Whitney v. Union Central Life Ins. Co.

• Decision Date: 11 April 1931
• Docket Number: No. 8975.,8975.
• Parties: WHITNEY et al. v. UNION CENTRAL LIFE INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

47 F.2d 861 (1931)

WHITNEY et al. v. UNION CENTRAL LIFE INS. CO.

No. 8975.

Circuit Court of Appeals, Eighth Circuit.

February 25, 1931.

Rehearing Denied April 11, 1931.

Ralph P. Wilson, of Lincoln, Neb. (Burkett, Wilson, Brown, Wilson & Van Kirk, of Lincoln, Neb., on the brief), for appellants.

Leonard A. Flansburg, of Lincoln, Neb. (R. O. Williams and George A. Lee, both of Lincoln, Neb., on the brief), for appellee.

Before KENYON and BOOTH, Circuit Judges, and REEVES, District Judge.

KENYON, Circuit Judge.

Parties will for convenience be designated as in the trial court, where appellants were plaintiffs, and appellee was defendant.

Plaintiffs, as beneficiaries, brought action to recover on a life insurance contract. The defense was that the insured, Bruce F. Whitney, had committed suicide within one year from the date the insurance became effective, which under the terms of the policy made it null and void. There is little dispute concerning the facts. Plaintiffs demurred to the answer, on the ground that the matters therein stated did not constitute a defense to the cause of action. The demurrer was overruled. At the close of all the evidence the court instructed a verdict for defendant and entered judgment thereon.

Plaintiffs' argument here is based almost entirely on the alleged error of the court in overruling the demurrer. It is of no consequence, however, whether we consider the case on that theory or consider the alleged error of the court in instructing a verdict, the legal question involved is the same.

The facts as stated in the answer are these: March 22, 1927, the insured, husband of Helen M. Whitney, one of the plaintiffs, signed a written application to defendant for insurance, and paid to the soliciting agent the first premium of $29.85. On March 23d the age of insured would have changed, and the agreement that premium should be paid on March 22d and quarterly thereafter was to give the insured the benefit of a lower rate. The insured died by suicide on April 10, 1928. The application in writing, signed by said Whitney on March 22, 1927, was the usual form of application used by defendant. It provided as to premiums:

"3 c. Premiums (regular $23.90 (dis. ben.) $4.35 (dbl. indem) $1.60 payable Qr. on Mch. 22."

Question 10 thereof and answer are as follows:

"10. a Has the first premium been paid?

"a Yes.

"b If so, state the amount paid, as follows:

"b I have settled the premium by payment of $29.85 for which I have received binding receipt form 401 I, to the terms of which I agree."

Provision 11 is this:

"11. It is agreed that any insurance issued on this application shall not take effect until the policy has been delivered to the applicant and the first premium due thereon has been paid and accepted by the Company or its authorized agent during the applicant's lifetime and good health; provided, however, that if the applicant pays the first premium in advance and so declares at Question 10 hereof and receives therefor binding receipt in the form attached hereto (which is the only form of receipt for payment of first premium in advance authorized by the Company) the terms of said binding receipt shall apply.

"I agree to be examined by the Company's Medical Examiner, and that my statements in this application and to the Medical Examiner are made for the purpose of obtaining this insurance. I understand that any note accepted by the Company in connection with the first years' premium must be secured to its satisfaction. I also agree that payment of the first premium shall keep the insurance in force only to the date fixed in the policy for payment of the next premium."

The binding receipt which was given to insured at the time of the application and referred to therein is as follows:

"401 I Binding Receipt.

"Received from Bruce F. Whitney ($29.85) Twenty-nine & 85/100 Dollars being the first premium on a policy of insurance of $5000.00 in The Union Central Life Insurance Company, of Cincinnati, upon his life, for which application is made this day. It is agreed and understood that if said application is received and is approved on the plan and for the amount applied for, by said Company at its Home Office, the said applicant will be insured from the date of such approval, subject to the terms and conditions of the policy contract of said Company; otherwise there will be no liability on the part of the Company, and the premium paid, as evidenced by this receipt, will be returned.

"Dated March 22/27.

"E. H. Clopper, Agent.

"This is the only form of receipt for payment of premium in advance authorized by the Company."

