspicious circumstance and is not sufficient, we think, to overcome the testimony that the amount was actually paid to the agent and that the receipt was executed by him. Had our brother of the district court reached a...