Kimbro v. New York Life Ins. Co.

• Decision Date: 21 September 1906
• Citation: 108 N.W. 1025,134 Iowa 84
• Parties: KIMBRO v. NEW YORK LIFE INS. CO.
• Court: Iowa Supreme Court

134 Iowa 84

108 N.W. 1025

KIMBRO

v.NEW YORK LIFE INS. CO.

Supreme Court of Iowa.

Sept. 21, 1906.

Appeal from District Court, Linn County; J. H. Preston, Judge.

Action at law upon a policy of life insurance. Judgment for plaintiff, and defendant appeals. Affirmed.J. H. McIntosh and Smith & Smith, for appellant.

Rickel, Crocker & Tourtellot, for appellee.

WEAVER, J.

On December 10, 1903, William F. Kimbro, a resident of Cedar Rapids, Iowa, made application to the defendant for a policy of insurance upon his life in the sum of $2,000. The application was made through T. A. Haynes, local agent of the defendant at Cedar Rapids, with whom was associated in this transaction Charles E. Baker, who is styled in the record as defendant's general district agent at the same place. These agents reported their business to the defendant through its branch office located at Des Moines. The policy applied for was of a form or class known as an “Accumulation Policy.” On or about the same time Kimbro was examined by the company's physician at Cedar Rapids, who approved him as a desirable risk, and this report with the application was forwarded through the Des Moines branch to the office of the defendant in New York. Moved apparently by something suggested in the application or medical examiner's report, the home office withheld immediate action and wrote to the medical examiner asking him to make closer inquiry as to Kimbro's habits with respect to the use of intoxicants. After some delay the physician reported that at an earlier period in his life the applicant had been somewhat intemperate, but appeared to have abandoned all excess in that direction. The defendant also caused certain inspectors in its service to examine into the applicant's habits and report their findings. Finally on February 2, 1904, the officers in charge of the home office decided not to issue the policy for which application had been made, but executed another form of contract known as an “Adjustable Accumulation Policy,” insuring the life of Kimbro for $2,000, subject to the condition that, if he died within the period of 16 years, the limit of the company's liability to his beneficiary should be $1,228.44 with a return of the preiums paid on the policy. This policy executed and signed in due form was forwarded by mail to the agent, Haynes, calling his attention to the change and directing him to submit it to Kimbro with proper explanations for his acceptance, if found satisfactory. On receipt of the policy Haynes wrote to Kimbro as follows: “Cedar Rapids, Iowa, February 5, 1904. Mr. William Kimbro, City--Dear Sir: I am pleased to advise you that your policy arrived this morning. I will call, however, this pay day and deliver it to you. Kindly arrange to have the amount of your first note ready, $13.03, and oblige. Yours truly, T. A. Haynes. P. S. I was afraid for a little while, owing to a great deal of inspection being made, that you might be rejected, but am pleased to say the policy is here.”

