172 A. 121 | Pa. | 1933
Lead Opinion
Argued May 23, 1933; reargued January 8, 1934. (Hon. D. M. LARRABEE appeared for appellant until elected judge of C. P. Lycoming County.) — The acknowledgment *70 of receipt of the policy was merely prima facie evidence of its payment and could be rebutted.
The receipt was not conclusive proof of payment: Sargeant v. Ins. Co.,
There was no estoppel: Fedas v. Ins. Co.,
The public policy of Pennsylvania as expressed by statute requires the payment of the first premium before the policy can become effective: Harrisburg Trust Co.'s Case,
The insurer was entitled to show a conditional delivery of the policy regardless of the premium receipt.
Unconditional delivery was a primary fact at issue, independent of the question of premium payment: Snyder v. Ins. Co.,
There was no waiver of the condition of prepayment of premium: Marland v. Ins. Co.,
The proffered testimony as to conditional delivery and nonpayment of premium was competent and admissible.
Statements by the insured at the time of the delivery of the policy and acknowledging the fact that such delivery is conditioned upon the performance of some act, such as payment of premium or a later act of acceptance, are not admissible as declarations against interest, but as part of the res gestæ surrounding the fact of physical delivery: Mickey v. Hardin,
G. Mason Owlett, with him Charles G. Webb, for appellee. — Conversations between strangers to an action cannot be used in evidence against a party to the suit unless that party was present: Slaymaker v. Gundacker, 10 S. R. 75; Sager v. Lindsey,
Admissions by the insured in a life policy are not receivable in evidence against the beneficiary: Oplinger v. Ins. Co.,
When third parties have acquired rights under a contract such rights cannot be affected by permitting a *71
parol variation of the agreement between the original parties even though fraud or mistake is alleged: Springer v. Gas Co.,
Proof will never be permitted that no consideration was in fact paid when the contract says it has been, since this would have the effect of wholly defeating the operation of the contract: Real Estate Co. v. Rudolph,
January 10, 1929, Emma D. Eaton, a nurse residing in Lawrenceville, Tioga County, Pa., but temporarily employed in Elmira, N.Y., applied to an agent, in the latter city, of the New York Life Insurance Company, for a thirty-year endowment policy of life insurance in the amount of $5,000, with double indemnity in case of accidental death. Stella Eaton, her mother, plaintiff and appellee herein, was named as beneficiary, with the right reserved in the insured to change the beneficiary.
March 19, 1929, the policy was issued for delivery to the assured and that was expressly made its effective date. It contained, inter alia, the following provision: "This contract is made in consideration of the application therefor and of the payment in advance of the sum of one hundred seventy-six and 45/100 ($176.45) dollars, the receipt of which is hereby acknowledged, constituting the first premium and maintaining this policy for the period terminating on the 19th day of March, 1930." *72
March 29, 1929, the assured visited her home and gave the policy to her mother. March 31, 1929, while driving to Elmira, she crashed into an abutment and sustained injuries which caused her death a few hours later. April 3, 1929, plaintiff notified defendant of the death, and later defendant refused payment on the ground that the first premium had not been paid and the policy had never been legally delivered to the insured.
The appellee on March 17, 1931, instituted a suit on the policy. The claim was for $10,000 under the double indemnity clause. In the affidavit of defense appellant averred that this policy was handed to the applicant by the company's agent only for the purpose of permitting her to inspect it and to decide whether she would accept this policy, or return it to defendant for cancellation and have another policy for a different amount issued to her, and that it was only on this express agreement and understanding that Emma D. Eaton was permitted to have temporary possession of this policy. Defendant denied that the first annual premium was ever paid to it or to any of its agents, and that the insurance contract ever took effect.
