Schwartz v. Germania Life Insurance Co.

• Decision Date: 11 January 1875
• Citation: 21 Minn. 215
• Parties: MARY SCHWARTZ <I>vs.</I> GERMANIA LIFE INSURANCE COMPANY.
• Court: Minnesota Supreme Court

Page 215

21 Minn. 215

MARY SCHWARTZ vs. GERMANIA LIFE INSURANCE COMPANY.

Supreme Court of Minnesota.

January 11, 1875.

Action on a policy of insurance in favor of plaintiff, upon the life of her husband, Fridolin Schwartz. The decision upon a former appeal is reported, 18 Minn. 448, a new trial being granted. At the second trial in the court of common pleas for Ramsey county, before Hall, J., it appeared that on September 1, 1870, the plaintiff made application to defendant's agent at St. Paul, one Ferdinand Willius, for insurance to the amount of $1,000 upon her husband's life. In answer to the questions contained in the printed form of application, the plaintiff stated therein that her husband's present state of health was good; that he was afflicted with no bodily disease; that his health had up to that time been good; that he had never been afflicted with any serious illness, defect or personal injury; and that she was "aware that this contract of insurance becomes valid only by the payment of the first premium." The application provided that the statements contained in it should form the basis of the contract, and that the policy applied for "shall not be binding on the company until the amount of the first premium, as stated herein, shall be received by the company, or by some authorized agent thereof, during the lifetime of the party therein insured;" but it contained no agreement or warranty on the part of the applicant that her husband should continue in good health, nor any condition by which the validity of the contract was made to depend on the state of his health at any time subsequent to the application. The agent sent the application to the principal office of the company in New York, and received in return a policy bearing date September 5, 1870, which plaintiff declined to accept; and it was then agreed between her and the agent that the policy should be changed so as to provide for payment of premiums semi-annually, instead of annually. On October 13, the agent returned the policy to the company, that the change might be made. On October 18, a new policy, bearing date September 5, purporting to be issued on the application of September 1, and to be signed by the president and secretary of the company, was sent by mail from the New York office to the agent in St. Paul. This policy provided for a semi-annual payment of premium, as desired by plaintiff, and contained a condition that it should be void, "1. If the declaration made by or for the said assured (the same bearing date September 1, 1870, forming part of this contract, and upon the faith of which this contract is made,) shall be found in any respect untrue."

On October 13, Fridolin Schwartz was attacked by a dangerous disease of which he died on October 29. On October 25, the second policy having been received by the agent, plaintiff went to his office, and was informed by him that it had come. She then asked for the policy, and tendered the amount of the first premium; but the agent refused to receive the premium, or deliver the policy, on the ground that her husband was sick. The second policy was never delivered to plaintiff, but was soon afterwards returned to the New York office, at defendant's request. The necessary proofs of Fridolin Schwartz's death, and of plaintiff's claim under the policy, were made and served upon defendant.

The agent, Ferdinand Willius, and his brother testified as to instructions from the company in regard to the delivery of policies when the person whose life was insured was not in good health at the time the delivery was asked. The jury found for the plaintiff; a new trial was refused, and the defendant appealed.

Morris Lamprey, for appellant.

H. J. Horn, for respondent.

YOUNG, J.

Upon the former appeal in this action, (18 Minn. 448,) it was determined that by the execution of the second policy, and its transmission from the home office at New York to the company's agent at St. Paul, the company, defendant, signified its acceptance of the plaintiff's application for insurance upon the life of her husband, Fridolin Schwartz. If upon the receipt of the policy, and down to the time when the plaintiff tendered the premium and demanded the policy, the agent had no other authority or duty in the matter than simply to deliver the policy on payment of the first premium, then the defendant's acceptance was conditional upon such payment alone. The tender by the plaintiff on October 25, being legally equivalent to a payment, was a performance of this condition; and thereby a contract of insurance, according to the terms of the policy, was effected between the parties, notwithstanding the refusal of the agent to deliver the policy. But if, by general or special instructions from the company, the agent was not authorized to receive the premium, or deliver the policy, unless the person insured was in good health at the time, then the acceptance signified by the transmission of the policy to the agent, was conditioned upon the state of health of the person insured at the time for delivery of the policy. And as Fridolin Schwartz was dangerously ill, and near his end, at the time the plaintiff tendered the premium and demanded the policy, the agent was justified in his refusal to deliver the one or receive the other, for the condition of the defendant's acceptance was not complied with. In that case no contract was ever concluded between the parties, and the plaintiff has no cause of action against the defendant.

At the second trial, the company attempted to prove the existence of such instructions, by the parol testimony of Ferdinand Willius, its agent, and of Gustav Willius, his brother. No counter-evidence of any kind was offered by the plaintiff on this point, but the jury found a verdict in her favor. The principal question on this appeal is whether the verdict can be sustained, in the face of the evidence for the defendant. Ferdinand Willius, after stating that he had been the company's agent, with restricted authority, for ten years, testified on this point as follows: "I did (have instructions) to deliver the policy, only upon payment of the premium, and provided the parties were in good health at the time; if not in good health, a new examination by a physician must be made; I am positive I had these instructions from the company; I have always acted under them during all my agency. Gustav is my brother. In 1870, we were in business together, and are still. He knew of my instructions from the company, and I suppose he acted under them." On cross-examination, he said, "The instructions, I suppose, were in print: they may have been verbal: they may have been in writing. We have had six different sets of instructions of that kind in print. I have been hunting for printed instructions, but cannot find them; must have been verbal. Have had printed instructions so long as I have had the agency. These printed instructions have been changed by other printed instructions, perhaps half a dozen times during the agency; couldn't say for certain how many times; couldn't tell when they were last changed; believe I received some new instructions and blanks about four weeks ago; could not tell when the next one before was made; some of printed instructions related to the manner and circumstances under which the policies were to be delivered. I have searched among the papers for these printed instructions — searched this morning, and about a week ago. Think I could find two of the previous instructions which were sent prior to the last. The old instructions were generally destroyed when the new ones were received. I don't find the instructions which relate principally to this case. I suppose the instructions under which I acted in refusing to deliver this policy were printed; but printed instructions are sometimes explained and defined in writing or verbally. I have not the printed instructions under which I acted in refusing to deliver the policy in question. I have looked for them without being able to find them." On his re-direct examination, he said, "I made search for those printed instructions in my office, where they ought to be; I searched this morning, and about a week ago, among my papers, where these instructions ought to be; I searched thoroughly. I wouldn't say for certain whether I had these instructions verbally or in print; my impression was they were in print. Don't recollect whether the instructions in this case were accompanied by any written communication; there were no special instructions accompanying the second policy, except such as were found in the letter accompanying it; there were...