Wadsworth v. New York Life Ins. Co.

• Decision Date: 31 July 1957
• Docket Number: No. 69,69
• Citation: 349 Mich. 240,84 N.W.2d 513
• Parties: Bernice WADSWORTH, Plaintiff and Appellant, v. NEW YORK LIFE INSURANCE COMPANY, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 513

84 N.W.2d 513

349 Mich. 240

Bernice WADSWORTH, Plaintiff and Appellant, v. NEW YORK LIFE INSURANCE COMPANY, Defendant and Appellee.

No. 69.

Supreme Court of Michigan.

July 31, 1957.

Ellmann & Ellmann, Detroit, for plaintiff and appellant.

Armstrong, Essery, Helm & Marshall, Detroit, for defendant and appellee.

Harold E. Stieg, Detroit, of counsel.

Before the Entire Bench, except BOYLES, J.

EDWARDS, Justice.

This case involves as American tragedy. Captain Joseph Wadsworth, a U. S. air force combat pilot, flying from an air base in Japan during the Korean War, was last seen over the ocean with his jet plane out of control. He was subsequently declared dead. He left behind him a wife and 2 small daughters. On his last leave, Captain Wadsworth had signed an application for $10,000 worth of life insurance with defendant New York Life Insurance Company. He had passed the medical examination and paid an initial premium presumably to give effect to a so-called 'binder clause.' Following Captain Wadsworth's death, the defendant company denied payment and the beneficiary, the Captain's widow, herein brings suit in assumpsit.

We are confronted here by a truncated record, several difficult legal problems and a number of unresolved issues of fact.

The case comes to us on appeal by plaintiff-appellant from a jury verdict directed against her by the trial judge at the close of plaintiff's proofs. In such a situation we examine the record to see whether there was competent evidence from which the jury could have found for the plaintiff. Carver v. Detroit & Saline Plank-Road Co., 61 Mich. 584, 28 N.W. 721; Curry v. Traver-Bird Co., 167 Mich. 17, 132 N.W. 463; Randolph v. Detroit United Railway, 213 Mich. 100, 181 N.W. 44.

In addition to those facts cited by my Brother in his opinion, the record discloses the following:

During the course of the Korean War, a Detroit agent for the defendant company, a Mr. Frank Crum, followed the practice of soliciting insurance at the Selfridge Air Force Base. This was a U. S. Air Force base which was training and housing combat pilots for active duty in the Korean War. In the course of such business activity, the general agent met Captain Joseph W. Wadsworth.

Captain Wadsworth was a pilot who looked upon Air Force flying as his profession. He had already flown combat missions in Korea. He had returned to the States accompanying the body of his brother--another combat pilot. He (and the agent) both knew that he was returning immediately to active combat duty.

Captain Wadsworth had a wife and 2 small daughters with whom, after his brother's funeral, he was spending his brief leave.

On New York Life's solicitation, Captain Wadsworth applied for a $10,000 life insurance policy. Mrs. Wadsworth was named as the beneficiary. The plan of life insurance described in said application (plaintiff's exhibit 1 in this proceeding) was 'ordinary life'; the amount $10,000. Section 18 of the application provided:

'Write Policy to Take Effect

'(a) as of last date of Parts 1 and 2 of this application ..... ()'

(a) was checked.

The application itself was dated January 4, 1951, and part 2 of the application, 'Answers to the Medical Examiner' (plaintiff's exhibit 3), was dated January 7, 1951. In paragraphs 13 and 14 of the application, the Captain described himself as 'in service,' and under paragraph 24 of the application he answered 'yes' to a question pertaining to intent to fly in any other kind of aircraft than regularly scheduled air lines, thereby requiring the filling out of 'New York Life Insurance Company Military, Naval and Aviation Blank' (plaintiff's exhibit 2), in which the Captain described himself as 'Capt. in USAF, Senior Pilot,' with '2902 hours' flight experience.

At the bottom of the application, above Captain Wadsworth's signature and the soliciting agent's witnessing signature, was the following:

'If the applicant shall have paid the soliciting agent in cash, as indicated in item 25 above, an amount which equals the full first premium for the policy applied for, and if the company shall receive evidence satisfactory to it that at the time of completion of this application the proposed insured (and the applicant for the child's protection benefit, if any) was an acceptable risk for said policy at the company's published premium rate therefor, the policy as applied for shall be deemed to be in effect as from the date specified in item 18 above as if it had been delivered. Except as provided in the preceding sentence said policy shall not go into force unless and until it is delivered to the applicant and the first premium thereon paid in full during the lifetime of the proposed insured and then only if no change shall have occurred in the insurability of the proposed insured * * *.'

