Lierheimer v. Minnesota Mutual Life Insurance Co.

• Decision Date: 22 January 1907
• Parties: LIERHEIMER, Appellant, v. MINNESOTA MUTUAL LIFE INSURANCE COMPANY, Respondent
• Court: Missouri Court of Appeals

99 S.W. 525

122 Mo.App. 374

LIERHEIMER, Appellant, v. MINNESOTA MUTUAL LIFE INSURANCE COMPANY, Respondent

Court of Appeals of Missouri, St. Louis

January 22, 1907

Appeal from Audrain Circuit Court.--Hon. James D. Barnett, Judge.

AFFIRMED.

STATEMENT.--Plaintiff is a farmer, residing in Audrain county, Missouri. Defendant is a Minnesota corporation, having its home office in St Paul, in said State, and in 1904 was authorized to do a life insurance business in Missouri. In August of said year, two of its agents, John H. Jones and Jerry Gelvin, canvassed plaintiff for life insurance and induced him to sign an application for what is termed "Twenty Payment Life Twenty Year Distribution Policy" for five thousand dollars, for the benefit of plaintiff's wife. The annual premium on the policy was $ 144.65, and the agents induced plaintiff to execute his note for that amount to John H Jones, to mature January 1, 1905. The note was negotiated by Jones and paid to the holder by plaintiff at maturity. The action is to recover the amount of the note.

The petition alleges, in substance, that the note was procured by the false and fraudulent representations of defendant's soliciting agents, in respect to the contract of insurance and the stipulations they represented the policy would contain. As a special defense, the answer alleges the policy was delivered to plaintiff on September 21, 1904; that he received and accepted it and kept and retained it in his possession without complaint, for an unreasonable time to-wit, twenty-eight days, and by reason of its retention for an unreasonable time, without objection, the policy became binding on both parties.

At the time plaintiff executed the note, Jones gave him a receipt showing payment by note of the first premium on his policy to be issued. Accompanying the policy was a special contract, which was delivered with the policy, the contents of which it is unnecessary to notice in this opinion. There is some evidence tending to show the policy did not contain all the terms and stipulations defendant's agents represented it would, and that it was materially different from the policy the agents sold plaintiff. The policy and special contract were mailed to plaintiff from St. Paul by registered letter. According to the receipt for the letter, it was delivered to plaintiff on September 21, 1904, but according to his evidence and that of the carrier who delivered it, it was delivered two days later, September twenty-third. Plaintiff testified the letter was delivered at his home about 2 p. m., and that he immediately opened it and read the policy and special contract and discovered they were not what he had contracted for. On this feature of the case, the following appears from plaintiff's cross-examination:

"Q. And you say that when you read the policy and special contract you made up your mind it wasn't what you bargained for? A. Yes, sir.

"Q. Have you the luxury of a wife? A. I have.

"Q. Did you talk it over with her? A. Yes, sir.

"Q. And you all discussed it that afternoon? A. We did.

"Q. And that night? A. I don't remember about the night.

"Q. Well, you read it over carefully? A. Yes, sir.

"Q. Studied it out? A. I did.

"Q. And made up your mind it wasn't what you bargained for? A. Yes, sir.

"Q. Well, what did you do with the policy and this special contract when you say that you finished studying it out and made up your conclusion that it wasn't what you bargained for? A. Well, sir; I laid it aside, and the first day I went to town I took it to Mr. Whitson to examine it for me.

"Q. When was the first day you went to town after that; you say you received it on September 23, 1904. A. Yes, sir.

"Q. When was it you went to the city here to see Brother Whitson? A. Why, it was about the middle of October.

"Q. About the middle of October? A. Yes, sir.

"Q. And you and he looked it over on that visit and on that day that you came to Mexico? A. Yes, sir."

In answer to questions witness stated: Q. "It was not on October nineteenth I came to Mexico. It was about the middle of October, I can't remember the exact date. It wasn't earlier than the fifteenth. When I got through reading the policy, I laid it aside where I thought it would be safe."

"Q. Didn't you ever get it out and read it any of those interesting days between that time and your visit to Brother Whitson's here? A. Why, of course I did.

"Q. You got home at night I suppose and would light a lamp and sit down and read it over and over again? A. No, I wouldn't do that."

In answer to questions witness stated: "I don't remember the times I read it, I read it a good many times. The more I read it, the more I knew it wasn't what I bargained for. I have told all I did in regard to this policy before going to see Mr. Whitson in the middle of October."

"Q. Did you know how to read and write? A. Why of course I did.

"Q. And figure? A. Certainly.

"Q. You have gone to school? A. I have.

"Q. A good bright, intelligent man, ain't you; I mean intellectually, not morally, all of us I am sorry to say are a little weak there, but you have your senses and good understanding, have you not, Mr. Lierheimer? A. I think I have.

