Lyon v. Aetna Life Ins. Co.

• Decision Date: 20 October 1942
• Docket Number: 16842.
• Parties: LYON v. ETNA LIFE INS. CO.
• Court: Indiana Appellate Court

44 N.E.2d 186

112 Ind.App. 573

LYON v. ETNA LIFE INS. CO.

No. 16842.

Appellate Court of Indiana, in Banc.

October 20, 1942

[Copyrighted Material Omitted]

Connor D. Ross, of Indianapolis, Parr, Parr & Parr, of Lebanon and Daily, Daily & Daily and O. B. Hanger, all of Indianapolis, for appellant.

Barnes Hickam, Pantzer & Boyd, of Indianapolis, and Adney & Adney, of Lebanon, for appellee.

BEDWELL Judge.

By this action, the appellant, as trustee for beneficiaries under a life insurance policy, sought to recover the insurance provided for therein. The record shows the following: On December 12, 1930, Frank McKinney Hubbard made an application through Paul W. Simpson, a general agent of the appellee, Aetna Life Insurance Company, for a $20,000 ordinary life insurance policy upon the applicant's life. In the application there appeared, among others, the following questions and answers: "7. Has any payment of premium been made and binding receipt given on form 257D detached herefrom? No. What settlement has been made? None. If given, the terms of the binding receipt are hereby agreed to. If not given, it is agreed that no insurance hereon shall be effective until a policy is issued and the entire first premium has been paid during the good health of the applicant and within sixty days from the date of medical examination."

On the same day, Hubbard, at the request of Simpson, submitted to a medical examination by a medical examiner of appellee. Thereafter, the appellee issued its policy of life insurance upon the life of Hubbard in the amount of $20,000 and bearing the date of December 20, 1930. Such policy provided for an initial and annual premium of $1,350 and contained the following provisions:

"This policy shall not become effective until the first premium upon it is paid during the good health of the insured."

"All agreements made by the company are signed by its president, vice-president, secretary, assistant secretary, treasurer, or assistant treasurer. No other person can alter or waive any of the conditions of this policy, extend the time for paying a premium or make any agreement which shall be binding on the company."

After its issuance, the appellee mailed the policy to the agent, Simpson, and directed him to have another medical examination made of Hubbard and particularly with reference to his heart and to deliver the policy, if and when Simpson was completely satisfied as to the risk. After the receipt of the policy, Simpson caused Hubbard to be reexamined on December 22, 1930, by a medical examiner of appellee, who reported that he had reexamined the heart of Hubbard and had found nothing pathological.

On December 23, 1930, Simpson took the policy and a receipt for the initial premium and went to the office of Hubbard. The testimony of Simpson concerning what was said and what occurred during such visit was in substance as follows: Simpson told Hubbard that he had his policy but that he didn't know whether he should deliver it, because there was some question concerning Hubbard's health. Hubbard replied that there was nothing the matter with him and Simpson stated that he didn't think so either. Simpson then laid the jacket containing the policy on Hubbard's desk and Hubbard said: "I will check up my finances, look it over and give you a check for it after the first of the year." He took the policy and put it in the left hand top drawer of his desk. He said: "Is this in force?" Simpson replied: "It isn't, if anything should happen to you it wouldn't be worth fifteen cents." Hubbard replied: "I am not going to die anyway." That was all that was said. Hubbard had some Christmas tree decorations with which he intended to decorate a tree. He left his office and went to the Columbia Club in Indianapolis and Simpson returned to his office and gave the receipt for the initial premium to his cashier. There was no further business contact between Simpson and Hubbard. Hubbard died of heart attack on December 26, 1930, with the policy in his possession, but without having paid the initial premium. The complaint of appellant proceeds upon the theory that appellee waived the provisions of the policy heretofore quoted, which provided that the policy shall not become effective until the first premium is paid during the good health of the insured.

There was a trial by the court, which, after proper request, made a special finding of the facts and stated its conclusions of law thereon. Appellant relies for reversal upon the overruling of his motion to strike out the second and fifth paragraphs of appellee's answer, upon the overruling of his motion for a new trial, and upon claimed error in each of the conclusions of law.

So well is it established that error requiring reversal on appeal cannot be predicated upon the action of the trial court in refusing to strike out a part or all of a pleading, that it is not necessary for us to give further consideration to appellant's motion to strike out these particular paragraphs of answer. Guenther v. Jackson, 1920, 73 Ind.App. 162, 126 N.E. 873; London & Lancashire Indemnity Co. v. Community Savings & Loan Ass'n, 1936, 102 Ind.App. 665, 670, 4 N.E.2d 688; Lindley v. Sink, Adm'r, 1940, 218 Ind. 1, 6, 30 N.E. 2d 456.

