Sunset Life Ins. Co. of America v. Crosby, 9127

• Decision Date: 21 March 1963
• Docket Number: No. 9127,9127
• Citation: 85 Idaho 407,380 P.2d 9
• Parties: SUNSET LIFE INSURANCE COMPANY OF AMERICA, a corporation, Plaintiff-Appellant, v. Josephine C. CROSBY, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 9

380 P.2d 9

85 Idaho 407

SUNSET LIFE INSURANCE COMPANY OF AMERICA, a corporation, Plaintiff-Appellant, v. Josephine C. CROSBY, Defendant-Respondent.

No. 9127.

Supreme Court of Idaho.

March 21, 1963.

Richards, Haga & Eberle, Boise, for appellant.

Givens, O'Leary, Doane & Givens, Boise, for respondent.

TAYLOR, Justice.

Plaintiff (appellant) brought this action to obtain a judgment cancelling a life insurance policy issued by it April 8, 1955, insuring the life of Roy C. Crosby in the amount of $5000. The policy lapsed on September 8, 1956, for failure to pay the monthly premium due August 8, 1956. About September 9, 1956, the plaintiff mailed to insured a 'Special Reinstatement Offer' containing the following proposal:

'The past-due payment will still be accepted, however, without interest charge or other requirement if, during the lifetime of the insured(s) and on or before the date shown on the reverse side, the request below is signed and forwarded to the Company with your remittance for the amount past due. * * * 'I hereby certify that the Insured(s) under this policy is (are) now living and request that the accompanying payment be accepted.

Date Signed _____

Signature of Owner of Policy'

In response to this offer, on September 17, 1956, the insured drew his personal bank check in favor of the plaintiff for the amount past due. This check was dated and signed by the insured, and was mailed to the company, together with the special reinstatement application form, on that day. However, the form was neither dated nor signed. Responding to this communication, under date of September 20, 1956, the insurer wrote to insured as follows:

'Think you very much for your remittance of $11.65 which we received today [September 20, 1956].

'Unfortunately, the special reinstatement offer which you returned with your remittance was neither signed nor dated. In order to apply for reinstatement, therefore, we have to ask that the enclosed form be completed and returned.

'May we have this application by return mail, if possible, in order that there may be no delay in restoring the benefits that are yours if reinstatement can be approved? In the meantime, we are holding your remittance on deposit subject to your order. It would also be advisable to forward an additional remittance of $11.65 in order to continue your policy in force in the event of favorable action on your application.'

The application for reinstatement referred to in the letter and enclosed therewith was executed by the insured September 22, 1956. Among other statements and representations made to the company by the insured in the second application for reinstatement was the following: 'that I have taken no aerial flights as a pilot during the past two years' and recited that reinstatement thereunder should be 'upon the express condition that if the foregoing statements be in any respect untrue, said Company shall, for a period of two years from the date of such reinstatement, be under no liability by reason of the attempted reinstatement of the policy,' except for the return of interim premiums. The policy was reinstated October 1, 1956, and all subsequent premiums thereon were paid to and including the period covering July 20, 1958, upon which date the insured died. Thereafter, the defendant beneficiary (respondent) gave plaintiff notice and proof of death and demanded payment of the face amount of the policy.

In its complaint plaintiff alleged that the representation made by the insured that he had taken no aerial flights as a pilot during the two years preceding application for reinstatement was false; that he had taken such flights; that the fact of such flights was concealed from the insurer and that in reinstating the policy the insurer relied upon the representation. In support of the complaint, one, Davidson, a vice-president and actuary of the insurer, testified that had the application for reinstatement revealed aerial flights as a pilot by the insured during the prior two years, the company would have investigated to determine the extent of hazard involved and, depending upon what was developed, would have (1) refused to reinstate the policy; (2) reinstated with a rider excluding protection while the insured was making such flights as a pilot; or (3) issued a policy covering the additional risk with an additional premium appropriate thereto.

By her answer and counterclaim defendant contends that by personally dating and signing his check for the past-due premium and forwarding same to the company with the special reinstatement offer, the insured has effectively complied with the offer; that he made the required showing that he was then living and requested that the payment represented by the check be accepted. Defendant also urged that the second form of application for reinstatement was signed by the insured, but that the blanks therein providing for date and other data having to do with insurability were not filled in; that the application was acted upon by the plaintiff and subsequent premiums accruing thereon were accepted by plaintiff; that plaintiff thereby waived any defect in the application and was estopped to deny its liability on the policy.

The trial court concluded that the dating and signing of his check for the past-due premium and the forwarding of the check with the unsigned form of certificate on the special reinstatement offer within the period fixed by the offer, was an effectual acceptance of the offer and resulted in a reinstatement of the policy, and that the failure of insured to date or sign the form had no material bearing upon the insurability of the insured, or upon the risk assumed by plaintiff.

Judgment was...