Schwartz v. Germania Life Ins. Co.

• Decision Date: 01 January 1873
• Citation: 18 Minn. 404
• Parties: MARY SCHWARTZ v. GERMANIA LIFE INS. CO.
• Court: Minnesota Supreme Court

Page 404

18 Minn. 404

MARY SCHWARTZ

v. GERMANIA LIFE INS. CO.

Supreme Court of Minnesota.

Appeal by defendant from an order of the court of common pleas, Ramsey county, denying a new trial.

Lampreys, for appellant.

Henry J. Horn, for respondent.

BERRY, J.

The principal controversy in this case relates to the law applicable to certain facts with regard to which there is very little difference between the parties.

The defendant is a life insurance company, having its home office in the city of New York, and a local agency in St. Paul, in charge of one Ferdinand Willius. On the first day of September, 1870, the plaintiff made a written application to defendant (through said Willius) for insurance upon the life of Freidolin Schwartz, her husband. The application, among other things, contained statements that "the present state of health" of the party whose life was to be assured was good; that he was not afflicted with any bodily defect; that the state of his health had been good theretofore, and that he had never been afflicted with any serious illness, defect, or personal injury. It also contained the following question and answer, viz.: "Are you aware that this contract of assurance becomes valid only by the payment of the first premium?" Answer. "Yes." The application closed as follows, viz.: "It is hereby declared that the above are fair and true answers to the foregoing questions, and it is acknowledged and agreed by the undersigned that the above statements shall form the basis of the contract for insurance, and also that any untrue or fraudulent answers, any suppression of facts in regard to the party's health, or neglect to pay the premium on or before the day it becomes due, will render the policy null and void, and forfeit all payments made thereon; also, that the policy of insurance hereby applied for shall not be binding upon this company until the amount of premium as stated herein shall be received by said company, or some authorized agent thereof, during the life-time of the party therein insured."

On said first day of September, said Willius, by mail, transmitted to defendant's home office the application inclosed in a letter of that date, the text of which is as follows: "Inclosed please find application of F. Schwartz, $1,000." On September 9th, Willius received from the home office a letter signed by defendant's president, dated September 5th, acknowledging receipt of the application and letter from Willius, and inclosing a policy on the life of Freidolin Schwartz bearing date on said September 5th. This policy is in general in the usual form of policies of endowment insurance. It provides for the payment of annual premiums of $62.88 each, the first to be paid in hand, the rest, respectively, to be paid on or before the fifth day of September in every year during the continuance of the policy. The policy provides further that it is accepted upon the express condition that it shall be of no effect "(1) if the declaration, [evidently referring to the application made by or for the assured,] forming part of the contract, and upon the faith of which this contract is made, shall be found in any respect untrue." "(5) If the above premiums, or any of them, shall not be paid on or before the several days hereinbefore mentioned for the payment thereof respectively, or within three days thereof respectively." Willius offered to deliver this policy to Schwartz upon payment of the premium. Schwartz declined to pay the same in cash, claiming that one Rosenfield, a solicitor in the employ of Willius, had agreed to take the premium in whole or in part in board, which, however, such solicitor had no authority to do. The policy was not delivered, but at the request of Schwartz was returned on October 13th to the home office, with the request that it be changed for another policy providing for semi-annual instead of annual payments. On October 25th Willius received a letter from the home office acknowledging receipt of the returned policy, and of his letter requesting the above-mentioned change to be made, and inclosing another policy, like the first in all respects, save that it provided for the payment of semi-annual premiums, $32.07 in hand, and $32.07 "to be paid on or before the fifth day of March and September in every year during the continuance of the policy." At the foot of each policy was a note as follows, viz.: "Agents holding an appointment from the company are authorized to receive premiums at or before the time when due, upon the receipt of the president or secretary of the company, but not to make, alter, or discharge contracts, or waive forfeitures."

On October 13th, Freidolin Schwartz was attacked with a dangerous illness, of which he died on October 29th. On October 25th, after the arrival of the second policy, plaintiff went to the office of Willius, inquired for the policy, and was informed that it had come. Upon asking if she could have it she was told that she could not because her "husband was taken sick." Thereupon, having requested that the premium money be taken, which was refused on the ground that her "husband was sick," she tendered the premium money, but defendant's agent refused to receive it for the sole reason that her "husband was sick." The second policy was never delivered nor offered to be delivered to plaintiff or her husband, and about the first of November was returned to defendant's home office at defendant's request.

On the eighteenth of March, 1871, proofs of the death of Freidolin Schwartz and of plaintiff's claim under the policy were transmitted by Willius to the home office. There was testimony in the case not contradicted and tending to show that defendant's general instructions to Willius were to deliver policies on payment of the premium, provided the person whose life was to be insured was in health at the time of such delivery. There is no evidence going to show that these instructions were known to the plaintiff.

Plaintiff's counsel takes the position that these facts make out an acceptance by defendant of a proposition by plaintiff, the effect being to conclude "a contract of insurance between the parties according to the terms proposed." What is said in Heiman v. Phœnix Mut. L. Ins. Co. 17 Minn. 153, (Gil. 127,) would seem to be in point here. "The application for insurance is a mere proposal on the part of the applicant. When the insurer signifies his acceptance of it to the proposer, (and not before,) the minds of the parties meet and the contract is made. This acceptance must be signified by some act." Plaintiff's application is properly characterized as a proposition to defendant; and when Willius (defendant's agent) offered the first policy to Schwartz, (who appears to be regarded by common consent as acting for the plaintiff as well as for himself in the whole business,) upon payment of the first premium, defendant thereby signified its acceptance of plaintiff's proposition. In other words, defendant thereby offered to insure the life of Freidolin Schwartz by delivering to plaintiff its policy of insurance upon prepayment of the first premium in hand. But this payment was refused. This was a refusal by plaintiff to comply with the terms of her own proposition. It was a repudiation of the proposition — a rejection of the proffered acceptance, and, in effect and and fact, a refusal to receive the policy at all.

Plaintiff having thus repudiated her own proposition, and refused to comply with the condition upon which the defendant signified its acceptance of her proposition...