Provident Sav. Life Assur. Soc. v. Elliott's Ex'r

• Decision Date: 01 June 1906
• Parties: PROVIDENT SAVINGS LIFE ASSUR. SOC. OF NEW YORK v. ELLIOTT'S EX'R.
• Court: Kentucky Court of Appeals

93 S.W. 659

PROVIDENT SAVINGS LIFE ASSUR. SOC. OF NEW YORK v. ELLIOTT'S EX'R.

Court of Appeals of Kentucky.

June 1, 1906

Appeal from Circuit Court, Daviess County.

"Not to be officially reported."

Action by John D. Elliott's executor against the Provident Savings Life Assurance Society of New York. From a judgment in favor of plaintiff, defendant appeals. Reversed and remanded.

Wm. T Gilbert, W. T. Ellis, and Wm. Marshall Bullitt, for appellant.

Miller & Todd and C. S. Walker, for appellee.

SETTLE J.

The appellee, Wm. Elliott, executor of the estate of John D Elliott, deceased, sued the appellant, Provident Savings Life Assurance Society of New York in the Daviess circuit court upon two policies of life insurance of $25,000 each. The trial resulted in a verdict and judgment in appellee's favor for $1,129.40, being the amount claimed on the installment and principal plan as due upon the policies at date of suit, less an annual premium of $120 unpaid on the policies, and, the lower court having refused appellant a new trial, it has appealed.

It appears from the record that John D. Elliott, at the time a resident of the city of Owensboro, by the procurement of one S. C. Walker, then a soliciting agent of appellant, on December 4, 1902, signed a written application in printed form for a $25,000 policy of insurance on the "installment and principal" plan, payable $625 per year for 20 years, and a further sum of $12,500 at the end of the 20 years. Just after Elliott's application was signed, but in his absence, Walker, the soliciting agent, induced R. W. Thomas, Elliott's bookkeeper, to take a $10,000 policy with the appellant company on the same plan, and a written application therefor, of the same form as that used by Elliott, was then signed by Thomas. Each of these applications contained the following questions: "Do you wish to reserve the right to change the beneficiary at any time if the policy be not then assigned? (Yes or No.)" Elliott and Thomas each answered that question "yes." After the application of Elliott was received. Walker wrote at the foot thereof these words: "Issue additional $25,000.00." Though these words were not written by Walker in the presence of Elliott, and were never seen by him, we think it may fairly be inferred from the evidence that the latter agreed to take the additional $25,000 or $50,000 altogether; but it was shown by the evidence that he signed but the one application, and that, too, before the request for the additional $25,000 was entered upon the application. The applications of Elliott and Thomas were at once forwarded by Walker to appellant's state agents, Carter and Castleman, at Louisville, and by them to appellant's New York office, where they were received, December 8, 1902. On the night of December 4, 1902, Drs. Heavrin and Watkins, appellant's Owensboro medical examiners, examined Elliott and Thomas, and each sent a report thereof to the New York office. That of Dr. Heavrin reached that office December 11th and that of Dr. Watkins on the 15th. Dr. Watkins' report had been earlier received, but was returned to him for correction, as he had omitted therein to recommend Elliott as a suitable risk, or sign the report. December 15th appellant's board of medical directors in New York examined the reports of Drs. Heavrin and Watkins, and approved them as to Elliott, for $50,000 of insurance, and also as to Thomas for the $10,000 applied for by him, which was indicated by their initials on the back of the reports. The applications and reports were then referred for final action to appellant's board of executive officers, who alone could decide whether to accept or reject the applications. It was discovered by Stevens, secretary of the executive board, that both Elliott's and Thomas' applications contained two defects, which, according to the rules of the company, made their rejection imperative. The first defect was that in the applications they had answered "Yes" to the question "do you wish to reserve the right to change the beneficiary"; whereas, the right to change the beneficiary was not allowed under the particular form of policies applied for. The second defect was that no application had been made by Elliott for the additional $25,000 insurance; whereas, under the rules of the company a separate application was required for such additional insurance. Because of these defects it is claimed by appellant that it, through its executive board, declined to approve any application for insurance on Elliott's life, either for the $25,000 actually applied for, or the additional $25,000 indorsed by the soliciting agent, Walker, at the foot of the application, and that both were in fact rejected; also that it refused to approve the application of Thomas.

