Mutual Life Insurance Company v. Summers

• Decision Date: 05 January 1912
• Docket Number: 619
• Citation: 19 Wyo. 441,120 P. 185
• Parties: MUTUAL LIFE INSURANCE COMPANY v. SUMMERS
• Court: Wyoming Supreme Court

120 P. 185

19 Wyo. 441

MUTUAL LIFE INSURANCE COMPANY v. SUMMERS

No. 619

Supreme Court of Wyoming

January 5, 1912

ERROR to the District Court, Carbon County; HON. DAVID H. CRAIG Judge.

The material facts are stated in the opinion.

Affirmed.

T. S Taliaferro, Herbert V. Lacey and John W. Lacey, for plaintiff in error.

The answer raised the bar of the statute of limitations, viz five years, and alleged that the plaintiff and his assignors each made a written application for a policy and life insurance, designating therein the kind and character of policy applied for, and that the company delivered to each applicant a policy in exact accordance with the written application, and that the payments made by plaintiff and his assignors were made as premiums upon said policies. The plaintiff in his reply denied the bar of the statute of limitations, but did not intimate that any fraud or artifice had been practiced upon the plaintiff or either of his assignors in relation to the written applications, or in relation to the delivery and receipt of the policies. The sole issue as to these matters is made up of the allegations of the defendant company that such written applications were made and the policies delivered, and the denial of these facts by the plaintiff.

The plaintiff seeks to recover on the ground that the policies issued to him and to each of his assignors did not conform to the agreement. The plaintiff did not introduce the policy that was issued to him, nor in any way show its contents. The last seen of that policy was when it was in his own hands and in the hands of his attorney. Although the plaintiff attempted to state that the policy did not conform to his understanding of the agreement, that was a mere conclusion and not the best evidence, and it was excluded. There was, therefore, no evidence whatever to establish the claim that his policy did not conform to the contract, whether that contract be the alleged parol contract, or whether it was the contract set forth in the written application. Upon the cause of action based upon the plaintiff's own contract there was, therefore, no basis for a recovery. If all the facts alleged in the petition were true, the policies were delivered and were not void, but voidable only. Each policy holder was in such position with reference to his policy that it remained in full force from the time he received it. No one of the plaintiff's assignors repudiated his policy. During the entire period for which the premium was paid the policy was kept alive, and that period had passed before any action whatever was taken by any of the policy holders.

It is not pretended that the contract of the written application and the policy issued thereon was in any case rescinded by the insured. The final writings between the parties became the conclusive evidence of the terms of the agreement. It is immaterial whether the contract was a parol agreement to issue a policy or whether it was made up by the written application and the policy. In either event the policy was delivered. To rescind a contract one must return whatever he received, even though the contract was consummated through fraud. (Provision Co. v. Jones Bros., (Miss.) 39 So. 521; Implement Co. v. Bank, (Kan.) 57 P. 1050; Doane v. Lockwood, 115 Ill. 490; Frink v. Thomas, 20 Ore. 265; Wilcox v. Fruit Co., 113. Ala. 519; Schwartz v. McCloskey, 156 Pa. St. 258; Thompson v. Peck, 115 Ind. 512; Farwell v. Hanchett, (Ill.) 9 N.E. 58; Westhafer v. Patterson, (Ind.) 22 N.E. 414; Miller v. Steem, 30 Cal. 402; Weed v. Page, 7 Wis. 503; Kimball v. Cunningham, 4 Mass. 502; Gibson v. Lancaster, 90 Tex. 540.) This principle applies whether the thing purchased is life insurance or any other character of property. And in order to rescind the party must move promptly. (Bostwick v. Ins. Co., (Wis.) 89 N.W. 538; Fennell v. Zimmerman, (Va.) 31 S.E. 22; Nat'l L. & T. Co. v. Omans, (Mich.) 100 N.W. 595; King v. Mayes, 58 S.W. 573; Leigh v. Brown, (Ga.) 25 S.E. 621; Shedden v. Heard, 110 Ga. 461, 113 Ga. 162; Johnson v. White, (Ga.) 48 S.E. 426.)

The instructions requested should have been given. In each of the cases of plaintiff's assignors there was a written application for a policy. A policy was received, and was never returned. There was no rescission, and yet the action is for money had and received, and necessarily is based upon a rescission of the contract. Moreover, there could have been no rescission of the policy without the consent of the wife of the insured, who was made the beneficiary. (Jurgens v. Life Ins. Co., 114 Cal. 161.) An instructed verdict for the defendant company as to each cause of action should have been given as requested.