"Q. And how old a man are you? A. Twenty-five years of age.

"Q. And your business is that of farmer? A. Yes, sir."

On October 19, 1904, A. C. Whitson, plaintiff's attorney, wrote J. L. Brininstool, defendant's manager for the St. Louis and Eastern Missouri district, informing him the policy and special contract were not as Jones represented to plaintiff they would be, and that plaintiff refused to accept the policy and demanded a return of his note or the payment of the amount thereof, and informed Brininstool the policy was in his (Whitson's) hands to be sent wherever Brininstool should direct. On the twenty-first of the same month, Brininstool acknowledged the receipt of this letter, and stated he would write Jones regarding his (Whitson's) letter and communicate with him as soon as he heard from Jones. Other correspondence took place between Whitson and Brininstool, in respect to the matter, and Brininstool visited plaintiff and made an unsuccessful effort to induce him to change his mind and keep the policy. On November 14, 1904, the policy and special contract were forwarded to Brininstool by registered letter. He refused to receive the letter and it was returned to Whitson at Mexico, Missouri. Whitson, on the thirtieth of the same month, forwarded the policy and special contract by registered letter, to defendant's home office at St. Paul and received a receipt showing the letter was delivered. Nothing more has been heard of the policy.

At the close of the evidence the court, at the request of defendant, instructed the jury that plaintiff could not recover, and under the instruction the jury returned a verdict for defendant.

Judgment affirmed.

A. C. Whitson for appellant.

(1) A party who is induced to take out a policy of insurance by fraudulent representations of the company's agent may rescind the contract and recover back the premium paid or he may retain the policy and have damages for the deceit. Hedden v. Griffin, 136 Mass. 226; Morris v. Hutchkins, 102 Mass. 439. It is also held that he need not return the policy as notice of rejection terminated the obligation of the company and there was nothing to return. Paquin v. Milliken, 163 Mo. 79; Brochus v. Achilling, 52 Mo.App. 81; Liecher v. Keney, 72 S.W. 145; Cotrill v. Krum, 100 Mo. 397; Ins. Co. v. Owens, 81 Mo.App. 201; Van Ravensway v. Ins. Co., 89 Mo.App. 73. (2) The question of reasonableness of time in giving notice of the rejection of a policy of insurance, as not being the one contracted for, is a question of fact for the jury. This is true even where there is no dispute as to the evidentiary facts. It being impossible to lay down a fixed rule on the subject, the question is to be decided from all the facts and circumstances in the case. McCarthy v. Ins. Co. (Minn.), 77 N.W. 426; Norton v. Gleason, 61 Vt. 474, 18 A. 45; Anderson v. Hensler, 6 Wall. 254; McLanahan v. Ins. Co., 26 U.S. 170; Rider v. Wright, 10 La. Ann. 127; Ins. Co. v. Maverick (Tex. App.), 78 S.W. 561; Pennypacker v. Ins. Co., 45 N.W. 408; 16 Am. and Eng. Ency. of Law (2 Ed.), p. 877; Beach on Contracts, sec. 821. (3) Question of reasonable time for rejection has never been decided as a question of law in this State. Ins. Co. v. Nieberger, 74 Mo. 169; McHoney v. Ins. Co., 52 Mo.App. 94; Clem v. Ins. Co., 29 Mo.App. 674; Steinberg v. Ins. Co., 49 Mo.App. 265. Where the question of reasonable time has been decided as a matter of fact by appellate courts, thirty to sixty days retention of policy has been held not unreasonable. Jones v. Gilbert, 93 Ga. 604, 20 S.E. 48.

Barclay, Shields & Fauntleroy and George Robertson for respondent.

(1) It was the duty of insured to read his policy immediately upon its receipt (in fact, that is what he did, and at that time found out it was not what he had bargained for). Steinberg v. Ins. Co., 49 Mo.App. 265; Neiberger v. Ins. Co., 74 Mo. 167; Bostwick v. Ins. Co., 116 Wis. 392. (2) It was the duty of Lierheimer to "rescind . . . promptly on the discovery of the fraud." Clough v. Holden, 115 Mo. 359; Estes v. Reynold, 75 Mo. 565. "This rule seems to be that the right to rescind must be exercised promptly." Melton v. Smith, 65 Mo. 324; Robinson v. Siple, 129 Mo. 221; Hart v Hamlin, 43 Mo. 174. "When the facts are clear, it (what is a reasonable time) is always a question exclusively for the court." Wiggins v. Burkham, 10 Wall. 132; Toland v. Sprague, 12 Peters 336; Schwarzkopf v. Ins. Co., 84 S.W. 353; Hart v. Handlin, 43 Mo. 175; La Force v. Ins. Co., 43 Mo.App. 520; Trask v. Ins. Co., 29 Pa. St. 198 (11 days' delay fatal); Greene v. Ins. Co.,...