New York Life Insurance Company v. McIntosh

• Decision Date: 10 July 1905
• Citation: 38 So. 775,86 Miss. 236
• Court: Mississippi Supreme Court
• Parties: NEW YORK LIFE INSURANCE COMPANY v. MARY MCINTOSH

38 So. 775

86 Miss. 236

NEW YORK LIFE INSURANCE COMPANY v. MARY MCINTOSH

Supreme Court of Mississippi

July 10, 1905

April 1905

FROM the chancery court of Harrison county, HON. THADDEUS A. WOOD Chancellor.

Mrs McIntosh, the appellee, was complainant, and the insurance company, the appellant, defendant in the court below. From a decree in the complainant's favor the defendant appealed to the supreme court.

The evidence showed that R. McIntosh made an application to appellant for a life insurance policy for the benefit, of his wife, appellee, December 31, 1903. He paid the amount of the first annual premium of $ 392.65, and obtained a receipt therefor. The receipt contained the following stipulation "If a policy be issued on the application for insurance made by the above this day to the New York Life Insurance Company, corresponding in date and number with this receipt said company shall accept this receipt as cash toward the payment of the first premium. If the policy be not issued on said application and examination within sixty days, said sum will be returned on surrender of this receipt to the company." This application was for an accumulation policy. The company, after consideration of the application, declined to issue the policy asked for, but on January 7, 1904, agreed to give McIntosh a policy on the fifteen-year endowment and life-lien plan, which was somewhat different from the one applied for, and sent the policy to the applicant. McIntosh declined to accept this policy, and wrote the company that if it could not issue the policy applied for to return his money. The applicant then furnished further evidence of insurability, and the defendant then decided to offer what it called a fifteen-year endowment policy in the adjustable accumulation class, without lien, which was different from the one formerly offered. This policy was sent to the agent of the company to be tendered to McIntosh. When this last policy was received by the agent, he had learned that McIntosh was sick, and did not deliver it. McIntosh died on the 23d day of February, 1904. The last policy was returned to the company by the agent.

Reversed and remanded.

Ford & White, Rice & Montgomery, and James McIntosh, for appellant.

Acting upon an application for insurance by offering a policy different from the policy applied for, or by imposing any conditions of any kind, is, in law, a rejection of the application, constituting a counter-offer, which cannot become a contract until submitted to and accepted by the applicant.

This is a familiar rule of law. It is the ordinary rule governing the making of all contracts of sale. Your Honors have often referred to and applied it. Waul v. Kirkman, 27 Miss. 823; Jacobs v. Ins. Co., 71 Miss. 658.

The text-books all agree upon the necessity of the acceptance of an offer precisely as made in order to constitute a contract.

Minneapolis & St. Louis R. R. Co. v. Columbus Rolling Mill Co., 119 U.S. 149, excellently illustrates the application of the rule now under discussion. There the plaintiff wrote the defendant for prices on rails in lots of from 2,000 to 5,000 tons. The defendant answered, giving prices. The plaintiff then wired, "Over 1,200 tons," but the defendant telegraphed back; "We cannot book your order at present at that price." On receipt of this telegram the plaintiff wired: "Please enter order for 2,000 tons rails as per your letter." The defendant made no answer to this and did not deliver the rails. The plaintiff sued for damages, but was defeated. Mr. Justice Gray, delivering the opinion of the court, said: "The rules of law which govern this case are well settled. As no contract is complete without the mutual assent of the parties, an offer to sell imposes no obligation until it is accepted according to its terms. So long as the offer has been neither accepted nor rejected, the negotiation remains open, and imposes no obligation upon either party; the one may decline to accept or the other may withdraw his offer, and either rejection or withdrawal leaves the matter as if no offer had ever been made. A proposal to accept, or an acceptance, upon terms varying from those offered, is a rejection of the offer, and puts an end to the negotiation unless the party who made the original offer renews it or assents to the modification suggested. The other party, having once rejected the offer, cannot afterwards revive it by tendering an acceptance of it."

Applying these principles, the court held that the telegram for 1,200 tons of rails was a rejection of the defendant's offer, which the plaintiff could not revive by his subsequent letter accepting the offer as made.

Other cases illustrating the application of this rule are the following: Carr v. Duval, 14 Pet., 77; Mutual Life v. Young, 23 Wall., 85; First National Bank v Hall, 101 U.S. 43; Campania, etc., v, Light & Power Co., 146 U.S. 483; Harr & Co. v. Ship Co., 29 U.S. App., 599; Equitable Life v. Mc Elroy, 28 C. C. A., 365; Mohrstadt v. Mutual Life, 52 C. C. A., 675; Phoenix Ins. Co. v. Schultz, 42 U.S. App., 483; Hamblet v. Ins. Co., 36 F. 122; Jenness v. Mount Hope Iron Co., 53 Me. 20; Ocean Ins. Co. v. Carrington, 3 Conn. 357; Rogers v. Chester Oak Life Ins. Co., 41 Cinn., 97; Quinlan v. Ins. Co., 133 N.Y. 356; Millville Ins. Co. v. Collard, 38 N.Y. 480; Myers v. Keystone Mut. Life Ins. Co., 27 Pa. St., 268; ...