Heiman v. Phoenix Mut. Life Ins. Co.

• Decision Date: 01 January 1872
• Citation: 17 Minn. 127
• Parties: THERESIA HEIMAN v. PHOENIX MUT. LIFE INS. CO.
• Court: Minnesota Supreme Court

Page 127

17 Minn. 127

THERESIA HEIMAN

v. PHOENIX MUT. LIFE INS. CO.

Supreme Court of Minnesota.

Appeal by plaintiff from an order of the court of common pleas, Ramsey county, denying a new trial.

Lorenzo Allis, for appellant.

Bigelow & Clark, for respondent.

BERRY, J.

By the pleadings and otherwise, it is admitted in this case that the defendant is a life insurance company, duly incorporated under the laws of Connecticut, and authorized to transact business in this state; that on or about July 15, 1869, at St. Paul, an application was made to defendant through its duly-authorized agent by Hirch Heiman for an insurance upon his life for the benefit of the plaintiff, his wife; that defendant made out a policy of insurance upon such application, and transmitted the same to its agent in Minnesota, by whom it was received on or about the third day of August, 1869.

Plaintiff introduced testimony tending to show that about August 10th Hirch Heiman went out of the state, (of which he was a resident,) upon a temporary absence, leaving his minor son Isidor Heiman in charge of the business which he, (the said Hirch,) followed, to-wit, that of a clothier; that on or about August 25th, and about 15 days after the said Hirch had departed from this state as aforesaid, one Thompson who had received the policy from Van Duzen, (defendant's general agent in Minnesota,) came to the store in which Isidor was conducting his father's said business, and informed said Isidor that he had the policy before mentioned, at the same time exhibiting it to said Isidor, (who read it,) and informing him that the first annual premium, about $100, was to be paid in cash, and a note to be executed for about the same sum; that Isidor told Thompson that he could not pay him any money, but would sign the note; that at said Thompson's request he signed the note for and in the name of his father; that Thompson took the note and put it with the policy in an envelope; that said Isidor then asked said Thompson for the policy, but that Thompson said he would keep it till said Hirch Heiman got home, and would wait for the money, and keep the policy good until then; that said Thompson did not deliver the policy to said Isidor; that said Isidor informed said Thompson that he expected his father home in a few days; that the note has never been returned.

It was admitted that the note signed by said Isidor as aforesaid was of the tenor following, with the blanks filled up. "Hartford, ______. Twelve months after date, for value received, I promise to pay the Phœnix Mutual Life Insurance Company, or order, ______ dollars, with interest payable annually in advance at 6 per cent., it being for part premium due and payable on policy No. ___ of said company on the life of ______, dated ______, which policy, and all payments or profits which may become due thereon, are hereby pledged and hypothecated to said company for the payment of the note."

Said Isidor, witness for plaintiff, testified on cross-examination as follows: "Mr. Thompson asked me for the money. He said there was so much to be paid. He asked if I could pay it. I said I was pretty short; but that my father would be home soon. He did not urge me to pay it; * * * did not tell me that it was necessary to pay the premium." Josiah Thompson, a witness called by plaintiff, testified that he received the policy from Van Duzen, (the defendant's general agent in the state,) "to deliver and collect the premium on it the same as on other policies; that he had no special instructions in this case; that his instructions in every case were that the policy was not to be delivered till he received the premium."

It further appears that said Hirch Heiman never returned home after his aforesaid departure from the state; that he died on the ninth day of September, 1869; and it was admitted that proper proofs of his death had been duly served upon defendant. The plaintiff, having introduced some other evidence not important in considering the questions presented upon the appeal, rested her case. Thereupon defendant moved to dismiss upon the ground that plaintiff had "failed to establish a cause of action." The motion having been granted, plaintiff made a motion for a new trial, and from the order denying the latter motion she appeals to this court.

Plaintiff argues that the dismissal was erroneous — First, because, even admitting that the policy was never delivered, there was evidence in the case tending to prove a contract of insurance, upon which evidence the jury should have been allowed to pass.

This position has reference to the evidence that an application for insurance had been duly made, and a policy based thereupon had been signed and sealed by the defendant and forwarded to an agent, whose duty it was to receive the premium and deliver the policy to the insured.

Plaintiff contends that, upon this evidence, it was for the jury to determine whether the application had been accepted by the defendant, arguing that, if it had been accepted, the contract of insurance existed, although the policy, the formal instrument evidencing the contract, had not been delivered. But as, independent of the policy, there is nothing in the case tending to show any acceptance of the application, or any agreement to insure, the presumption is that, while there were negotiations, there was "no contract, and no purpose to contract, otherwise than by a policy made and delivered upon simultaneous payment of premium." Markey v. Mut. Ben. Ins. Co. 103 Mass. 92. See, also, St. Louis Mut Ins. Co. v. Kennedy, 6 Bush, 450.

The application for insurance is a mere proposal on the part of the applicant. When the insurer signifies his acceptance of it to the proposer, (and not before,) the minds of the parties meet and the contract is made. Taylor v. Merch. F. Ins. Co. 9 How. 390; Flanders, Ins. 109. This acceptance must be signified by some act — a simple mental acceptance, a mere thought, amounting to nothing.

Now, the acts of the defendant relied on by the plaintiff as showing an acceptance of her proposal, are the making of the policy, and the forwarding of the same to an agent, whose duty it was to receive the premium and deliver the policy to the insured; to which may, in this case, be added the presentation of the policy to plaintiff's alleged agent. But while these acts were indicative of an acceptance of plaintiff's application, they were, under the presumption above mentioned, evidence of an acceptance only as the basis of a contract to be entered into by a policy, which was to be made and delivered, so as to become operative as a contract, only upon the simultaneous payment of the premium. In other words, these acts on defendant's part were evidence, not of a contract to insure, but of a willingness to enter into such contract upon performance (i. e., upon payment of the premium) by the other party.

It may further be added, in reply to a portion of the counsel's reasoning, that the application, being a mere proposal, "cannot be converted into a contract by delay on the part of the company," or its agent, in rejecting or accepting it. Flanders, Ins. 109; Ins. Co. v. Johnson, 23 Pa. St. 72.

So far, then, as the first position taken by plaintiff's counsel is concerned, the dismissal of the action was not erroneous.

In the second place, the plaintiff insists that the dismissal was wrong, because there was evidence in the case tending to prove a delivery of the policy.

It is not claimed that the exhibition of the policy to Isidor Heiman, or his temporary possession of the same while reading it, amount to a delivery. The policy was evidently handed to him for inspection simply, and not with the design of vesting its legal possession in him or in any person through him. Markey v. Mut. Ben. Ins. Co. supra, 89. A delivery may "either be actual, that is, by doing something and saying nothing, or verbal,...