J. H. Ryckman, for defendant in error.

The whole matter of rescission has been completely settled by this court. (Summers v. Ins. Co., 12 Wyo. 369.) Where a life insurance company delivers a contract different from the one contracted for, the applicant may refuse to accept it and sue to recover the premium paid. (Id. and cases cited.) It is wholly immaterial in this case what became of the policies that were issued if they did not conform to the preliminary oral agreement. The policies must not only have been received but they must have been accepted, and not one of the policies which this company delivered was accepted, because not one of them conformed to the preliminary oral agreement in material matters. The plaintiff, and at least two of his assignors, returned their policies, and notified the company that the one sent was not such a policy as the agreement called for. The other assignors knew that the company had refused to keep the policies when returned and thought it a waste of time to try to induce the company to do for them what it had refused to do for the others. Under the issues and facts of this case the retention of the policies, if any of them were retained, is immaterial. (LaMarche v. Ins. Co., 126 Cal. 498; Maxson v. Llewelyn, 122 Cal. 195; McKay v. Ins. Co., 124 Cal. 270; Urwan v. Ins. Co., 125 Wis. 349.) There never was a contract consented to by both parties, and the premium was therefore recoverable, notwithstanding that the policies may have been retained. (Ins. Co. v. Gorman, (Ky.) 40 S.W. 571; Hedden v. Griffin, 136 Mass. 229; Ins. Co. v. Crane, 134 Mass. 56; Ins. Co. v. Pyle, 44 O. St. 19; Waller v. Assur. Co., 64 Ia. 101; Hornickell v. Ins. Co., 111 N.Y. 390; Randlet v. Herren, 20 N.H. 102; Carter v. Carter, 14 Pick. 424; Palmer v. Ins. Co., 54 Conn. 488; Dickerson v. Colegrove, 100 U.S. 578; Strohn v. Ry. Co., 21 Wis. 562; McElroy v. Assur. Co., 94 F. 990.) On the point so much insisted upon by counsel for the company that the parol agreements were merged in the written applications and that the applicants should have read those applications, much authority can be cited to the effect that the question whether the agreements were so merged was properly left to the jury, and was not one of law, but one of fact. (Miller v. Ins. Co., 107 N.Y. 296; Ins. Co. v. Wilkinson, 13 Wall. 222; Kistner v. Ins. Co., 128 Pa. St. 553; Eilenberger v. Ins. Co., 89 Pa. St. 464; McArthur v. Ins. Co., 73 Ia. 336.) The company was bound by the fraud of its agents. (Menk v. Ins. Co., 76 Cal. 50; Bennett v. Ins. Co., 106 N.Y. 243; Wilson v. Ins. Co., 36 Minn. 112; Helm v. Ins. Co., 61 Pa. St. 107; Ins. Co. v. Pearce, 39 Kan. 396; Ins. Co. v. Hick, 125 Ill. 361; Barnes v. Ins. Co., 75 Ia. 11.) It may be shown by parol evidence that the execution of an instrument was procured by fraud or duress. (Underhill's Ev., Sec. 208; 2 Jones on Ev., Sec. 440.) The question as to the intention of the parties is one of fact to be submitted to the jury. (Hoyt v. Ins. Co., 98 Mass. 539; Markey v. Ins. Co., 103 Mass. 78; Rogers v. Ins. Co., 41 Conn. 97; 118 Mass. 178; 125 Mass. 158; Johnson v. Ins. Co., 107 Am. St. 129, note.) The policies were the contracts. The applications were no part of them, and are only referred to in the policy by the statement that no person has power to bind the company by making any promise or accept any application not contained in the application "for this contract." This limitation speaks only from the time the policy is received and accepted. (Baker v. Ins. Co., 70 Mich. 199; Jones v. Ins. Co., 90 Tenn. 604.) If a person is induced by false representations to take out a policy of insurance, he can avoid it and recover the premiums paid. (Malhoit v. Ins. Co., 87 Me. 374; Ins. Co. v. Reed, 13 L. R. A. 352; O'Brien v. Home &c. Soc., 22 N.E. 954.) And such an action may be maintained whenever the defendant has money belonging to the plaintiff which in equity and good conscience it ought to refund. (McDonald v. Ins. Co., 68 N.H. 4; Bank v. Barnes, 18 Mont. 335.)

SCOTT, JUSTICE. POTTER, J., and MATSON, District Judge, concur. BEARD, C. J., having announced his disqualification to sit in this case, HON. RODERICK N. MATSON, Judge of the District Court of the First District, was called in to sit in his stead.

OPINION

SCOTT, JUSTICE.

The defendant in error was plaintiff below and for convenience will hereinafter be referred to as the plaintiff brought this action against the plaintiff in error, defendant there, and which will hereinafter be referred to as the defendant, to recover the proceeds of a negotiable instrument given by him as the first year's premium upon an alleged contract for an insurance policy which was to contain certain favorable conditions, which policy it is alleged was never delivered. Plaintiff also alleged that L. V. Shurtleff, George P. Harvey, Robert B. Harvey, John A. Gordon, Peter H. Nelson and George Finch assigned their claims of like character to him. It is alleged in each cause of action except as to Nelson and Gordon, who paid cash, that a negotiable note or...