Savage v. Prudential Life Ins. Co. of America

• Citation: 154 Miss. 89,121 So. 487
• Decision Date: 08 April 1929
• Docket Number: 27613
• Court: United States State Supreme Court of Mississippi
• Parties: SAVAGE v. PRUDENTIAL LIFE INS. CO. OF AMERICA et al

121 So. 487

154 Miss. 89

SAVAGE v. PRUDENTIAL LIFE INS. CO. OF AMERICA et al

No. 27613

Supreme Court of Mississippi

April 8, 1929

Division A

1 INSURANCE. Life insurance company was under no duty to write insurance on applicant's life.

As respects necessity of acceptance of application, life insurance company was under no duty under statute or under common law to write insurance on life of applicant.

2. TORTS. There cannot be tort without breach of legal duty. There cannot be tort without breach of legal duty.

3. INSURANCE. Where life insurer was not liable until policy was

delivered and premium paid, recovery against insurer for failing to deliver policies during applicant's life or to notify him within reasonable time of acceptance or rejection held not allowable.

Where application for life insurance provided that insurance company would not be liable until policy had been issued and delivered to insured and premium had been paid therefor, he being in good health, etc., and insurer issued policies on January 10, 1927, calling for larger premium than amount stated in application, but policies were not delivered, and applicant was found dead January 25, 1927, deceased applicant's administrator could not recover from insurance company for negligently failing to deliver policies while applicant was living or to notify him within reasonable time whether his application had been accepted or rejected.

4 INSURANCE. Franchise granted life insurance companies does not impose duty to consider applications promptly.

That insurance companies are granted franchise to do business in state does not impose duty upon them to consider promptly all who offer to them the risk of insuring their lives.

HON. T E. PEGRAM, Judge.

APPEAL from circuit court of Chickasaw county, Second district, HON T. E. PEGRAM, Judge.

Action by W. E. Savage, administrator of the estate of M. L. Abernathy, deceased, against the Prudential Life Insurance Company of America and another. From a judgment for defendants, plaintiff appeals. Affirmed.

Affirmed.

Stovall & Stovall, of Okolona, for appellant.

A combination of two acts of negligence on the part of the defendant was relied upon for recovery in this case: One, the negligent delay in acting upon Abernathy's application and in failing to notify him within a reasonable time whether his application had been accepted or rejected; the other the negligent conduct of defendant's agent in failing to deliver to Abernathy, plaintiff's intestate, within a reasonable time the policies of insurance issued by the defendant company when it did finally act upon his application, though same was accepted for different policies than those applied for. The combination of these two acts of negligence on the part of the defendants prevented the delivery of the policies during Abernathy's lifetime, thus enabling them to claim that no contract of insurance was effected.

The plaintiff had the right to recover for negligent delay in passing upon application for insurance. Duffy v. Bankers Life Association (Ia.), 139 N.W. 1087, 46 L. R. A. (N. S.) 25.

Security Insurance Co. v. Cameron, 85 Okla. 171, 205 P. 151, 27 A. L. R. 444; Columbian National Life Insurance Company v. Lemmons, Administrator, 96 Okla. 228, 222 P. 255; Security Insurance Company of New Haven, Connecticut v. Cameron, 85 Okla. 171, 205 P. 151; Deford v. N.Y. Life Insurance Co. (Colo.), 224 P. 1049.

In the case at bar the defendant company did not require the payment of the premium in advance before it undertook to pass upon Abernathy's application. It impliedly obligated itself to insure the applicant provided he was a suitable subject for insurance.

It is uncontradicted that Abernathy was a suitable subject for insurance. He was ready, willing and able to pay for the policies.

Appellant's position is clearly sustained by the case, of Fox v. Volunteer State Life Insurance Company, 116 S.E. 266.

Trust Co. v. Ins. Co., 173 N.C. 563, 92 S.E. 706; Paul v. Ins. Co., 183 N.C. 159, 110 S.E. 847; Elam v. Realty Co., 182 N.C. 602, 109 S.E. 633, 18 A L. R. 1210; 21 R. C. L. , pp. 844 to 846; Williams v. Lumber Co., 176 N.C. 180, 96 S.E. 950; Boyer v. Ins. Co., 86 Kan. 442, 121 P. 329, 40 L. R. A. (N. S.) 164, Ann. Cas. 1915A, 971, and for unreasonable delay in passing upon an application, Ins. Co. v. Neafus, 145 Ky. 563, 140 S.W. 1026, 36 L. R. A. (N. S.) 1211; Fox v. Volunteer State Life Insurance Co., 119 S.E. 172; Boyer v. State Farmers Mutual Hail Insurance Co. (Kan.), 121 P. 329, 40 L. R. A. (N. S.) 164; Northwestern Mutual Life Insurance Co. v. Neafus (Ky.), 140 S.W. 1026, 36 L. R. A. (N. S.) 1211; Live Stock Insurance Association v. Stickler, 115 N.E. 691; Stearns v. Merchants Life & Casualty Company, 165 N.W. 568; Dyer v. Mo. State Life Insurance Co., 232 P. 346; Wallace v. Hartford Fire Insurance Co. (Id.), 174 P. 1009; Jackson et al. v. New York Life Insurance Co., 7 F.2d 31; Security Ins. Co. v. Cameron, 85 Okla. 171, 205 P. 151, 27 A. L. R. 444.