It is, however, admitted by appellant that it was willing to insure both Elliott and Thomas, if their request therefor should be renewed by other written applications; those of Elliott for two policies of $25,000 each, and that of Thomas for $10,000, all containing a negative answer to the question in respect to the change of the beneficiary. And it is further claimed by appellant that, acting upon the belief that Elliott and Thomas would renew their applications, and wishing to avoid the delay of forwarding proper forms of application to its Kentucky agents, to be signed by them, and returned to the home office, Stevens, appellant's secretary, on December 19, 1902, had two policies prepared in advance for Elliott for $25,000 each, and serially numbered 133,448 and 133,449, and at the same time one for $10,000 for Thomas; that to each of these policies was attached, as required by the laws of Kentucky and the rules of the insurance company, a copy of an application like the form of one signed by Elliott, except that the question as to the change of beneficiary was answered "No," instead of "Yes." That on December 19, 1902, these policies as thus prepared, with the applications attached, designed as a proposition to Elliott and Thomas to insure them for the amounts named in the policies respectively, were forwarded by mail to appellant's state agents at Louisville, Carter and Castleman, with instructions to cause Elliott and Thomas to sign the applications, if they still desired the insurance, and not to deliver the policies until the applications were signed. The letter to the agents transmitted with the policies was read in evidence. The letter and policies with the attached applications arrived in Louisville Sunday, December 21st, but, as no mail was delivered that day, they did not reach the hands of Carter and Castleman until Monday morning, December 22, 1902, at which time Elliott was dead. Elliott became suddenly and violently ill on Wednesday, December 17th, two days before appellant's executive board considered his application for insurance. On Saturday, December 20th, at midnight, he was operated on for appendicitis, and on Sunday, December 21st, died. His illness therefore began two days after the report of Dr. Watkins on his examination reached appellant's chief office in New York. He was violently ill when the report of his examination by the Owensboro physicians was passed by appellant's New York board of medical examiners to its executive officers, and dead when the policies and applications mailed by the secretary to appellant's Louisville agents reached their hands on December 22d. No notice of his illness was given appellant or its Louisville agents, and they did not in fact learn of it until after his death, though Thomas, Elliott's bookkeeper, called up Carter and Castleman by telephone Saturday, and again on Sunday. The conversation on Sunday occurred after Elliott's death, and Thomas then wanted to know if they had received the policies, yet said nothing to them about Elliott's death, but urged that they forward the policies, offered to send a check for the premium, and threatened if they did not send them at once he and Elliott would apply for insurance in another company. The one application signed by Elliott contained a provision that the appellant "shall incur no liability under this application until it has been received, approved and a policy issued thereon and the premium actually paid *** during my [Elliott's] lifetime and good health."

We will not undertake to discuss the voluminous pleadings, or to define the various issues they present, deeming it only necessary to indicate the contentions of counsel respectively, that we may think pertinent to the questions raised by the pleadings and evidence. It is insisted for appellant that no contract of insurance was made by it with Elliott; that there was no meeting of the minds of the parties, and, though the policy designed for Thomas was delivered upon his signing the new and corrected application and paying the premium, it was shortly thereafter canceled; that the written application made by Elliott was for only one policy, and insufficient for that; that the words "issue additional $25,000.00" written therein by the agent did not make it an application for a second policy for that amount, and was, besides, unauthorized by appellant; that the application for insurance made by Elliott was rejected, and the counter proposition made by it to Elliott was never accepted by him; and that, if the contract had been otherwise completed, the fact that Elliott was not in good health or alive at the time the premium should have been paid, and appellant might have delivered the policies, prevented the full consummation of the contract before it incurred any liability. Upon the other hand, it is contended for appellee that the contract was completed; that according to its terms appellant agreed with Elliott that, upon its acceptance of his application for...