Paine v. Pacific Mut. Life Ins. Co., 119.

• Decision Date: 09 August 1892
• Docket Number: 119.
• Citation: 51 F. 689
• Parties: PAINE v. PACIFIC MUT. LIFE INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

51 F. 689

PAINE v. PACIFIC MUT. LIFE INS. CO.

No. 119.

United States Court of Appeals, Eighth Circuit.

August 9, 1892

Statement by SANBORN, Circuit Judge:

This was an appeal from a decree of the circuit court for the district of Nebraska, dismissing the bill of appellant to enforce specific performance of a contract which the bill alleged the appellee made with Forrest L. Kendall on May 29 1890, to insure his life for $10,000, and to recover of the appellee for his death that amount, less a few dollars of unpaid premium. The answer denied that such a contract was made, and the court below, after hearing the cause on the pleadings and proofs, dismissed the bill. From the pleadings and proofs the following facts appear:

The complainant was the administrator of the estate of Forrest L Kendall, and the defendant was a corporation organized under the laws of California, and authorized to insure lives in the state of Nebraska. Its home office and principal place of business was in San Francisco, Cal. One Limback was the agent of the defendant at Grand Island, in Nebraska, to solicit applications and collect premiums, but without authority to make, or to agree to make, contracts of insurance for the defendant. On May 29, 1890, he solicited and obtained from Kendall his application to the defendant in writing and print, for a policy of insurance on his life. This application was signed by Kendall, and contained the following stipulations:

'Do you understand and agree that only the officers of the home office have authority to determine whether or not a policy shall issue on any application, and that they act only on the statements and representations in the application, and that no statements, representations, or information made or given by or to the person soliciting or taking this application for a policy, or to any other person, shall be binding on the company, or in any manner affect its rights, unless such statements, representations, or information be reduced to writing, and presented to the officers of the company at the home office in this application? Yes. * * * And it is agreed that there shall be no contract of insurance until a policy shall have been issued and delivered by the said company, and the first premium thereon paid, while the person proposed for insurance is living and in the same condition of health described in this application; and that, if said policy be issued, the declarations, agreements, and warranties herein contained shall constitute a part of the contract, and the contract of insurance, when made, shall be held and construed at all times and places to have been made in the city of San Francisco, in the state of California; * * * policy to be dated the first day of June, 1890. (All policies of the company are issued as of the first day of each month.) * * * It is agreed that the foregoing statements and answers, as well as all others made or to be made to the company's medical examiner or soliciting agent, are warranted to be true, and are offered to the company as a consideration of the contract, which shall not take effect until the first premium shall have been paid during the life and good health of the person herein proposed for insurance.'

When he obtained the application, the agent, Limback, agreed to take $10 of the first quarterly premium in trade at Kendall's store, and after Kendall's death he did get from that store, on this account, a box of cigars. Kendall agreed to pay the balance of this premium, $59.90, when the policy was delivered. The application was forwarded to the home office. On June 3, 1890, Kendall was drowned. On June 6, 1890, the application first reached the defendant's home office, and on June 7, 1890, it was examined and approved by its medical director, in ignorance of Kendall's death. On June 9, 1890, defendant learned of his death, and refused to issue a policy. On June 30, 1890, complainant tendered $59.90 to Limback in payment of the first quarterly premium, but he refused to receive it, and offered to pay $10 to complainant, which he refused to accept. This suit was then brought.

R. W. Breckenridge and O. A. Abbott, for appellant.

Charles O. Whedon, for appellee.

Before CALDWELL and SANBORN, Circuit Judges, and SHIRAS, District Judge.

SANBORN Circuit Judge, after stating the facts as above, .

The court below found that the defendant company never made any contract to insure the life of Kendall, and on this ground dismissed this bill. The complainant assigns this finding and decree as error, and the only question to be considered is whether or not the proofs fairly established such a contract, for, if they did, the bill should not have been dismissed, but a decree should have been rendered for the complainant for the relief he sought. On May 29, 1890, Kendall made his written application to defendant for insurance, and caused it to be forwarded to its home office, where alone it could be accepted or rejected. On June 3, 1890, he was drowned. On June 6, 1890, the defendant first received the application at its home office. On June 7, 1890, its medical director, in ignorance of Kendall's death, approved the application. Kendall knew the application could be accepted and a contract of insurance made by the officers of defendant at its home office only.

The material facts in this case are undisputed, and the evidence calls for no comment. There is neither doubt nor difficulty as to the rules of law applicable to these facts. To discuss them would be futile, for they are not debatable; they are founded in reason, settled by long lines of decisions, and conclusively demonstrate that there could have been no contract by this defendant, under the facts of this case, to insure the life of the decedent. Ample reason for this conclusion will appear from the bare statement of some of these rules. As no policy was issued, and the custom of insurance companies is to issue a policy when a contract of life insurance is made, the presumption is that on May 29 1890, when the application was signed, there were negotiations, but no contract, and no purpose to contract otherwise than by a policy made and delivered upon simultaneous payment of premium. Heiman v. Insurance Co., 17 Minn. 153, 157, (Gil. 127;) Markey v. Insurance Co., 103 Mass. 92; ...