There are three Mississippi cases, the opinions in which were cited and relied upon by counsel for appellee in the court below as sustaining the action of the trial court in taking the case from the jury by directing a verdict in the present case and will doubtless be presented to this court.

Jacobs v. New York Life Insurance Co., 71 Miss. 658; New York Life Insurance Co. v. McIntosh, 86 Miss. 236; Newark Fire Insurance Co. v. Russell, 107 So. 417.

In each of the above cases the action was one ex contractu and not ex delicto as in the instant case.

Wells, Jones, Wells & Lipscomb and J. Morgan Stevens, all of Jackson, for appellees.

Undisputedly, under the facts in this case, one thing is absolutely certain, to-wit, that never before has there been a recovery in the courts of Mississippi under facts similar to those in case at bar.

There was an offer by way of application for a policy of insurance.

There was a refusal of that application and the policies applied for were not granted.

Other policies with different provisions and for a different premium were written and sent to be offered to the applicant as a counter-proposition.

Before the counter-proposition was presented to the applicant so that he could either accept or refuse the counter-proposition, the applicant was found dead shot in the head with a pistol in his own hand from which the bullets had been fired that ended the life of the applicant.

There was no meeting of the minds. There was no contract in force at the time of the death of the applicant. If there is any proposition of law settled in the jurisprudence of Mississippi, under the above set forth facts, it is this one, that there can be no recovery.

Jacobs v. New York Life Insurance Company, 71 Miss. 658; New York Life Insurance Company v. McIntosh, 86 Miss. 236.

To constitute an insurance contract, the minds of the parties must meet. Insurance Company v. Lumber Co., 94 Miss. 159, 47 So. 551; Insurance Co. v. Wylie, 110 Miss. 681, 70 So. 835; Insurance Co. v. Alexander, 12 So. 25; Insurance Co. v. McIntosh, 86 Miss. 236, 38 So. 775; Newark Fire Insurance Co. v. Russell, 107 So. 417.

In case at bar, it will be remembered that not one cent was paid by the applicant upon the premium for the proposed policy. There was a mere application. Even if it had been accepted by the company, there was no way to force the applicant to accept the policy. He might have declined to have accepted it and pay the premium.

New York Mutual Ins. Co. v. Johnson, 23 Pa. 72.

It is a well-settled rule, established by a great weight of authority, that mere delay in passing upon an application for insurance cannot be construed as an acceptance thereof by the insurer which will support an action ex contractu.

United States--Kohen v. Mutual Reserve Fund Life Ass'n (1886), 28 F. 705; Misselhorn v. Mutual Reserve Fund Life Asso. (1887), 30 F. 545; Equitable Life Assurance Society v. McElroy (1897), 28 C. C. A. 365; 49 U.S. App. 548, 83 F. 631.

Alabama--Alabama Gold Life Ins. Co. v. Mayes (1878), 61 Ala. 163.

Georgia--New York Life Insurance Co. v. Babcock (1898), 104 Ga. 67; 42 L. R. A. 88; 69 Am. St. Rep. 134; 30 S.E. 273.

Idaho--Easley v. New Zeland Ins. Co. (1897), 5 Idaho 593, 51 P. 418.

Illinois--Winnesheik Ins. Co. v. Holzgrafe (1870), 53 Ill. 516, 5 Am. Rep. 64.

Iowa--Winchell v. Iowa State Ins. Co. (1897), 103 Ia. 189, 172 N.W. 503.

Kentucky -- Northwestern Mutual Life Ins. Co. v. Neafus, (1911), 145 Ky. 563, 36 L. R. A. (N. S.) 1211, 140 S.W. 1026.

Maryland--Harp v. Grangers' Mutual Fire Ins. Co. (1878), 49 Md. 307.

Minnesota--Heiman v. Phoenix Mutual Life Ins. Co. (1871), 17 Minn. 153, 10 Am. Rep., 154, Gil. 127.

Nebraska--St. Paul F. & Marine Ins. Co. v. Kelley (1902), 2 Neb. 720 (unof.) , 89 N.W. 997; Handlier v. Knights of Columbus (1911), Neb. , 183 N.W. 300.

New York--More v. New York Bowery F. Ins. Co. (1892), 130 N.Y. 538, 29 N.E. 757; reversing (1890), 55 Hun. 540, 10 N.Y.S. 44.

North Carolina--Ross v. New York Life Ins. Co. (1899), 124 N.C. 395, 32 S.E. 733.

Oklahoma--Van Arsdale v. Young (1908), 21 Okla. 151, 95 P. 778; Dorman v. Connecticut F. Ins. Co. (1914), 41 Okla. 509, 51 L. R. A. (N. S.) 873, 139 P. 262; Shawnee Mut. Fire Ins. Co. v. McClure (1913), 30 Okla. 535, 49 L. R. A. (N. S.) 1054, 135 P. 1150.

Pennsylvania--New York Union Mutual Ins. Co. v. Johnson (1854), 23 Pa. 72; Ryan v. Prudential Ins. Co. (1907), 33 Pa. S.Ct. 364; Ripker v. Mutual F. Ins. Co. (1908), 36 Pa. S.Ct. 517; Somerset County Mutual F. Ins. Co. v. May (1875), 2 W. N.C. 43.

South Dakota--Brink v. Merchants & F. United Mutual Ins. Asso. (1903), 17 S.D. 235, 95 N.W. 929.

Tennessee--Richmond v. Travelers Ins. Co. (1910), 123 Tenn. 307, 30 L. R. A. (N S.),...