Peoples Life Ins. Co v. Parker

• Decision Date: 08 June 1942
• Citation: 20 S.E.2d 485,179 Va. 662
• Court: Virginia Supreme Court
• Parties: PEOPLES LIFE INS. CO. v. PARKER.

20 S.E.2d 485

179 Va. 662

PEOPLES LIFE INS. CO.

v.PARKER.

Supreme Court of Appeals of Virginia.

June 8, 1942.

Error from Law and Chancery Court of City of Norfolk; O. L. Shackleford, Judge.

Action by Grace Parker against the Peoples Life Insurance Company on an alleged oral life insurance contract. Judgment for plaintiff, and defendant brings error.

Reversed, and final judgment for defendant entered.

Before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, EGGLESTON, and SPRATLEY, JJ.

Rixey & Rixey, of Norfolk, for plaintiff in error.

Richard B. Kellam and F. E. Kellam, both of Norfolk, for defendant in error.

SPRATLEY, Justice.

This action was brought by Grace Parker against the Peoples Life Insurance Company on an alleged oral contract of life insurance. The Company filed a plea of the general issue and a tender of the return of a premium paid to it. From the judgment of the trial court, approving a verdict for the plaintiff in the sum of $1,-000, the Company appeals.

The record discloses the following facts and circumstances:

C. L. Sowell, a representative of the Peoples Life Insurance Company, hereinafter referred to as the Company, called at the home of Gordon Parker, on January 7, 1941, for the purpose of interesting Parker in taking out some insurance on his life. Parker did not seem to be especially interested, but his wife, Grace Parker, was. Upon the urging of the agent and Mrs. Parker, Parker agreed to apply for a policy of industrial insurance in the sum of $500 with double indemnity in case of accidental death.

Grace Parker and two other witnesses said that Sowell told Parker if he wouldpay a month's premium in advance, amounting' to $2.17, the insurance would be in immediate benefit and effect. Sowell told him that he would have to sign an application and handed him the application form used by his Company. Thereupon Parker took the application and signed it; but being in a hurry to leave, told the agent to let his wife answer the several questions relative to the applicant's age, health, etc., as she knew as much about them as he did. The application signed by Parker contained the following printed language:

"I Hereby Apply for insurance for the amount herein named, and I declare and warrant that the answers to the foregoing and following questions are complete and true, and were written opposite the respective questions by me, or strictly in accordance with my directions. I agree that said answers, with this declaration, shall form the basis of a contract of insurance between me and Peoples Life Insurance Company, and that the policy which may be granted by the Company in pursuance of this application shall be accepted subject to the conditions and agreements contained in such policy. I further agree that no obligation shall exist against said Company on account of this application, although I may have paid premiums thereon, unless said Company shall issue a policy in pursuance thereof, and the same is delivered to me." (Italics supplied.)

The agent was paid the $2.17, and he made out and gave to Mrs. Parker a receipt merely stating that the money was received subject to the terms of the policy to be issued. The receipt contained no provision that the insurance was or was not to be in immediate benefit or that the agent had or did not have authority to enter into an oral contract for insurance. The agent promptly returned the application and the premium to the local Norfolk office of his Company.

On the following Saturday, January 11, 1941, as required by the Company and in accordance with its usual custom, the Norfolk office forwarded Parker's application, and all other applications received during that current week, to the home office of the Company in Washington, D. C, for examination and for approval or rejection of the insurance risk. The examination conducted by the home office usually required a week or ten days.

On January 14, 1941, exactly seven days after the date of his application, and one day after it should have been received in the Washington office, Parker was accidentally killed.

About a week later, Parker's application was subsequently returned to the Norfolk office, marked "Rejected." Mrs. Parker was notified of the rejection, and the Company tendered her the return of the $2.17, which she refused.

The evidence showed that the defendant company did not issue or authorize to be issued interim or binding receipts making insurance effective from the date of the application and payment of the premium; that its policies were dated to be effective as of the date of the issuance of the policy, the premium being credited from that date; and that Sowell was only a special or soliciting agent of the Company authorized to secure applications...