Unterharnscheidt v. Mo. State Life Ins. Co.

• Decision Date: 18 November 1912
• Citation: 160 Iowa 223,138 N.W. 459
• Parties: UNTERHARNSCHEIDT v. MISSOURI STATE LIFE INS. CO.
• Court: Iowa Supreme Court

160 Iowa 223

138 N.W. 459

UNTERHARNSCHEIDT

v.MISSOURI STATE LIFE INS. CO.

Supreme Court of Iowa.

Nov. 18, 1912.

Appeal from District Court, Woodbury County; David Mould, Judge.

Action at law upon a policy of life insurance. Trial to jury, verdict and judgment for plaintiff, and defendant appeals. Affirmed.C. R. Jones, of Sioux City, for appellant.

E.E. Gill, of Sioux City, and Robert B. Pike, of Whiting, for appellee.

WEAVER, J.

The policy in suit is alleged to have been issued by the defendant upon the life of plaintiff's husband, who, it is claimed, died while the insurance so provided was still in force and effect. The defenses relied upon as stated in appellant's brief are: (1) That the premium on said policy was never paid, and therefore the contract of insurance never became of any binding force or effect; and (2) that there was never any sufficient delivery of the policy. The testimony in the case is quite brief and to a considerable extent undisputed. Of the facts admitted or of which there is some support in the record, the following are most material: On June 17, 1910, Louis Unterharnscheidt, residing at Sioux City, Iowa, made and delivered to W. C. Kinzer, resident agent for the defendant at that place, an application for insurance in that company to the amount of $1,000, which application was soon thereafter forwarded to the defendant at its home office. It was also accompanied by a physician's report of the medical examination of the applicant showing him then to be in good health. This application, as executed by the applicant, shows his agreement to pay a yearly premium of $68.63 in semiannual installments. Among the questions answered in the application was the following: “(15) Has the premium for the first policy year been paid in advance? A. No; (a) cash $5; (b) note or notes $30.70 due July 17, 1910.” Certain agreements were also embodied in the application, among which was the following: “(7) That the insurance hereby applied for shall not take effect unless the premium is paid and the policy delivered to and accepted by me during my lifetime and good health, and that then the first policy year shall end on such date as may be fixed by the company in the policy.” At the time of making the application, the applicant paid the agent $5 in money and made and delivered to him two notes as follows: “$33.68. Sioux City, Ia., June 17, 1910. Ninety days after date, for value received, I promise to pay to the order of myself thirty-three & 68/100 dollars, at Sioux City, Iowa, with interest at the rate of 6 per cent. per annum from date. Louis Unterharnscheidt.” “$30.00. Sioux City, Ia., June 17, 1910. Thirty days after date, for value received, I promise to pay to the order of myself thirty & no/100 dollars, at Sioux City, Iowa, with interest at the rate of six per cent. per annum from date. Louis Unterharnscheidt.” For the payment thus made or provided for, the agent then and there gave to the applicant a receipt in these words: “Missouri State Life Insurance Company of St. Louis. Amount received in cash, $5.00. Dated at Sioux City, Iowa, this 17th day of June, 1910. Received of Louis Unterharnscheidt, the sum of $5.00 cash, dollars, and 2 notes for $30.00 & $33.00, dollars for (insert one, two, or three) the first annual premium required on an application for $1,000.00 insurance on the life of Louis Unterharnscheidt, herein named the applicant, in the Missouri State Life Insurance Company of St. Louis, subject to the terms and conditions of said application. In case the application is not approved by the home office, the amount first named herein, together with notes, if any, shall be promptly returned. [Signed] W. C. Kinzer, Gen. Agent.”