It should be said in this connection that at the time of making his application Kimbro made and delivered to the agent his promissory notes for the first half year's premium, which by the terms of the policy was payable in quarterly installments. The first note was made payable February 18, 1904, which was the day on which Kimbro expected to draw or receive his wages for the previous month. On Monday, February 8, 1904, Kimbro again left home on his trip without seeing or having any other communication with Haynes, and on the evening of the same or following day returned sick. Soon thereafter he was taken to the hospital, where he died on February 25, 1904. The malady from which he died was diagnosed as typhoid fever. On February 22, 1904, the defendant's branch office in Des Moines, learning of the situation with respect to the risk, telegraphed Haynes to return the policy and later sent notice of Kimbro's death to the home office in New York, which replied giving directions to have Haynes mark the premium notes as canceled and return them to Kimbro's administrator. In obedience to this direction, and following the form of communication prepared and sent to him from the company's office, Haynes wrote to the widow of Kimbro, as follows: “Cedar Rapids, Iowa, March 5th, 1904. Mrs. Cecil M. Kimbro, As Administratrix of the Estate of William F. Kimbro, Deceased, No. 422 6th Avenue E. Cedar Rapids, Iowa--Dear Madam: Under date of December 16th, 1903, William F. Kimbro late of Cedar Rapids, Iowa, signed an application for insurance in the New York Life Insurance Company, and thereafter gave me, as the agent who took said application, the inclosed notes on account of the first premium. The company declined the application, and so I return herewith the notes for cancellation. Yours truly, [Signed] T. A. Haynes.” Prior to this, however, and before the death of Kimbro, this wife, the beneficiary in the policy, went to Haynes and tendered the amount of the premium and demanded a delivery of the policy, which circumstance the agent reported to the company through its cashier for Iowa by letter, as follows: “Agency at Cedar Rapids, Iowa, Feb. 24th, 1904. Mr. A. A. DeCelle, Des Moines, Iowa--Dear Sir: Re No. 2,184,615--W. F. Kimbro. This party is still in the hospital here, sick of typhoid, and last report is to the effect that he is getting along very nicely, but there are so many different complications liable to set in that one never can tell which way the tide will turn. Mr. Kimbro's wife was in yesterday and tendered me the money for his notes, but I told her that the cashier at Des Moines had requested me to return the policy to him, and that you had written to the company, and would advise me soon whether I could deliver the policy to her husband or not. She said she could not understand why I could not deliver the policy to her, as her husband had told her to pay the money to me and get the policy. I endeavored to make clear to her what kind of a policy the company had issued on her husband's life, and told her that, as soon as I heard again from you, I would call and see her. I sincerely trust that Mr. Kimbro will get well, and that no complications will arise in connection with this policy, as it would certainly cause trouble if the insured should die and the company should not pay the claim, inasmuch as notes were given in full settlement of the first year's premium. The insuring public thoroughly understands that a New York Life policy in incontestable from date of issue, and I advised him when the policy arrived. Yours truly, T. A. Haynes.”

There is some question raised in argument as to the fact and sufficiency of this tender; but if a tender was essential to plaintiff's right of recovery, which we do not decide, the evidence is clearly sufficient to sustain the judgment of the trial court in this respect. The company denying that an insurance had ever been effected upon Kimbro's life, and refusing to adjust or pay the loss occasioned by his death, this action at law was instituted on May 19, 1904. By the first count of her petition plaintiff declares upon a contract or agreement of insurance upon the life of Cecil M. Kimbro for the sum of $2,000, on the terms and plan usually embodied in the company's so-called accumulation policy. By another count of the petition the issuance of an adjustable accumulation policy is alleged, and that the delivery and acceptance thereof by Kimbro was prevented by the fraud of the company's agents and asks to recover upon said policy as if it had been in fact delivered. By a third count, the plaintiff seeks to recover damages on account of the alleged fraud of the defendant's agents in depriving her of the insurance which otherwise would have been hers. As the last two grounds of recovery seem not to have been recognized or sustained by the trial court, and plaintiff has not appealed, we shall not again refer to them. The defendant answers in denial. It also avers that the notes given by Kimbro for the premium upon the policy applied for by him were the property of the agent Haynes, and not of the company. It further alleges that the application made by Kimbro was disapproved, and no policy ever issued thereon, but another and different policy was prepared and sent to Haynes with authority to deliver it only on condition that said applicant sign and deliver to said agent a written request for such substitution in the following form:

“New York Life Insurance Company, 346 Broadway, New York City. I hereby request, as an amendment to my application, dated the 16th day of Dec. 1903, that the insurance under any policy issued thereon shall take effect as of the 2d day of Feby. 1904, instead of on the date of said application, as provided herein, and I agree that the insurance year, the accumulation period and the loan and nonforfeiture provisions of said policy shall all relate back to the date on which the insurance takes effect. Witness ______. Forwarded from Iowa Branch Office, ______, 190--. ______, Cashier.

Exhibit H. Name ______ Kimbro ______. No. 2,184,615. Division of Policy Issues: New York Life Insurance Company, 346 & 348 Broadway, New York. The New York Life Insurance Company will please accept the following answers in lieu of the answers to the corresponding questions in my application for insurance dated the 16th day of Dec. 1903. Question No. ______. I desire a policy on the ordinary life adjustable accumulation policy plan, as set forth in the policy form of the company (with terminating options only), and I select the 20 year accumulation period. Question No. ______. a No.______ b (Should) remains unanswered. And I hereby agree that the above answers shall form a part of my said application for insurance, and I hereby renew and confirm my agreement therein. Dated ______, 190--. Witness: ______, Applicant.”

This instruction, it is alleged, was never carried out by the agent, nor did Kimbro ever...