Neely v. Pigford

• Citation: 181 Miss. 306,178 So. 913
• Decision Date: 21 February 1938
• Docket Number: 33022
• Court: United States State Supreme Court of Mississippi
• Parties: NEELY v. PIGFORD

178 So. 913

181 Miss. 306

NEELY v. PIGFORD

No. 33022

Supreme Court of Mississippi

February 21, 1938

Division B

Suggestion Of Error Overruled April 4, 1938.

APPEAL from the circuit court of Monroe county HON. THOS. H JOHNSON, Judge.

Suit by F. K. Pigford against F. S. Neely to recover premium payments required under accident policies. From an adverse judgment defendant appeals. Affirmed.

Affirmed.

Thos. J. Tubb, of West Point, for appellant.

As in the case of contracts generally, it is essential to the creation of a contract of insurance that there be an offer or proposal by one party and an acceptance by the other. The agreement is usually effected by an offer or application by insured and acceptance by the company or else by the tender of a policy by the company and its acceptance by insured.

32 C. J., page 1102, sections 187 and 188; Wheelock v. Clark, 21 Wyo. 300, 131 P. 35, Ann. Cas. 1916A 956.

To constitute an insurance contract, the minds of the parties must meet as to the terms of the contract.

Scottish Union & Nat. Life Ins. Co. v. Warren Gee Lbr. Co., 80 So. 9; Ins. Co. v. Lbr. Co., 94 Miss. 159, 47 So. 551; Ins. Co. v. Wylie, 110 Miss. 681, 70 So. 835; Ins. Co. v. Alexander, 12 So. 25; Ins. Co. v. McIntosh, 86 Miss. 236, 38 So. 775.

There is no proof in this record that appellee had authority to bind the association to make substitutions of insureds in the policy issued, although appellee agreed that the association would do this. This made the whole matter merely a proposition from appellant to the association to take the insurance with such a provision as a part of the contract. The agreement of the association to make substitutions was a material part of the offered contract, and which, under the uncontradicted proof here, was never accepted by the association and was not incorporated into the issued policies.

There can be no question but that appellee did not act in good faith in his dealings with the appellant, when he forged or caused to be forged the applications of the employees of appellant for the insurance policies. If the answers in the applications were false, the association would certainly deny liability in case of loss under the policies issued. Because of this fraud, the appellee cannot recover in the case.

Hoke v. National Life & Acc. Ins. Co., 103 Miss. 269, 60 So. 218.

The contracts of insurance issued were void as against public policy, the appellant having no insurable interest in his employees and the contract being a wagering contract and there was no consideration for the check in question and appellee cannot recover thereon.

National Life & Acc. Ins. Co. v. Ball, 127 So. 268.

In order that an individual employer may have an insurable interest in the life of an employee it must appear that his continued employment is necessary to the profitable operation of the work in which he is engaged and that his death would result in substantial loss to the employer.

37 C. J. 397, sec. 65.

The rule seems to be that the only insurable interest of the appellant in his employees is to take insurance upon his employees to indemnify himself against such loss as he may incur because of his negligence, i. e., losses for which he is legally liable. All insurance upon the employees of appellant in excess of this interest is pure wager or gambling, such that it would be financially beneficial to appellant for his employees to be accidentally injured or killed in the absence of negligence on his part. Therefore, the insurance' contract was void and there was no consideration for the check here sued on and appellee cannot recover the amount of said check.

1 C. J. 407, sec. 12.

Watkins & Eager, of Jackson, for appellee.

This court, ever since the adoption of the statute now incorporated into the Code of 1930 as Section 5196, but which first appearing in the Code of 1880 as Section 1086, has always held that a general agent such as the appellee, Pigford, was in this particular case, during the negotiations leading up to the consummation of the contract, was the alter ego of the company and could make contracts and bind the company as he saw fit.