The application was approved by the company. A policy such as was contemplated in the application was issued July 8, 1910, and registered on the following day in the insurance department of the state of Missouri. It was then mailed to the agent, Kinzer, for delivery to the insured. Accompanying this policy was a letter or form of instructions to the agent not to make the delivery “unless settlement has been received and applicant in good health.” The letter bears date July 19, 1910, but it was not registered. Kinzer appears to have left Sioux City on July 15, 1910, and did not return until August 7, 1910. He left no one in charge of his business while absent from the city, and the letter inclosing the policy, which in due course of mail would reach there not later than July 20, 1910, was delivered at his office remaining there unopened until his return as above indicated. The insured died August 2, 1910. Concerning the date when he was attacked by the fatal illness, there was no medical or expert testimony. The evidence was such, however, as to indicate that, while he was not feeling entirely well on July 16th and some days thereafter, he exhibited no indications of serious ailment or disease until July 23d, prior to which time he was about his home assisting in some degree with the work of the family. Concerning what occurred between the applicant and the agent at the time the application was made and the money and notes delivered to the agent, there is a dispute between the agent and the plaintiff who was present on that occasion. According to plaintiff's story, the agent, on receiving the money and notes, told her husband that he was insured from that time forward, and that, if he died that night, the insurance would be paid. The agent swears, however, that he did not make the statement, but on the contrary told the husband that the policy would not be delivered until the note was paid. On this point the court instructed the jury that, if they found defendant's claim in this respect to be true that the policy was to be withheld and not delivered until the first note was paid, then there was no sufficient delivery of the policy, and plaintiff could not recover; but on the other hand that, if the notes and cash were received and accepted as payment of the first year's premium, such payment would be sufficient to satisfy the requirement of the policy in that respect. The defendant pleaded a tender and offer to return the money and notes taken for the premium, but the record contains no evidence of the alleged fact unless it is to be found in a letter written by the defendant company to plaintiff's counsel denying liability on the policy and saying: “The money and notes are held by the company and will be turned over to the executor or administrator of Louis Unterharnscheidt.” The foregoing sufficiently states the case for a consideration of the legal propositions argued by counsel.

[1] 1. The first point made in the brief is that the notes given by Unterharnscheidt to his own order and not being indorsed by him were of no legal force or validity and could not therefore operate as payment. It is true that these notes until indorsed are not negotiable under our statute (Code Supp. § 3060--a184) but it does not follow that such notes, payable to the maker's own order and transferred by him to another for a valuable consideration, are void or unenforceable. It is not an infrequent practice for a person to execute a promissory note or bill of exchange payable to his own order (Daniels on Negotiable Inst. § 27; Culbertson v. Nelson, 93 Iowa, 187, 61 N. W. 854, 27 L. R. A. 222, 57 Am. St. Rep. 266), and in the absence of statutory restrictions such instruments are enforceable in the hands of a purchaser or assignee (Miller v. Weeks, 22 Pa. 89). It has also been held that a holder to whom a promissory note payable to order has been transferred by delivery obtains title thereto and may compel the necessary indorsement by the transferror (Swenson v. Stoltz, 36 Wash. 318, 78 Pac. 999, 2 Ann. Cas. 504), and we can see no reason why this rule does not apply as well to the case where the maker undertakes to pay to his own order. The objection of the appellant to the sufficiency of the notes must be overruled.

2. It is next argued that the delivery of the policy to the company's agent is not a delivery to the insured person. It is quite obvious that this may or may not be true according to the circumstances under which the policy is placed in the agent's hands. If the premium is paid when the application is presented, and such application is approved and policy executed as of that date, and nothing remains but to deliver the paper to the insured, it may well be held that the sending of it to the agent to be by him given over to such insured person constitutes a sufficient delivery in law. To say the least, the neglect or omission of the agent under such circumstances to perform the manual act of placing the policy in the hands of the insured will not serve to suspend or postpone the obligation of the company upon its contract. In other words, delivery in law is not necessarily manual delivery. Davenport v. Insurance Co., 17 Iowa, 282;Lightbody v. Insurance Co., 23 Wend. (N. Y.) 18;Blanchard v. Waite, 28 Me. 51, 48 Am. Dec. 474;Warren v. Insurance Co., 16 Me. 439, 33 Am. Dec. 674;Cooper v. Life Ins. Co., 7 Nev. 116, 8 Am. Rep. 705;Stephenson v. Allison, 165 Ala. 238, 51 South. 622, 138 Am. St. Rep. 26;Kimbro v. Insurance Co., 134 Iowa, 84, 108 N. W. 1025, 12 L. R. A. (N. S.) 421;Kilborn v. Insurance Co., 99 Minn. 176, 108 N. W. 861;Yonge v. Insurance Co. (C. C.) 30 Fed. 902;N. Y. Life Ins. Co. v. Babcock, 104 Ga. 67, 30 S. E. 273, 42 L. R. A. 88, 69 Am. St. Rep. 134;Fried v. Ins. Co., 50 N. Y. 243;N. Y. Life Ins. Co. v. Pike, 51 Colo. 238, 117 Pac. 899;Francis v. Insurance Co., 55 Or. 280, 106 Pac. 323. These and many other cases emphasize the proposition that legal delivery is very frequently accomplished without an actual transfer of manual possession.

[2][3][4] 3. It is further said that, under the conditions of the application, the insurance was not to take effect until the first installment of premium should have been paid and the policy delivered...