Provident Sav. Life Assur. Soc. of New York v. Hadley

• Decision Date: 24 April 1900
• Docket Number: 285.
• Citation: 102 F. 856
• Parties: PROVIDENT SAVINGS LIFE ASSUR. SOC. OF NEW YORK v. HADLEY,
• Court: U.S. Court of Appeals — First Circuit

102 F. 856

PROVIDENT SAVINGS LIFE ASSUR. SOC. OF NEW YORK v. HADLEY,

No. 285.

United States Court of Appeals, First Circuit.

April 24, 1900

[Copyrighted Material Omitted]

Robert M. Morse (William T. Gilbert and Thomas F. Desmond, on the brief), for plaintiff in error.

Alfred Henenway (Arthur J. Selfridge, on the brief), for defendant in error.

Before COLT, Circuit Judge, and WEBB and ALDRICH, District Judges.

ALDRICH District Judge.

Hadley to whom the five $5,000 20 year life insurance bonds in suit were issued, was a citizen of Massachusetts, and on the 2d day of January, 1897, being in New York, applied to the Provident Savings Life Assurance Society of New York for insurance upon his life, and the insurance described in his application as that desired was $25,000. Among the printed questions in the application addressed to the applicant was the following: 'State here the exact kind of policy or policies desired. ' To this Hadley answered 'Twenty-year endowment bond.' Parts 1, 2, and 3, the usual forms of application used by that company, were filled out and executed; and in the usual course of the business the applicant was examined, and informed that he had passed the medical department. The first premium was not paid, but it was understood that the 20-year endowment bond was to be filled out and forwarded to Hadley at his home in New Bedford, Mass. Thus the matter stood until January 9, 1897, when the secretary of the company inclosed the five policies, of $5,000 each, which are in suit, saying:

'Enclosed we hand you bond policies numbers 80,932-3-4-5-6, on your life, aggregating in amount $25,000, in accordance with your application made a few days ago at this office. We have been obliged to issue this insurance in separate policies, for the reason that our bonds are engraved only in amounts of one thousand dollars or five thousand dollars. * * * If, after inspection, they are found in all respects satisfactory, please send check for $847.50, the total of the five semiannual installments of $169.50 each.'

The question as to the place of contract,-- whether New York or Massachusetts,-- and the question whether the New York or the Massachusetts law should govern the contracts, were very elaborately and ably discussed by counsel at the arguments; but it seems to us, after all, that the problem presented may be solved upon simple grounds, and that we need not determine whether the variance between the application executed in New York, which called for a single $25,000 'twenty-year endowment bond' as 'the exact kind of policy * * * desired,' and the five $5,000 endowment bond finally delivered in Massachusetts was of sufficient substance to operate, in and of itself, to open what had been done in New York, and to carry the act of final completion to Massachusetts, for the simple reason that the company, in its communication through its secretary, who, it must be presumed, acted upon authority, treated the contract as incomplete, and left its approval and acceptance and completion at the option of the party in whose favor the five $5,000 policies were written, thus leaving the final act of acceptance and payment to be performed in Massachusetts. While the general plan of insurance offered by the company in New York was accepted, the particular and literal form finally offered for approval and acceptance in Massachusetts, and the particular form which became the contract, was neither offered nor accepted in New York, nor until the particular form was received in Massachusetts on January 9, 1897, which was subsequently accepted and paid for in that state. So we have no hesitation in saying there was no error at the trial in treating the contract as a Massachusetts contract. It is true that Hadley made no point of the variance, and that he subsequently forwarded a check for the amount in question. Nevertheless the new condition involved in the different kind of policies was submitted to him for his rejection or approval and acceptance, and, that having been done, it is quite immaterial whether the option was acted upon one way or the other. It is not a question as to how he acted, but whether something was left open to be acted upon. Moreover, quite aside from the question whether by reason of the fact that the application was not attached to the policy, it is or is not to be treated as a part of the final contract, the statements which it contains may be considered upon the question whether the contract was a complete and binding contract in New York on the 2d of January, 1897, or whether it was incomplete and not binding until the final act of approval and acceptance and payment in Massachusetts on some day subsequent to January 9, 1897; and it is expressly provided in part 1 of the application that the insurance applied for shall not become binding upon the society until the first premium thereon has been actually received by said society, and as the act of payment, as well as the act of approval and acceptance, was performed in Massachusetts, the policy must be deemed to be a Massachusetts contract. Society v. Clements, 140 U.S. 226, 232, 11 Sup.Ct. 822, 35 L.Ed. 497; Insurance Co. v. Robinson (C.C.) 54 F. 580, 583.

