National Life & Acc. Ins. Co. v. Claytor, 6 Div. 26

• Decision Date: 22 June 1950
• Docket Number: 6 Div. 26
• Citation: 48 So.2d 180,254 Ala. 413
• Parties: NATIONAL LIFE & ACCIDENT INS. CO. v. CLAYTOR.
• Court: Alabama Supreme Court

Page 180

48 So.2d 180

254 Ala. 413

NATIONAL LIFE & ACCIDENT INS. CO. v. CLAYTOR.

6 Div. 26.

Supreme Court of Alabama.

June 22, 1950.

Rehearing Denied Nov. 2, 1950.

Lange, Simpson, Robinson & Somerville, of Birmingham, for appellant.

Andrew W. Griffin, of Birmingham, for appellee.

FOSTER, Justice.

The question on this appeal relates to the application of section 6, Title 28, Code of 1940. It is there provided that 'No written or oral misrepresentation, or warranty therein made, in the negotiation of a contract or policy of insurance, or in the application therefor or proof of loss thereunder, shall defeat or void the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increase the risk of loss.'

The effective date for the operation of that status was either on July 6, 1948, when the application was signed and a binder receipt given, or July 14, 1948, when the company's doctor made an examination, or August 26, 1948, when the policy of insurance was delivered. The insurance referred to is life insurance, not fire.

Part II of the application, which is the doctor's report dated July 14, 1948, in section 26 contains the following: 'I hereby agree that the proposed contract shall not be effective until the policy has been issued and the first premium actually paid and accepted by the company and the policy has been delivered to and accepted by me in my lifetime, and while in good health, except as provided in the receipt referred to in part I, Item 34 hereof.' Section 34 of part I of the application contained the following provision: 'I have deposited with the company's representative $7.11 to cover all the first quarterly premium of the policy applied for, if issued, and I hold his receipt for the same made up without alteration or erasure, on the receipt form detached from and corresponding in date and number with this application. I assent to the terms of said receipt and to the declarations and agreements in part II.' The receipt, which was then and there executed by one Lawson Corley, 'Sup't.', dated July 6, 1948, with the same serial number as that of the application, and delivered to the applicant for insurance, who afterwards became the insured in the policy issued and dated August 26, 1948, contained the following provision material to this inquiry: 'No insurance is in force on such application unless and until a policy has been issued thereon and delivered in accordance with the terms of said application, except that when such deposit is equal to the full first premium on the policy applied for and such application is approved at the home office of the company for the Class, Plan and Amount of the insurance and at the rate of the premium as so applied for, then, without affecting the issue date and anniversaries as set forth in the policy, the amount of the insurance applied for will be in force from the date of this receipt, but no obligation is assumed by the company unless and until such application is so approved.' (Italics ours.)

The policy itself dated August 26, 1948, contained the provision: 'When Policy Effective. After delivery of this policy to the insured during his lifetime and good health and payment of the first premium it becomes effective from the insurance date designated above.' The insurance date designated above is August 26, 1948. The policy also contained a provision as follows: '16. Entire Contract. This policy and the application herefor, copy of which is attached to the policy and made a part of it, constitute the entire contract.' Other features of that paragraph seem to be immaterial here. The application for the insurance and the doctor's report, to which we have referred, was made a part of the policy of insurance, but it does not appear that the receipt and binder, referred to above, was attached to and became a part of the policy contract, perhaps because it had then served its purpose.

The evidence showed that, without controversy, at the time of the delivery of the policy on August 26, 1948, the insured had a cancer of the lung, from which he died October 31, 1948. The evidence of the medical witnesses seem to agree that there was no indication of such affection on July 6, 1948, at the time when the application was made and receipt and binder given. On July 14, 1948, the applicant was examined by the company physician and no evidence of such trouble was found.

The trial court in construing that status instructed the jury in his oral charge that if they find from the evidence that at the time the insured paid one quarter in advance and received from the agent the receipt and binder that became the effective date to determine whether or not there was a misrepresentation or breach of warranty, since the conditions which make it so according to the terms of said binder had been accomplished, that is to say, that the deposit of $7.11 was the full first premium on the policy applied for and that the application was approved at the home office of the company for the class, plan and amount of insurance, and at the rate of the policy so applied for. The court thereby fixed July 6, 1948, as the controlling date to determine the applicability of section 6, Title 28, Code. The defendant excepted to that feature of the court's oral charge, which we have undertaken to set out in substance and effect, but not in terms. The defendant also requested the affirmative charge. However, it would be equally true that if the approval and acceptance of the application was induced by a misrepresentation or warranty of insured to the medical examiner on July 14, 1948, either with the actual intent to deceive or the matter misrepresented increased the risk of loss, then such date would also be one material to the inquiry.

The defendant, who is appellant here, assigns as error the ruling of the court in denying the affirmative charge, but did not assign as error that feature of the court's oral charge, to which exception was taken. There are only two assignments of error, one going to the refusal of the affirmative charge, and the other for the refusal of a motion for a new trial.

Section 75, Title 28, Code, provides that no life insurance company or any agent thereof 'shall make any contract of insurance or agreement as to policy contract other than is plainly expressed in the policy issued thereon.'

The legal capacity to execute a binder has been stated by this Court as affected by that statute. We have held that it does not prohibit such a contract of fire insurance issued by a general fire insurance agent who may make binding...