Appellant's motion for a new trial contains sixty-seven separate specifications, but sixty-four thereof allege error in the admission or exclusion of evidence. The first specification in such motion is as follows: "(1) The decision of the court is contrary to law." Thereunder, by numerous points, appellant seeks to question the correctness of the conclusions of law.

The error, if any, in the conclusions of law on the facts specially found, can be presented on appeal only under exceptions to the conclusions of law and not under one of the statutory grounds of a motion for a new trial. Bundy v. McClarnon, 1888, 118 Ind. 165, 20 N.E. 718; Rooker v. Fidelity Trust Co., 1921, 191 Ind. 141, 131 N.E. 769; Boos v. Siegmund, 1910, 45 Ind.App. 284, 90 N.E. 781; Mertz v. Wallace, 1931, 93 Ind.App. 289, 169 N.E. 333; Morsches-Nowels Lumber Co. v. Pence, 1939, 106 Ind.App. 219, 18 N.E.2d 958; Minter v. Bittler, 1941, 108 Ind.App. 522, 29 N.E.2d 799.

By the second specification in his motion for a new trial, appellant presents the question of the sufficiency of the evidence to sustain the special finding of the trial court. Two paragraphs of such special finding are attacked. They are as follows:

"22. Neither defendant nor any of its officers or agents waived or purported to waive or intended to waive the conditions precedent in the policy and application that the first premium be paid before the insurance became effective."

"23. Neither defendant nor any of its officers or agents waived or intended to waive the condition precedent in the policy and application that Hubbard be in good health at the time the insurance became effective."

We will first consider the sufficiency of the evidence to sustain paragraph twenty-two of the trial court's finding. Waiver is the voluntary and intentional relinquishment of some known right. Rushville Nat'l Bank of Rushville v. State Life Ins. Co., 1936, 210 Ind. 492, 500, 502, 1 N.E.2d 445; Farmers' Ins. Ass'n v. Males, 1924, 82 Ind.App. 172, 145 N.E. 446; Commercial Union, etc., Co. v. Schumacher, 1919, 71 Ind.App. 526, 544, 119 N.E. 532, 537.

In Commercial Union, etc., Co. v. Schumacher, supra, this court defines "waiver" as follows: "A waiver is defined as an intentional relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right; an election by one to forego some advantage he might have taken or insisted upon."

A stipulation in an insurance policy, to the effect that the policy shall not become effective until the first premium is paid, may be and ordinarily is waived by the insurer by an unconditional delivery of the policy under an express or implied agreement for credit. That such credit is given is usually implied from such a delivery of the policy without requiring payment. This doctrine rests upon the presumption that in such case, a credit for the premium must have been intended by the parties upon the delivery, since it is not reasonable that they would enter into a contract which was void by its own terms. But this presumption can't be applied where the evidence discloses that it was the intention of the parties to deliver the policy conditionally for inspection or examination, or where it was their intention that the delivery should not make the policy effective and that it was not to be in force until the initial premium was paid or some other condition precedent was complied with. Kentucky Central Life & Accident Ins. Co. v. White, 1939, 106 Ind.App. 530, 19 N.E.2d 872; Penn Mutual Life Ins. Co. v. Norcross, 1904, 163 Ind. 379, 72 N.E. 132; Miller v. Brooklyn Life Ins. Co., 12 Wall 285, 20 L.Ed. 398; Massachusetts Mutual Life Ins. Co. v. National Bank of Commerce, 4 Cir., 1938, 95 F.2d 797, 118 A.L.R. 1065; Farmers' National Life Ins. Co. v. Hale, 1919, 69 Ind.App. 413, 122 N.E. 19; Russell v. Prudential Ins. Co., 1903, 176 N.Y. 178, 68 N.E. 252, 98 Am.St.Rep. 656; Christopherson v. Metropolitan Life Ins. Co., 1917, 199 Mich. 634, 165 N.W. 793; McDonald v. Provident Savings Life Assurance Society, 1900, 108 Wis. 213, 84 N.W. 154, 81 Am.St.Rep. 885.

In the case of Massachusetts Mutual Life Ins. Co. v. National Bank of Commerce, supra, the court says : "The doctrine that, nothing else appearing, delivery of the policy waives a condition requiring prepayment of premium rests upon the presumption that, in such case, a credit for the premium must have been intended by the parties upon the delivery, as it is not reasonable that they would enter into a contract void by...