New York Life Ins. Co. v. Ollich, 5488.

• Decision Date: 27 June 1930
• Docket Number: No. 5488.,5488.
• Citation: 42 F.2d 399
• Parties: NEW YORK LIFE INS. CO. v. OLLICH.
• Court: U.S. Court of Appeals — Sixth Circuit

42 F.2d 399 (1930)

NEW YORK LIFE INS. CO. v. OLLICH.

No. 5488.

Circuit Court of Appeals, Sixth Circuit.

June 27, 1930.

A. D. Baldwin, of Cleveland, Ohio (Garfield, Cross, MacGregor, Daoust & Baldwin, of Cleveland, Ohio, on the brief), for appellant.

D. H. Wasserman, of Cleveland, Ohio, for appellee.

Before DENISON, MACK and HICKS, Circuit Judges.

MACK, Circuit Judge.

On May 10, 1928, Ollich, a resident of Cleveland, Ohio, made written application to the defendant insurance company through Greitzer, one of its soliciting agents, for a policy of life insurance and named his mother, the present plaintiff, as beneficiary. The policy applied for required a semiannual premium of $26.54. The application further provided (1) "that the insurance hereby applied for shall not take effect unless and until the policy is delivered to and received by the applicant and the first premium thereon paid in full during his lifetime," and (2) that only certain specified executive officers of defendant could waive any of the company's rights or requirements. The application was accepted and a policy written on May 16th and sent to defendant's branch office at Cleveland.

About a week after Greitzer had taken the application, Ollich paid him $3, and the agent agreed to advance the first premium to the company, to be repaid in $5 weekly installments. On Saturday, June 2d, the agent met Ollich on the street and said, "I have your policy," and asked Ollich whether he had "any" money for him. The latter said, "Yes, I left the money for you with Mrs. Weiss," and asked the agent for the policy. The agent answered that he didn't have it with him but that he would give it to him on Sunday or Monday. Ollich told him to give it to his mother; this Greitzer said he would do. Thereupon on June 2d he called on Mrs. Weiss, received an additional $15, and gave her, not an official company receipt, but his personal receipt for this amount. It stated also a balance due of $8.54. Greitzer testified, "I was ready to deliver it (the policy) on Saturday night of June 2d."

Ollich was shot and died about midnight on the night of June 3d. The next morning, Greitzer, who did not know of the death of the applicant, paid the net premium, about $12, at the office of the company, and pursuant to a general practice, signed a voucher for his commission. He then proceeded to the home of Ollich's mother where he first learned of the shooting and death, and thereafter he immediately turned the policy back to the company. Notice of the death of Ollich was given to defendant and demand made for the payment of the double indemnity due in the case of accidental death. This demand was refused and the $18 tendered back to plaintiff; this she refused to accept.

Plaintiff brought suit on the policy in the state court, and the cause was duly removed to the District Court. At the close of plaintiff's evidence in chief, both sides moved for a directed verdict; defendant's motion was overruled, and the jury was directed to bring in a verdict for plaintiff for the full amount of the double indemnity. Judgment was entered on this verdict, and defendant appeals.

Defendant contends that both the full payment of the first premium and the delivery of the policy to the insured in his lifetime were conditions precedent to the effectiveness of the policy; that the agent, Greitzer, had no authority to waive either of these conditions; and that since neither of them was complied with, the policy was never in force. Plaintiff contends that the payment of more than the net premium to the agent with an agreement to pay him personally the balance, constituting his commission, in installments, effectuated a complete payment of the first premium in view of the established company practice, and that the statement of the agent to the insured that he had the policy, together with his acceptance of the insured's directions to give it to the latter's mother, constituted constructive delivery of the policy which at the time had been handed over to the agent for delivery and was in his possession at his office.

1. Defendant's motion for a directed verdict was unaccompanied by a request for specific instructions or findings in case the motion should be denied. It is well settled that by mutual requests for directed verdicts, the parties submit to the trial judge "the determination of all inferences proper to be drawn from the facts submitted, and upon this review the court's conclusion of fact must stand, if the record discloses any substantial evidence to support it." Mayes v. United States Trust Co., 280 F. 25, 26 (C. C. A. 6th); Beuttell v. Magone, 157 U. S. 154, 15 S. Ct. 566, 39 L. Ed. 654; Sena v. American Turquoise Co., 220 U. S. 497, 31 S. Ct. 488, 55 L. Ed. 559; Williams v. Veeland, 250 U. S. 295, 39 S. Ct. 438, 63 L. Ed. 989, 3 A. L. R. 1038.

2. If the insured had paid the full premium to the agent after the latter had received the policy from the company for delivery on payment, and if the agent, not having the policy with him at the time of payment, had agreed with the insured to deliver it to the insured's mother, there could be little doubt that the policy would have been put into effect. Under such circumstances, payment to the company would be complete because the agent was authorized to receive the money, and his agreement to hold the policy for the insured or, as in the case put, to deliver it to another for him, would constitute a constructive delivery. Payne v. Mutual Life Ins. Co., 141 F. 339 (C. C. A. 8th); New York Life Ins. Co. v. Rutherford, 284 F. 707 (C. C. A. 9th); Jackson v. New York Life Ins. Co., 7 F.(2d) 31 (C. C. A. 8th). See Williston, Contracts, § 211.

Although the insurer may insert conditions in the application, requiring full payment of the first premium and delivery before the policy takes effect, such conditions are for its own benefit and may be waived. Knickerbocker Life Ins. Co. v. Norton, 96 U. S. 234, 24 L. Ed. 689; Schwartz v. Northern Life Ins. Co., 25 F.(2d) 555, 558 (C. C. A. 9th), and cases therein cited; cf. Williston, Contracts, § 760. Whether or not there is, in any case, a waiver, must be determined from all the facts and circumstances.

But the company, too, may establish a course of dealing with its agent under which the full payment to it as specified is effectuated by its receipt of the net premium, leaving the agent to deal with the balance of the premium, his commission, as he pleases. In the record before us, there is ample evidence to justify the conclusion that, as between the agent and the company, it was the latter's common practice to permit the agent to pay to it only the net premium in cash, without payment or accounting of the balance, his commission, regardless of whether the sum actually paid to the agent by the insured was the gross or the net premium. Accordingly, the difference between gross and net, the commission, was the agent's to deal with entirely as he saw fit. The company had no interest therein or concern with its use. McConnell v. Southern States Life Ins. Co., 31 F.(2d) 715 (C. C. A. 5th). If, therefore, the insured had paid the amount of the net premium to the agent and the latter had delivered the policy to the insured, treating the amount of his commission as a loan by him to the insured, the policy would have been in force, since there would have been an actual delivery and the company's share of the first premium would have been paid. See Metropolitan Life Ins. Co. v. Williamson, 174 F. 116 (C. C. A. 5th); Life Ins. Co. v. Condos, 24 Ohio App. 506, 157 N. E. 306. In these circumstances, the condition in the application requiring payment of the first premium could not in the light of the known practice preclude the agent from giving credit for all or any part of his commission, in which the company had no real interest. Metropolitan Life Ins. Co. v. Williamson; Schwartz v. Northern Life Ins. Co.; McConnell v. Southern States Life Ins. Co., supra. See Vance, Insurance, 178.

It would be otherwise if the practice had...