Ins. Co. v. Sheffy, 71 Miss. 919; Ins. Co. v. Gibson, 72 Miss. 58; Mitchell v. Miss. Home Ins. Co., 72 Miss. 53; Liverpool, etc., Ins. Co. v. Lbr. Co., 72 Miss. 535; Fire Ins. Co. v. Bank, 73 Miss. 469, 18 So. 931; Western Assurance Co. v. Phelps, 77 Miss. 625; Fire Ins. Co. v. Randle, 81 Miss. 720, 33 So. 500; Home Ins. Co. v. Stevens, 93 Miss. 439, 46 So. 245; Fire Assn. v. Stein, 88 Miss. 499, 41 So. 66; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Scottish Union Fire Ins. Co. v. Wylie, 110 Miss. 681, 70 So. 835; Franklin Fire Ins. Co. v. Franks, 145 Miss. 494, 111 So. 195; Lamar Life Ins. Co. v. Kemp, 154 Miss. 890, 124 So. 62; Interstate Life Ins. Co. v. Ruble, 160 Miss. 206, 133 So. 223; Capital Paint & Glass Co. v. St. Paul Mercury Ind. Co., 176 So. 729.

The appellant in this case can not take advantage of the fact that the applications were filled in by the company's agent, for the reason that the company would have forever been estopped to claim any benefit by reason of any misstatement made in the application. This court has always held that where an agent attempts to fill in the application for insurance himself, that the company is forever estopped to deny the truthfulness of the answer contained in the application.

American Ins. Co. v. Mahoney, 22 L.Ed. 593, 21 Wall. 152, 56 Miss. 180; Mutual ReserVe Ins. Co. v. Ogletree, 77 Miss. 7; Fraternal Union v. Whitehead, 125 Miss. 153, 87 So. 452; Fidelity & Cas. Co. v. Cross, 131 Miss. 632, 95 So. 631; Home Ins. Co. v. Thornhill, 165 Miss. 787, 144 So. 861.

It is, therefore, apparent that the filling in of the applications by the company's agent did not constitute a fraud on the appellant in any sense of the word, but did forever estop the company from defending any litigation denying any liability because of any misstatement in any application.

Cooperative Oil Co. v. Greenwood Agency Co., 148 Miss. 536, 114 So. 397; Dowling v. White Lbr. Co., 170 Miss. 267, 154 So. 703.

In the first place, no charges of fraud on the part of the appellee were made in the pleadings. Second, the proof is not sufficient in this case to support a charge of fraud; and third, the jury were not of the opinion that any fraud had been perpetrated upon appellant, for their verdict is in favor of the appellee.

Carter v. Eastman-Gardner Co., 48 So. 615, 95 Miss. 651; Willoughby v. Pope, 58 So. 705, 101 Miss. 808; Metropolitan Life Ins. Co. v. Hall, 118 So. 826, 152 Miss. 413; Columbian Life Ins. Co. v. Harrison, 154 So. 722, 170 Miss. 121.

We admit, if Your Honors please, that the question of whether or not an employer has an insurable interest in his employees, who are common laborers, to the extent that he can take out insurance on their lives without their knowledge or consent, is a debatable question, and we find that the authorities are about equally divided on file proposition.

We respectfully submit, however, that the authority cited by appellant, being I C. J. 407, supports the contention of the appellee in this case that the appellant had an insurable interest in his employees, not for the purpose necessarily of taking out a life insurance policy, but for the purpose of taking out a policy indemnifying the beneficiary employer against accidents only.

We again call Your Honors' attention, however, to the fact that this contract was approved before being entered into by both the appellant and his attorney, and we ask at this stage what right the appellant has to question the validity of the policy which he and his attorney previously approved and applied for. We respectfully submit that the appellant is estopped to take advantage of the fact, if it be a fact, that appellant had no insurable interest in his employees. In other words, it is the appellee's contention that this is a question which the appellant has no right to raise, but which can only be raised by the Mutual Benefit Health & Accident Association or the insurance company, when confronted with a claim.

1 Couch's Cyclopedia of Insurance Law, page 772, sec. 295; Farwell v. Johnson, 201 N.Y.S. 327; Keckley v. Coshocton Glass Co., 99 N.E. 299; Pierce v. Metropolitan Life Ins. Co., 46 Ohio App. 36, 187 N.E. 77.

Jesse...