At the trial plaintiff produced in evidence the policy of insurance, including the formal acknowledgment of the receipt of the premium, and also proved the death of the assured by accidental means, and then rested. Counsel for the defendant moved for a compulsory non-suit for the following reason: "plaintiff failed to prove that the consideration mentioned in the policy was actually paid to the insurance company through its duly authorized representatives." This motion was denied. Defendant then offered in evidence the testimony of agents McEwen and Thomas, who testified that the premium had not been paid and also testified as to the circumstances under which the policy came into the insured's possession. The testimony of agent McEwen was that he in company with Wesley Thomas, took the policy to the insured and undertook to deliver it to her and collect *73 the first premium; that she said to the witness that she did not know whether she wanted that policy or a smaller policy "of something like $2,000," but she requested him to allow her to take the policy home to Lawrenceville, and consult with her mother as to whether she would take it; that he consented to this and "placed this policy in her hands solely and only for inspection"; but neither she nor anyone else ever paid the premium. This offer of evidence was objected to on the ground that "any statement made by the insured cannot be used against the plaintiff in this case, and further that the testimony as to the lack of consideration was incompetent, and that the contract said the premium had been paid, and the effect of the testimony would be to defeat the operation of the contract. There is no affirmation or proof offered that anything was added to, or omitted, from the agreement by fraud, accident or mistake."
The trial judge made conflicting rulings on the admissibility of evidence. After defendant first rested, the case was reopened at defendant's request and it was then testified by defendant's agent that "the policy itself is the official receipt, supposed to be for the first premium." As the record stood when the plaintiff and defendant finally rested, the court had stricken out much of the evidence previously received, and particularly had excluded the oral evidence of the agents: (1) that the premium had not been paid, and the policy had been delivered for inspection only; and (2) that Miss Eaton had stated at the time the policy was placed in her hands that she would take the policy home to consult with her mother as to its acceptance. As to (1), the court said, inter alia, that "the fact the premium was not paid to them at that time would not rebut, or would not at least contradict the receipt which they delivered." The court directed a verdict for the plaintiff against the defendant in the sum of $11,550. Defendant appealed. The exclusion of (1) and (2) constitutes the subjects of the chief assignments of error. *74
That the insured was in lawful possession of this policy when she took it home is conceded. This is not a case where the insured acquired possession of a policy feloniously or by fraud, artifice or mistake. The policy was physically delivered to the insured. If it had been a deed in which she was the grantee, the delivery would in law be absolute. "An agreement to deliver a deed as an escrow to the person in whose favor it is made, and who is likewise a party to it, will not make the delivery conditional. If delivered under such an agreement it will be deemed an absolute delivery, and a consummation of the execution of the deed; for in traditionibus chartarum, non quod dictum, sed quod factum est inspiciatur [in the delivery of written instruments not what was said but what was done is regarded]": Simonton's Est., 4 Watts 180. In Weisenberger v. Huebner,
The word "escrow" is not limited to deeds. "The term 'escrow' was originally applied to instruments for the conveyance of land, but is now applied to all written instruments so deposited [with a third person]": 21 C. J., pages 865-6.
The same consideration of public policy which would exclude evidence of the conditional delivery of a deed to the grantee named therein would seem to call for the exclusion of evidence of a delivery "in escrow" of an insurance policy to the insured. However, the authorities have ruled otherwise.
Couch on Insurance, volume 1, section 124, page 230: "Possession of a policy of insurance by the insured is only prima facie evidence of its delivery. And the fact that a life policy acknowledging receipt of the first premium was in the possession of the insured at his death *75 does not preclude the insurer from showing by parol that the delivery was conditioned upon acceptance by the insured and execution of a promissory note. . . . . . Possession of the policy after the death of the insured ordinarily raises the presumption that it has been delivered and paid for, or that credit has been extended. Likewise, delivery of a life policy to the insured, together with its possession after his death by the beneficiary, are prima facie evidence that its recital of a cash payment is correct. And in Missouri a prima facie case is made out by production of the policy and proof of death, the prima facie evidence of delivery arising from the possession of the policy being sufficient to take the question of delivery to the jury" (citing numerous cases).
