Meyer v. Central States Life Insurance Company

• Decision Date: 02 July 1919
• Docket Number: 20531
• Citation: 173 N.W. 578,103 Neb. 640
• Parties: P. H. L. MEYER, ADMINISTRATOR, APPELLEE, v. CENTRAL STATES LIFE INSURANCE COMPANY, APPELLANT
• Court: Nebraska Supreme Court

173 N.W. 578

103 Neb. 640

P. H. L. MEYER, ADMINISTRATOR, APPELLEE, v. CENTRAL STATES LIFE INSURANCE COMPANY, APPELLANT

No. 20531

Supreme Court of Nebraska

July 2, 1919

APPEAL from the district court for Platte county: GEORGE H. THOMAS JUDGE. Reversed and dismissed.

Judgment reversed and action dismissed.

A. M Post and E. M. Grossman, for appellant.

John J Sullivan and Reeder & Lightner, contra.

ROSE, J. LETTON, J., not sitting. CORNISH, J., concurring.

OPINION

ROSE, J.

This is an action to recover $ 2,000 in damages for alleged negligence of the Central States Life Insurance Company, defendant, in delaying action on an application for life insurance, in failing to notify the applicant of such delay, or of the occasion for it, and in failing to deliver a policy during his lifetime; the application having been made March 8, 1916, and the applicant having been thrown from a horse and killed April 3, 1916. In the application the estate of the applicant is designated as beneficiary. Plaintiff is the father of the decedent and is the administrator of his estate. Defendant denied negligence and pleaded that the applicant died pending a proper, but an unfinished, inquiry into his insurability. A jury was waived, and the trial court rendered a judgment in favor of plaintiff for the full amount of his claim. Defendant has appealed.

As a ground of reversal it is urged that the record contains no evidence of actionable negligence. Plaintiff relies on the following facts and conclusions: When the application was made, March 8, 1916, defendant's soliciting agent told the applicant that the insurance would be in force upon his passing a successful physical examination. The local physician employed by defendant made an examination on that date and assured the applicant that he had successfully passed it. The first year's premium was then adjusted by the giving of a note for $ 32.86. The application and the report of the physical examination were received by defendant at the home office in St. Louis, March 13, 1916. The report, owing to a defective instrument used by the examining physician, erroneously indicated an excessive blood pressure. March 15, 1916, defendant, without avail, wrote to the examining physician for a re-examination of blood pressure and repeated the request March 27, 1916. The soliciting agent was advised of the delay March 28, 1916, but notice of the facts mentioned was not given to the applicant. In the ordinary course of business the policy would have been delivered by March 22, 1916. It was in fact issued March 17, 1916, and registered by the insurance department of Missouri at Jefferson City, March 18, 1916, notwithstanding the requests for a re-examination. The applicant was in good health when examined and his blood pressure was normal. He was a young man of good character, and, from the standpoint of underwriting, he was a good financial and moral risk. Except for his death the policy issued March 17, 1916, would eventually have been delivered and the premiums would have matured annually from that date. He never received his policy. The use of the defective instrument in testing the blood pressure, the delay in passing on the application and the want of notice resulted in the applicant's failure to procure insurance. The foregoing is a brief summary of plaintiff's case. Is the evidence sufficient to sustain the judgment in favor of plaintiff?

Life insurance is a contract. The meeting of the minds of the parties is essential to the execution of a policy. Honest trustworthy underwriting requires serious inquiry into the moral character, habits, family history, financial standing and physical condition of an applicant for life insurance. Scientific knowledge and professional skill are necessary to an intelligent inquiry. The insurer in soliciting a risk and the applicant in seeking indemnity contemplate an investigation commensurate with the hazard involved. For this purpose a reasonable time is necessary. Difference in conditions may vary the time required for examination and investigation. In construing the conduct of the parties in relation to time, courts are not at liberty to fix an arbitrary...