The question whether the rights of the parties should be administered under New York law or under Massachusetts law is deemed material by the parties, for the reason that the New York law is supposed to be less favorable to the policy holder than that of Massachusetts; but we understand it to be well settled that where rights are in dispute, and are being adjudicated in the state where the contract is closed, such dispute is to be determined according to the law of that state. The conditions upon which a given state may permit insurance companies to do business therein may properly enough become a part of the public policy of such state. And the supreme court of Massachusetts has frequently and recently upheld and sustained the legislative policy of Massachusetts as declared in respect to regulating the conditions under which insurance companies shall do business in that state. Nugent v. Association, 172 Mass. 278 283, 52 N.E. 440; Considine v. Insurance Co., 165 Mass. 462, 43 N.E. 201. The statutes of Massachusetts (Acts 1894, c. 522, Sec. 73) declare that every policy which contains a reference to the application for insurance must have attached thereto a correct copy of the application, and that unless the application is attached it shall not be treated as a part of the policy. This statute is sustained by the authorities cited, as well as others. Similar statutes in other states have been sustained, but with that we have nothing to do here. It is quite sufficient to ascertain the law of Massachusetts on the subject, and whether this court, sitting in Massachusetts and enforcing a Massachusetts contract, should be governed by the law of that state; and as to this proposition the law seems to be well settled that the Massachusetts statute, as interpreted by the highest court of that state in respect to a question of this kind, should govern. Fairfield v. Gallatin Co., 100 U.S. 47, 25 L.Ed. 544; Taylor v. Ypsilanti, 105 U.S. 60, 26 L.Ed. 1008; McElvaine v. Brush, 142 U.S. 155, 12 Sup.Ct. 156, 35 L.Ed. 971; Merchants' & Manufacturers' Nat. Bank v. Pennsylvania, 167 U.S. 461, 17 Sup.Ct. 829, 42 L.Ed. 236; Wilson v. North Carolina, 169 U.S. 586, 592, 18 Sup.Ct. 435, 42 L.Ed. 865. Therefore there was no error below in directing the trial upon the lines of a Massachusetts contract and of the Massachusetts law. The case of Nugent v. Association, 172 Mass. 278, 280, 281, 52 N.E. 440, and other Massachusetts cases, certainly go to the extent of treating the application as no part of the contract where it is not attached to the policy as required by the statutes. The Massachusetts statute neither discriminates in favor of Massachusetts insurance companies, nor against foreign insurance companies, but is sweeping in its provision that every policy which contains a reference to the application of the insured, either as a part of the policy or as having any bearing thereon, must have attached thereto a correct copy of the application, and, unless so attached, the same shall not be considered a part of the policy. In view of this statute and the Massachusetts decisions, we have no hesitation in holding that it applies to any insurance contract which under the circumstances of the case in question, is an insurance contract which was entered into in Massachusetts, and that, in accordance with the judicially interpreted statutes of Massachusetts, the court below properly refused to submit the application to the jury as a part of the contract, and as containing warranties. Yet, notwithstanding the fact that the application was not treated as a part of the contract, the circuit court, under the common-law rule, permitted the application to be used in evidence by the company, not as a part of the policy or as an application, but as showing representations made by Hadley, and as bearing upon the issue whether the insurance company was influenced to enter into the contract by false and material misrepresentations, of a character intended to deceive. The plaintiff below maintains in argument here that under the statutes of Massachusetts, and Considine v. Insurance Co., 165 Mass. 462, 43 N.E. 201, Boyden v. Association, 167 Mass. 242, 45 N.E. 735, and Nugent v. Association, 172 Mass. 278, 281, 52 N.E. 440, the application, not having been attached to the policy, was inadmissible as evidence for any purpose whatever, and therefore that the defendant below had no right to introduce it for the purpose of showing what was said by the insured. We do not pass upon the question whether the statutes or the decisions of the state...