Jones v. New York Life Ins. Co.,
In Thompson v. Travelers Ins. Co. of Hartford, Conn.,
In National Mut. Fire Ins. Co. v. Sprague et al. (Colorado), 92 P. 227, it was held that "the recitals of the policy and its possession are at least prima facie evidence that the premium was paid, or that the assessable note was given." In Gardner v. United Surety Co. (Minn.),
The assignments of error based upon the exclusion of defendant's offer to show by the testimony of the agents that the policy was delivered to the insured for inspection only must be sustained, for a jural act "must be final in its utterance. It does not come into existence as an act until the whole has been uttered. . . . . . . The necessity for a delivery of a document, and the nature of a delivery, are here the most usual questions in practice": Wigmore on Evidence, volume 5, 2d edition, section 2404.
In an article by Professor Arthur L. Corbin on "Conditional Delivery of Written Contracts" in "Selected Readings on the Law of Contracts" (page 901), that author quotes ERLE, J., in Pym v. Campbell, 6 El. Bl. 370, as follows: " 'The evidence showed that there was never any agreement at all; the evidence to vary the terms of an agreement in writing is not admissible but evidence to show that there is not an agreement at all is admissible.' " Page 902: "There has been difference of opinion *78 as to what constitutes a legally operative delivery for specific purposes. Decisions have so shifted the concept behind the term that it is no longer merely the physical transition from one hand to another as a man of business may suppose. It is believed, however, that all still agree that delivery consists of conduct on the part of the grantor or obligor expressive of an intent on his part. . . . . . ."
Whether or not there was a legally effective delivery of this policy, i.e., a final jural act, depends on whether or not the minds of the agent and the insured met on the matter of the finality of the delivery. Did the agent and the insuredintend the former's manual delivery of the policy to the latter, to be an absolute delivery and acceptance? The answer to this is to be found not only in what was done but in what was said. What was merely done being not conclusive of the issue, what words accompanied the deeds of manual delivery and acceptance, respectively, become important. These deedsunaccompanied by words would indicate an absolute delivery and acceptance. If there were accompanying words, these might show that the delivery and acceptance were only conditional. If the issue on a trial was whether or not a person knew a revolver which he had pointed at another and discharged was loaded at the time, his declaration when he pulled the trigger would go far in determining the issue. If he had said, "I am going to shoot you," his remark (assuming it was not made in jest) would prove the existence of harmful intent on his part; if he had said, "See, it isn't loaded," his remark (if made in good faith) would negative the idea of harmful intent.
The difficulty here is not with the principle that declarations are receivable to prove the character of the legally equivocal acts they accompany, but with the fact that the proof of these alleged declarations on the part of the insured must be by "hearsay" evidence, for the insured is dead, and there is no one, except the defendant's *79
agents, who can testify as to what the insured said in physically accepting this policy. Declarations of deceased persons are always received with caution. See Rehm v. Frank,
Such hearsay evidence though viewed with a certain degree of skepticism is frequently admitted in evidence because it does possess some probative value. Thayer in his Preliminary Treatise on Evidence, page 523, refers to "declarations which are a part of some admissible fact, — of the res gestæ, as the phrase is. These are often spoken of as parts of a mass of circumstantial facts described as res gestæ, all evidential, supporting and supported by each other in their tendency to prove some principal fact, instead of being regarded, as they should be, as parts of that fact itself, pars rei gestæ, lying under the curse of hearsay, but received, by way of exception, on account of this special intimacy of connection with the admissible fact." The agents' declarations (if any) when they manually delivered the policy to Miss Eaton and the latter's declarations (if any) at the time she took the policy into her possession were "parts of these facts" of "delivery" and "acceptance" and show whether they were conditional or absolute. COLERIDGE, J., in Wright v. Tatham, 5 Cl. F. 670, 693: "The act itself being admissible, whatever accompanies it and serves to explain its character is relevant and admissible also."
