New York Life Ins. Co. v. Dumler

• Decision Date: 04 August 1922
• Docket Number: 3831.
• Citation: 282 F. 969
• Parties: NEW YORK LIFE INS. CO. v. DUMLER.
• Court: U.S. Court of Appeals — Fifth Circuit

282 F. 969

NEW YORK LIFE INS. CO. v. DUMLER.

No. 3831.

United States Court of Appeals, Fifth Circuit.

August 4, 1922

A. H Longino, of Jackson, Miss. (James H. McIntosh, of New York City, on the brief), for appellant.

A. W Shands, of Cleveland, Miss. (Shands, Elmore & Causey, of Cleveland, Miss., on the brief), for appellee.

Before WALKER, BRYAN, and KING, Circuit Judges.

KING Circuit Judge.

New York Life Insurance Company brought its bill of complaint against Lewis J. Dumler in the United States District Court for the Northern District of Mississippi, seeking to cancel and have redelivered to it a policy of insurance for $25,000 issued by it to said Dumler, on the grounds that the application of the insured on which said policy was issued agreed that the insurance should not take effect, unless the first premium was paid, and the policy delivered to, and received by, said assured during his lifetime and good health, and also that said application stipulated that it was made to obtain the insurance applied for, and the applicant represented therein that he never had suffered from any ailment or disease of any kind, or been treated therefor by any physician; that, believing and acting on said statements complainant on January 29, 1919, forwarded its policy dated January 23, 1919, to its Memphis office, by which it agreed to pay $25,000 on the receipt of proofs of death of said assured, the policy being then in force, and on proof that the assured had become wholly and permanently disabled before becoming 60 years old, and as much as 60 days before any premium was due, to pay to the insured $2,500 per annum during his lifetime and waive the payment of premium for the ensuing years.

The policy was forwarded from the home office to the Memphis office, with instructions to hold it until the company received an inspection report. On February 3, 1919, the home office telegraphed said Memphis office to place said policy in the hands of the agents soliciting the same, for delivery to the assured, if in good health, on payment of the premium. The soliciting agent, Meyers, about February 15, 1919, visited the home of the assured and ascertained he was then sick, was informed as to assured's condition as then understood, delivered the policy to the assured's agent, and the premium was paid. The assured had been taken ill about 10 p.m. on January 26th with multiple neuritis.

There is no proof of concealment or bad faith on the part of either the assured or his representatives as to information concerning assured's condition, or on the part of the soliciting agent in the delivery of the policy or collection of the first premium, and it was stated on the argument in this court that no such charge was made. It was insisted by the company that no action of the soliciting agent could, under his powers, known to the assured, operate to make a good delivery of the policy, if in point of fact the assured was at the time not in good health, and that the proof demonstrated he was not then in good health. The application for insurance signed by the assured stated that--

'only the president, a vice president, a second vice president, a secretary, or the treasurer of the company can make, modify, or discharge contracts, or waive any of the company's rights or requirements, and that none of these acts can be done by the agent taking said application.'

There was testimony to the effect that the custom was to deliver the policy to the soliciting agent, who took the application for insurance, who was to ascertain if the assured was all right physically, and deliver to assured, or return the policy to the company, accordingly as he determined whether or not the condition then existed which justified the delivery, and that the policy was delivered to the soliciting agent, Meyers, who went to Duncan, Miss., the assured's place of residence, was informed of all the then known facts of Dumler's illness, and delivered the policy, collecting the premium. The assured insisted that this action of the company through Meyers showed that it had elected to deliver the policy with knowledge of the facts, and estopped it to now claim that the policy never took effect because of Dumler's condition of health at that time.

On January 19, 1920, the company's agent at Memphis, Gideon, received a letter from the assured, stating that he was, and had been continuously since February 2, 1919, permanently disabled. On the same day, Gideon wrote the home office, stating that he had--

'received a letter from the insured to the effect that he had been totally disabled since February 2, 1919, and is unable to do any kind of work, and is constantly under the care of a physician. He did not advise us the nature of his trouble. Please send us blanks for him to execute.'

On January 24, 1920, the home office wrote to its Memphis office, acknowledging the receipt of this letter, inclosing blanks, and stating:

'The insured is to be advised that the premium of January 23, 1920, should be duly paid, in order to protect his rights under the contract pending investigation and consideration of his claim for waiver of premium. The premium so paid will be refunded, if application for waiver be approved by the company.'

On February 5, 1920, the physician's certificate, stating that the insured's illness had begun on January 26, 1919, and had continued, was in the company's hands at the Memphis office and was in the home office on February 9, 1920. No instructions were given on receipt of this information not to receive the premium called for in the letter of January 24th. On February 20th, the premium was reported to the home office by Gideon to have been paid. On February 10, 1920, the home office wrote to Wood, its inspector of agencies at its Memphis branch office, that it appeared that the policy was not delivered while the insured was in good health, and asking that he make a thorough investigation of time, place, and manner of delivery, so that an action for rescission could be commenced, if the facts warranted. It was informed by Wood that the policy was delivered to the agent on February 5, and the first premium had been paid on February 24, 1919.

On February 20, 1920, the home office wired Wood that it intended rescinding Dumler's policy and not to accept any premium, if tendered. On February 21, 1920, Gideon wrote the home office, stating this telegram had just been turned over to him, and that the premium had been reported as paid on his sheet of February 20, 1920. On March 1st the home office wrote to Dumler, denying that said policy ever took effect, because Dumler was not in good health when it was delivered and the first premium paid, but that the assured was then, and at least since January 23, 1920, suffering from multiple neuritis, which facts it claimed were concealed from the company. In this letter the company elected to rescind said policy and tendered all premiums paid and interest thereon. This letter and check for said premiums and interest were not mailed to Dumler, but were sent by the home office to Gideon, and were delivered to Dumler by Gideon in person on March 9th. Dumler declined to accede to the rescission or accept said check. On March 3, 1920, said policy had been sent to the home office with the request that it be assigned to the Planters' Bank of Clarksdale, Miss. On March 15th the company wrote, declining to make said transfer and retaining said policy as having been rescinded. It declined, on formal demand from Dumler, to return the same.

In his answer Dumler prayed that the company be required to return said policy to him. On final hearing of said cause, on the pleadings and evidence, the District Court dismissed the company's bill and rendered a decree in favor of Dumler on the prayer in said answer, ordering said company to return to him said policy.

As before stated, it is conceded by counsel for appellant that no...