This application for insurance was forwarded by the agent to the home office of the company at Cincinnati, Ohio. The physical examination was approved on April 18, 1927, the application was approved on April 20, 1927, and the policy was issued on that date, and later delivered to the insured. It was accompanied by a second receipt for the premium, which is as follows:

"Union Central Life Insurance Company "Cincinnati, Ohio

"$29.85

"Received twenty-nine & 85/100 Dollars. — being the First premium (including premiums for disability and double indemnity benefits if any) upon Policy No. 928384, issued upon the life of Bruce F. Whitney, continuing said Policy in force to the 22nd day of June, 1927.

"This receipt is not valid unless Premium is paid, and this Receipt countersigned and dated the day of payment by M. E. Schryver, General Agent, or such person as he authorizes by endorsement on the margin hereof.

"Paid at Morrison Ill. this 22nd day of March, 1927.

"E. H. Clopper, Agent "R. S. Rust, Secretary.

"Agents are not authorized to grant permits, Make or Alter Contracts or Waive Forfeitures.

"Authority is hereby given to E. H. Clopper to accept payment hereof on my account and to receipt therefor.

"M. E. Schryver, Gen'l. Agt."

The policy contained the following provision:

"32. Suicide. This policy shall be null and void, except for the amount of premium paid, if the insured shall die within one year by self-destruction, whether sane or insane."

The testimony at the trial differed only slightly from the statements of the answer. Mrs. Whitney testified that she was present when the written application for insurance was signed and that no receipt was given to her husband. Mr. Clopper, the agent of the insurance company, testified that he gave the binding receipt to the insured. Mrs. Whitney swore to the original petition in which it was stated that the binding receipt was issued and delivered to Mr. Whitney. Mr. Whitney acknowledges in his application that he had received it. However, the only difference it would make if there were no binding receipt given would be that the insurance would not take effect until the policy was delivered and the first premium due paid and accepted by the company, as provided in the application, while if the binding receipt were given the insurance would take effect upon approval of the application by the company at its home office. There can be no doubt under the evidence that the binding receipt was given as claimed by defendant. Under the suicide clause if Whitney died within one year from the time the insurance became effective there could be no recovery. Both parties are agreed on this proposition.

Defendant made a tender to plaintiffs of the amount of premiums the insured had paid. Defendant's theory is that the answer and the evidence as well show the death of insured by suicide within one year from the effective date of the insurance, i. e., April 20, 1927, when the application was approved at its home office. Plaintiffs' theory is that the insurance became effective on March 22, 1927, when the application was signed and the first premium paid, which would be more than a year before the suicide of Whitney. Plaintiffs' argument stresses the proposition that, if by reason of the various writings, receipts, and application an ambiguity as to the effective date of the policy arises, such question should be construed against the insurer. Of course this is the law. Business Men's Assur. Co. of America v. Campbell (C. C. A.) 32 F.(2d) 995; Banker's Reserve Life Co. v. Matthews (C. C. A.) 39 F.(2d) 528; Mutual Life Ins. Co. v. Hurni Packing Co., 263 U. S. 167, 44 S. Ct. 90, 68 L. Ed. 235, 31 A. L. R. 102.

It is also the law that the courts will not make new contracts for the parties, but will seek to interpret the contracts made according to the intention of the parties as gathered therefrom. An insurance contract is no different from any other contract. This court in considering such contract said in Hawkeye Commerical Men's Ass'n v. Christy, 294 F. 208, 213: "The natural, obvious meaning of the provisions of a contract should be preferred to any curious, hidden sense which nothing but the exigency of a hard case and the ingenuity of a trained and acute mind would discover."

Plaintiffs contend that the intent of the company to treat the insurance as commencing March 22, 1927, clearly appears by virtue of the quarterly premium dates fixed by the policy as commencing upon that date, the reference therein to anniversary dates, the subsequent receipts for quarterly payments, and the receipt for the first premium, heretofore set out, which they designate as plaintiffs' binding receipt to distinguish it from defendant's binding receipt.

It is true the company by the terms of the policy fixed March 22d as the policy anniversary date. The written policy also contains certain provisions with reference to the amount insured up to the age of sixty-five, which refer to the policy anniversary nearest to age sixty-five of the insured, namely, March 22, 1961. As to the amount of insurance after the age of sixty-five, reference is also made to the policy anniversary nearest to age sixty-five, and there is a provision for conversion prior to March 22, 1956.

Plaintiffs argue that its alleged binding receipt, stating that the...