New York Life Ins. Co. v. Babcock
| Decision Date | 11 April 1898 |
| Citation | 30 S.E. 273,104 Ga. 67 |
| Parties | NEW YORK LIFE INS. CO. v. BABCOCK. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. A contract of life insurance is consummated upon the unconditional written acceptance of the application for insurance by the company to which such application is made.
2. Actual delivery of the policy to the insured is not essential to the validity of a contract of life insurance, unless expressly made so by the terms of the contract.
3. The receipt by an agent from his insurance company of a policy to be unconditionally delivered by him to the applicant is, in law, tantamount to a delivery to the insured, although the agent never parts with possession of the policy, and although its delivery to the applicant is, by contract, made essential to its validity.
4. Its follows from the above that, where an application for life insurance was accepted by an insurance company, a policy duly executed was issued thereon, and was sent by the Company from its home office in New York to its local agent in this state to be unconditionally delivered to the applicant, who was in life and in good health when the agent received the policy and where the agent, instead of handling the policy to the insured, kept it, but nothing remained for the insured to do before he was entitled to its possession, there was in law a complete delivery of the policy to the insured, and a consummation of the contract of insurance; and the company is not relieved of liability on its contract because a receipt previously given by such agent to the applicant for premium paid in advance, contained a stipulation to the effect that the company should not be liable until the policy was delivered to the applicant while in good health.
Error from superior court, Whitfield county; A. W. Fite, Judge.
Action by Adelaide A. Babcock against the New York Life Insurance Company. Plaintiff had judgment, and defendant brings error. Affirmed.
Fulton Colville, for plaintiff in error.
R. J. & J. McCamy and Jones & Martin, for defendant in error.
This was a suit upon a policy of life insurance. The case was submitted to the court, without a jury, upon an agreed statement of facts, the substance of which was as follows: On November 20, 1895, H. C. Babcock made application to J. D. Thomas, local agent at Dalton, Ga., of the defendant company, for insurance of $5,000. On the same day, Babcock paid the agent the first year's premium on said policy, to wit, $174, and at the same time said local agent gave to said Babcock a receipt to the effect that this sum of $174 should be held for Babcock on the condition "that if the officers at the home office of the New York Life Insurance Company approve an application made by him this day for an insurance of five thousand dollars, and a policy is issued and delivered to him while living and in good health, said sum shall be applied in payment of the first annual premium on said insurance, provided on or before such delivery he shall first pay any balance of said premium on said insurance, provided on or before such delivery he shall first pay any balance of said premium," and "that unless his application is approved, and a policy is issued and delivered to him while living and in good health, and until such first annual premium is paid in full, the New York Life Insurance Company incurs no liability except for the return of said sum on surrender of this receipt." The receipt furtheer stipulated "that no agent has power in behalf of said company to make any contract of insurance or to bind said company by making any promise or making or receiving any representation or information." The application made at the same time the receipt was given was at once forwarded by the agent to the home office of the company in New York. It was provided in the application "that the company shall incur no liability under this application until it has been received, approved, the policy issued thereon by the company at the home office, and the premium has actually been paid to and accepted by the company or its authorized agent during mylifetime and good health." This application was stamped: In the application was this further provision: "That the foregoing application, together with the answers made to the medical examiner in continuation of and forming part of the application, shall be a consideration for and tha basisof the contract of the New York Life Insurance Company, under any policy issued under this application." On the 26th day of November, 1895, a policy iof insurance to the applicant was issued, in which was contained the exact provisions abhove quoted from the application; and on the face of this policy were the words: "In witness whereof, the New York Life Insurance Company has, by its duly-authorized officers, signed and delivered this contract, this, the 26th, day of November, 1895, walk from the post office, but carried it home with him, his home being about one mile from the post office. The policy remained in this agent's possession until about 9 o'clock of the morning of December 2, 1895, at which time one Sherry McAuley, whom the agent knew to be an intimate friend of Babcock, called and asked for said policy, stating that he was authorized to receive it. The agent asked if Babcock was sick, and McAuley replied that he was not. After hesitating, the agent delivered the policy to McAuley. After McAuley had received the policy, he then informed Thomas that Babcock was dead; that he was found dead on the afternoon of the day before, in his office, with a pistol wound in his breast. This was the first knowledge the agent had of Babcock's death, and he at once demanded the return of the policy, but McAuley refused to give it up. The plaintiff, Adelaide A. Babcock, is the party named in the policy as beneficiary, and is the mother of the deceased applicant. Demand was duly made by plaintiff on defendant company for the payment of the policy after the same became due, which demand was refused. No offer to return the money paid by the applicatnt to the agent Thomas had ever been made to the legal representative of the estate of Babcock until the day of the trial. Babcock, the applicant, died on December 1, 1895, about 4 o'clock in the afternoon, and was in good health up to the time of his death. After argument had upon the foregoing evidence, the court rendered a judgment for the plaintiff against the defendant for the principal sum sued for, $5,000, besides interest and costs of suit. To this judgment defendant excepted, upon the following grounds: (1) Because the court erred in holding the contract between the parties was consummated without the delivery of the policy, the parties having contracted, as defendant contends, the actual delivery of the policy should be made during life of applicant; (2) because the court erred in holding there was a deliveryof the policy under the contract; (3) because the court erred in disregarding the conditional receipt as being a part of the contract, said receipt declaring the policy must be delivered during the lifetime of the applicant; (4) because the court erred in holding the applicant had paid his first premium, the conditional receipt showing, as defendant contends, that there was really no payment,and that there was no intention upon the part of the applicant to pay, or defendant to receive, said money as a premium.
The fundamental question to be determined in the legal construction of all contracts is, what was the real intention of the parties? Where one party makes a proposition to purchase a thing which is unconditionally accepted by the other, the contract of purchase becomes complete. There is no reason why the same rule should not be applied when a written application is made for an insurance policy. So long as the application is not acted upon by the insurance company, of course no contract has been consummated; and, if the applicant should die before the acceptance of his application, the company has incurred no liability. But when the application is accepted, and nothing remains for the applicant to do, the contract becomes complete. Acutal delivery of the policy to the insured is not essential to the validity of such a contract, unless expressly made so by its terms. It is true that as to whether or not a policy has been delivered often becomes a material question, for this is usually the most effectual way of proving the acceptance of the application made by the insured. But the contract may be otherwise proven, and, when it is shown to be in writing, it is ordinarily binding upon the company, though there should be no delivery whatever, either actual or constructive, of the policy, and though it should remain in the hands of the company. This principle is settled by the provisions of our statute, which declares: "Such contract [fire insurance], to be binding, must be in writing; but delivery is not necessary if, in other respects, the contract is consummated." Civ. Code, § 2089. By section 2117 of the Civil Code the same principle is made applicable to life insurance. See, also, Cooke, Life Ins. p. 43; 1 Joyce, Ins. § 91. See, also, opinion of Chief Justice Simmons in Alston v. Insurance Co. (Ga.) 29 S.E. p. 266. We do not mean to say, however, that the insurer and the insured cannot, by their contract, make an actual delivery of the policy essential to...
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