The same section likewise contained the following:

'Notice to or knowledge of the soliciting agent or the medical examiner is not notice to or knowledge of the company and neither of them is authorized to accept risks or to pass upon insurability. Only an executive officer of the company at its home office can make, modify or discharge contracts or waive any of the company's rights or requirements.'

The application also indicated that the first premium in the sum of $68.20 was paid to the agent on January 4, 1951.

The balance of the facts relevant to this case may be shown in time sequence as follows:

January 4--Application for insurance made out and $68.20, first quarterly premium, paid.

January 7--Captain Wadsworth passed medical examination. Subsequently the application was sent to defendant's home office in New York.

January 11--Captain Wadsworth left Detroit to return to active duty in Korea, and subsequently was assigned, upon request, to jet piloting.

January 24--Mr. Crum, defendant's agent in the Detroit office who had secured the original application, received a policy from the home office. The policy was in the ordinary form, but he testified that it required that Captain Wadsworth sign an additional form.

Mr. Crum then called Mrs. Wadsworth to find out the Captain's address, but she had none later than APO 970 which was on the application.

February 1--Mr. Crum testified he called Mrs. Wadsworth several times between January 24 and the first of February at which time he received a new address--APO 710.

February 10--Mr. Crum wrote Captain Wadsworth at APO 710 telling him he was writing to find out if he had the correct address and, if so, requesting an early reply because he had a form for the Captain to sign.

March 25--Captain Wadsworth replied to Crum's letter of February 10 indicating that it had been delayed over a month. The Captain's new address--APO 994--was forwarded to Crum.

March 27--Crum, having secured APO 997 from Mrs. Wadsworth before the Captain's letter arrived, wrote to the Captain sending the form and asking that he sign and return it at once.

April 1--Captain Wadsworth was reported missing after his plane entered a cloud, out of control and never reappeared.

June 29--Captain Wadsworth was declared dead as a result of the April 1 occurrence.

July 12--Mrs. Wadsworth received a letter from the Detroit office and a check for $68.20 representing the original payment on the applied-for policy. This check has not been cashed.

During all of the events related above, defendant had been receiving monthly premium payments by allotment through the U. S. Air Force of $22.90. Subsequent to the declaration of death referred to, defendant returned 4 such payments to the U. S. Air Force for return to Mrs. Wadsworth.

Subsequent to the declaration of death also, defendant destroyed the life insurance policy which it concedes it had issued on Captain Wadsworth's life. No explanation is contained in this record as to such destruction other than the agent's speculation that it was due to the fact that Captain Wadsworth obviously could not accept delivery of the policy.

In Mr. Crum's testimony it is stated that the company issued and sent to him, their general agent, the life insurance policy in question, that it contained an amendment which is totally undescribed upon this record, and that a form accompanied the policy which had to be signed by Captain Wadsworth. This form, it appears, had finally been sent to Captain Wadsworth, according to Mr. Crum's testimony, mailed on March 27 in Detroit, a matter of several days before Captain Wadsworth's plane was seen out of control over Japan.

Justice SHARPE'S opinion, sustaining the trial judge, is based largely upon the following statement contained therein: 'The company as a counter proposal issued a policy with aviation conditions.' Such an assertion is contained in defendant's answer--denied by plaintiff's reply. There is not, however, a line of evidence in this record as it stands now that 'aviation conditions' were ever attached to the policy issued in response to Captain Wadsworth's application, nor ever transmitted or attempted to be transmitted to Captain Wadsworth. My Brother has simply recited as a fact the affirmative defense offered by defendant and denied by plaintiff and up to the time of the directed verdict completely unproven.

We cannot, of course, presume what defendant's proofs might be. We consider this record as it stood at the close of plaintiff's proofs when the trial judge directed the verdict.

Our first question is: Did plaintiff's proofs constitute prima facie evidence of a contract?

As the record stands, it appears to us that there was a plain question of fact for jury determination: Had the insurance contract in question been accepted by the defendant company within the terms of the binder clauses prior to the Captain's death?

It is obvious that under the clauses set forth above, actual delivery of the policy was not required. The most that could be read into them was a requirement that the company 'receive evidence satisfactory to it that at the time of completion of this...