Old Equity Life Ins. Co. v. Jones, 45040

• Decision Date: 13 January 1969
• Docket Number: No. 45040,45040
• Parties: OLD EQUITY LIFE INSURANCE COMPANY v. T. C. JONES.
• Court: Mississippi Supreme Court

Page 648

217 So.2d 648

OLD EQUITY LIFE INSURANCE COMPANY v. T. C. JONES.

No. 45040.

Supreme Court of Mississippi.

Jan. 13, 1969.

Rehearing Denied Feb. 3, 1969.

Richard M. Edmonson, Henley, Jones & Henley, Jackson, for appellant.

T. Eugene Caldwell, James A. Phyfer, Jackson, for appellee.

INZER, Justice:

This is an appeal from a directed verdict granted by the Circuit Court of Simpson County in favor of appellee, the plaintiff below, in a suit on an insurance contract. For the reasons set out we reverse and remand for a new trial.

On October 8, 1964, E. A. Craft, a soliciting agent for Old Equity's general agent, Lindel R. Jones of the Jones Insurance Agency, approached appellee, T. C. Jones, concerning a certain type of health and accident policy offered by appellant, Old Equity Life Insurance Company. Appellee testified that he tendered a cash premium of $77.60 and a receipt in that amount dated October 8 was admitted into evidence. He also testified that Craft had represented the accident provisions of the policy as being in effect at that moment. The original application which was partially filled out by Craft and signed by appellee was admitted into evidence on the cross-examination of appellee. The application contained the following stipulation to which a 'yes' was signed.

'10. Do you hereby declare that all information furnished herein is true and correct to the best of your knowledge and belief; and do you agree that only the Officers of the Company can accept or reject this application and that the policy applied for shall not take effect until the first premium is paid in full and accepted by the company and the policy issued while you and members of your family are alive and to the best of your knowledge in good health?'

The application, as it was admitted, was dated October 30, 1964, and co-signed by John B. White as 'Licensed Agent.' No explanation was offered by either side as to the reason for the difference in the dates between the receipt and the application, nor did appellant offer an evidence which attempted to refute the October 8 date testified to by appellee. The application contains a notation that it was received by the home office on November 10, 1964, or 33 days after appellee testified that he submitted it to Craft.

Around the 13th of November appellee testified that he had received a communication from appellant about his application. He had not retained it but both his wife and daughter testified that generally the message was that of welcoming his application and saying that it was in the process of examination and that the policy would be sent to him on approval. Some time later in November appellee testified that he had become concerned because his policy had not arrived and he stopped by the Jones Insurance Agency to inquire about its whereabouts. He said that Lindel Jones and John B. White were there and he talked with them. He inquired about Craft and was informed that he was not with them any more. He then told them that he had taken out an insurance policy with Craft and he had not received it. He said that Lindel Jones told him 'Don't worry about that. That thing will be here just in a few days. You're covered right not for an accident.' He said that White also told him not to worry about it, he was covered.

Appellant did not attempt to contradict this version of the meeting when Lindel Jones was recalled to the stand later in the trial.

On December 28, 1964, appellant, through its underwriter John Nordquist decided to reject appellee's insurance application for 'confidential reasons.' Mr. Nordquist testified that he ordered a rejection letter sent to appellee. The copy of the letter was not allowed into evidence because appellee denied receiving it, because it was improperly addressed, and because Nordquist could not testify that it was actually sent. Appellant was able to prove that the notice of rejection was sent to the Jones Insurance Agency in which they were ordered to return the premium. Mr. Carl Meyers, the partner of Lindel Jones in the Southern Health Agency located in Jackson, Mississippi, testified that the notice was referred to him and on January 12, 1965, he issued a check for $73.60 payable to T. C. Jones. There was no accompanying letter with the check from Southern Health Agency signed by Meyers. Appellee admitted getting the check and cashing it but stated he did not realize what the purpose of the check was, because he had never heard of Meyers or the Southern Health Agency and the amount was not the same as the original premium. In any event the check was returned to appellee because of insufficient funds in the Southern Health Agency bank account.

On January 16, 1965, appellee had an accident that resulted in the amputation of one of his legs. There is no issue presented as to the accident.

Meyers testified that upon learning the check was returned for insufficient funds he had a cashier's check drawn for $73.60 and sent it to appellee on February 3, 1965. This is approximately 113 days after the premium was first taken and still not for the full amount.

Appellee's original declaration stated the insurance policy had been issued and was in effect but was being retained by appellant or had been destroyed. Upon the testimony of appellant's first witness, Nordquist, the underwriter in charge of appellee's application, to the effect that the appellant had rejected the application, appellee asked for permission to amend his declaration. The trial court gave the permission and the following language was added over the objection of appellant.

Defendant, in assigning a policy number AL218670 to the application of plaintiff submitted by the L. R. Jones Insurance Agency, and not having rejected said application, and not having refunded the initial premium paid by plaintiff, entered into an insurance contract with plaintiff.

At the close of appellant's case it introduced a copy of the type of policy that appellee had applied for and by a witness proved the exact amount that would be due under the terms of the policy had it been in effect. When the trial judge granted the directed verdict the recovery was limited to the amount proved by appellant.

It is the appellant's contention that the declaration as amended does not state a cause of action under Mississippi law; the trial court should be reversed and a judgment rendered for appellant. Although we do reverse for reasons set out below, we cannot agree with appllant's view of the law.

The amendment made by appellee had the effect of introducing the issue of estoppel against appellant to deny that it had accepted appellee's application. It is appellant's contention that estoppel even if proven cannot be employed against an insurance company to prevent them from denying acceptance of an insured's application for insurance.

The general law on offer and acceptance in this State has long accepted the principle that an acceptance may be implied from the actions of offeree. Judge Griffith speaking for the court in Fanning v. C.I.T. Corporation, 187 Miss. 45, 192 So. 41 (1939) states the rule as follows:

The rule is that acceptance of a contract as binding upon a party may be shown by his actions, and any definite and unequivocal course of conduct disclosing that the party has acceded or assented to it, is as binding on him as had he endorsed his assent in formal writing. And although he may have stipulated that the contract shall not...