Rapp v. Lester L. Burdick, Inc.

• Decision Date: 04 December 1957
• Citation: 146 N.E.2d 368,336 Mass. 438
• Parties: William G. RAPP, Administrator, and another, v. LESTER L. BURDICK, Inc., and another.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 368

146 N.E.2d 368

336 Mass. 438

William G. RAPP, Administrator, and another, v. LESTER L. BURDICK, Inc., and another.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Oct. 8, 1957.

Decided Dec. 4, 1957.

Lester S. Cramer, Boston, for plaintiffs.

Myer Z. Kolodny, Boston, for defendants.

Before WILKINS C. J., and WILLIAMS, COUNIHAN, WHITTEMORE and CUTTER, JJ.

WHITTEMORE, Justice.

This is an action in contract or tort, tried to a judge without a jury, to recover the fact amount of an accident and health insurance policy. The action is brought estate of the named insured and by the chief beneficiary named in the policy. The defendants are the alleged insurer and its general agent in Boston.

The declaration states a count in contract against the agent for breach of an agreement to act promptly to cause the issuance of the policy and a count in tort for negligent failure to do so. There are like counts against the company. The fifth count asserts the claim of the beneficiary under the policy.

The trial judge found for the defenants on all the counts and made findings of material facts. The case is here on the plaintiffs' exceptions to action on requested rulings and to the denial of a motion to vacate the findings are for a rehearing.

The findings of material facts may be summarized as follows: The policy was applied for by one Charles Bernstein on November 16, 1950, and issued on January 2, 1951. Berstein died on January 1, 1951, as a result of an automobile accident (which by the death certificate, in evidence, occurred on December 30, 1950). He was one of six hundred eighty members of the Advertising Club of Boston, a group which had been solicited by the agent to purchase insurance contracts. 'The agent had full authority to act for the company in the solicitation and procurement of business and writing of insurance policies for the company.' The agent furnished printed application forms. No physical examination was required. 'Upon receipt of applications they would be looked over by the agent, and unless further information was required * * * would be sent to the home office of the company in New Jersey for the issuance of the policy and for the policy to be sent to the agent in Boston to be countersigned.' No additional information was required of the deceased. 'The agent did not send the application of the deceased to the company until December 14, 1950. I am unable to find what caused this delay, but I do find that it was not due to anything which the deceased did or failed to do; nor * * * by waiting for the receipt of the required minimum of applications. I do not find that the unexplained delay constitutes negligence ¹ on the part of the agent or of the company.' The issuance of the policy on January 2, 1951, was within a reasonable time of the receipt of the application from the agent. The agent countersigned it on January 2, 1951. Payment of the premium, attempted after the death of the deceased, was refused by the company. 'I do not find that the requirement of the payment of the premium was waived or that credit was extended therefor. I do not find that there were any express or implied promise[s] or representations made by the agent or the company that the policy would be issued other than what appears from the application and policy.'

The president of the agent corporation testified that 'Generally it was the practice that when an application was received, two weeks usually elapsed for the purpose of transmitting it to the home office in Newark, New Jersey, for their consideration.' The broker who acted for the agent in the sale of policies to the Advertising Club testified that when he left the application with the deceased he 'urged upon * * * Bernstein to fill out his application and get it paid for, the quicker it would be in effect so that he would have coverage in February * * *.'

In the application the deceased answered 'Yesh to the following question: 'Do you understand that this application is subject to acceptance by the Commercial Casualty Insurance Company, Newark, N. J., and that the insurance hereby applied for will not be effective unless you are regularly attending all of the usual duties of your occupation on the countersignature date of the policy?'

The policy provided that it is 'In consideration of the statements in the application * * * and the payment of the pro rata premium of twenty-seven and 30/100 dollars * * *.'

The action on the requests for rulings shows an acceptance of the plaintiffs' theories of the law, and an intention to base the decision for the defendants on conclusion of fact. By granting requests numbered 1 through 5 the trial judge ruled as to each count that 'There is sufficient evidence to warrant recovery by the plaintiffs.' He also granted request numbered 35 reading, 'Upon the receipt * * * of the application * * * after active solicitation therefor * * * [the agent] assumed a duty to the applicant to act upon it with reasonable promptness.'

In our view, for reasons hereinafter stated, a finding for the defendant under each count was required as matter of law. It is unnecessary therefore to resolve the asserted inconsistencies in the findings and rulings, or to consider the motion to vacate the findings and for rehearing.

The terms of the application and the policy, and the facts found and not controverted in the evidence, establish that there was no written or oral contract for insurance or temporary insurance in effect at any time, and no basis for recovery under count 5. Badger v. American Popular Life Ins. Co., 103 Mass. 244; Markey v. Mutual Benefit Life Ins. Co., 118 Mass. 178, 194; Myers v. Liverpool & London & Globe Inc. Co., 121 Mass. 338; Dunham v. Morse, 158 Mass. 132, 133, 32 N.E. 1116; Allen v. Massachusetts Mutual Accident Association, 167 Mass. 18, 19, 44 N.E. 1053; Cunnigham v. Connecticut Fire Ins. Co., 200 Mass. 33, 86 N.E. 787; Cauman v. American Credit Indemnity Co., 229 Mass. 278, 284, 118 N.E. 259; Ansin v. Mutual Life Ins. Co., 241 Mass. 107, 110, 134 N.E. 350; Gabbett v. Connecticut General Life, Inc. Co., 303 Mass. 433, 435, 21 N.E.2d 950; Earle C. Dodds Inc. v. Boston Casualty Co., 308 Mass. 124, 127, 31 N.E.2d 7; Krause v. Equitable Life Ins. Co., 333 Mass. 200, 203, 129 N.E.2d 617. Compare DeCesare v. Metropolitan Life Ins. Co., 278 Mass. 401, 180 N.E. 154, 81 A.L.R. 327; Parkway, Inc. v. United States Fire Ins. Co., 317 Mass. 428, 58 N.E.2d 646. This is so even if advance payment of the premium was waived, and we do not discuss the exceptions which relate to that issue nor have we stated the evidence which the plaintiffs assert required a ruling that payment of the premium had been waived.

Turning to the alternative contentions under counts 1 through 4, we are unable to accept the view which finds support in a number, perhaps a slight majority, of the jurisdictions where the issue has been decided, ² that unreasonable delay in acting on an application for insurance gives rise to a right in tort or, as some cases suggest, in implied contract. The principles involved have been discussed at length and there is no occasion for extended review on the facts before us. Cases in which the existence of an insurance contract could have been found as a fact (see DeCesare v. Metropolitan Life Ins. Co., 278 Mass. 401, 180 N.E. 154, 81 A.L.R. 327, and cases cited) or which present special...