The credibility of the agents' testimony as to what they said and as to what Miss Eaton said at the vital *80
moment is for the jury. These witnesses are not incompetent by reason of the fact that they were agents of defendant company. Sargeant v. Ins. Co.,
The beneficiary's lawful possession of a life insurance policy after the death of the insured, and especially when, as here, there is no allegation of fraud, accident, artifice, or mistake, to impeach this possession, prima facie sustains the burden of proof resting on the plaintiff, by raising a strong presumption that the policy was not only manually delivered but was also legally delivered to the insured, and puts the defendant in a position where, to avoid an adverse verdict, it must offer evidence of the conditional delivery alleged, sufficiently convincing to countervail the strong presumption of legal delivery arising from the lawful possession of the policy by the beneficiary. In Cambria Iron Co. v. Tomb et al.,
When a duly executed life insurance policy is, after the death of the insured, found in the lawful possession of the family or legal representatives of the insured or of the beneficiary named therein, it is a reasonable inference based on experience and common observation that there had been a legally operative delivery of the policy to the insured. An agent of a life insurance company who delivers a fully executed policy to the insured named "for inspection only," can fully protect his company against a claim later arising from such a conditionally delivered policy by taking an "inspection receipt" from the person to whom the policy is manually delivered. When no such receipt is given and the policy is physically delivered to the insured, who later dies in possession of the policy, the company is justly subject to the presumption that the delivery of the policy was absolute and that it is obligated to the beneficiary as it has in the language of the policy declared itself to be.
If the jury finds as a fact that this policy was delivered to the insured not conditionally but absolutely, the policy becomes conclusive proof of the payment of the first premium, for it so states and thus becomes a complete refutation of the averment (in the affidavit of defense) of the premium's nonpayment. It meets the burden resting on the plaintiff to show payment. ". . . . . . In view of the fact that the rule that a receipt is only prima facie evidence of payment, and may be explained by parol, does not apply when the question involved is not only as to the fact of payment, but as to the existence of rights springing out of the contract, it is generally held that an acknowledgment of payment of the first *82
premium in a policy which has been delivered is, in the absence of fraud, conclusive on the insurer, and cannot be rebutted in order to avoid liability on the policy": 1 Couch on Insurance, section 115, page 217. Chancellor KENT, in volume 3, page 260, of his commentaries, says: "The receipt of the premium in the policy is conclusive evidence of payment, and binds the insurer, unless there be fraud on the part of the insured." To the same effect are Home Ins. Co. v. Gilman (Ind.),
Plaintiff made out a prima facie case by proving the accidental death of her daughter, Emma D. Eaton, and by offering in evidence this fully executed life insurance policy in which she (the plaintiff) was named beneficiary. This raised, as we have stated, a strong presumption that there had been a legally operative delivery of the policy. Defendant, however, had a right to present competent evidence for the purpose of proving that the policy had been delivered for inspection only, i. e., conditionally and not absolutely. What the agents offered to testify, first, as to what they said about the policy's delivery, contemporaneously with the handing of this policy to the insured, and, secondly, as to what theinsured said about its acceptance, contemporaneously with taking this policy into her possession, is competent evidence to prove the character of the delivery — and that is the fact in issue. This evidence should have been received and submitted to the jury under proper instructions. Its credibility and its potency in effecting persuasion are exclusively for the jury's determination.
The judgment is reversed with a venire. *83
Dissenting Opinion
I am unable to agree with the conclusion of the majority in this case. I believe their conclusion imperils every life insurance policy during the first year of its existence, and opens the door to fraud of the worst character. My reasons for disagreeing, are as follows:
First: It is against public policy to hold that a policy of insurance, bearing the official receipt, may be conditionally delivered to the insured named in the policy, in the absence of fraud, accident or mistake.
Second: Assuming there was a conditional delivery, under the facts so well detailed in the majority opinion, the policy was delivered for acceptance or return for another policy. It is unquestioned that Emma Eaton, the insured, intended to purchase insurance. The record shows that this policy was accepted by the insured.
Third: The "official receipt" in the policy should be regarded as conclusive after the death of the insured, and its effect should not be permitted to be overthrown by the testimony proposed in this case.
Fourth: Assuming that payment had not in fact been made, the policy having been accepted, the first payment called for is merely a debt owing from the insured to the company.
Treating the above subjects a little more in detail: First, I agree with the intimation of the majority that the delivery, under the circumstances, should be held to be absolute, and not conditional. In this respect this policy is similar to a deed. A completed deed cannot be delivered conditionally to a grantee named therein. Delivery is absolute irrespective of any intention or concurrent parol agreements to the contrary: Simonton's Est., 4 Watts 180; Weisenberger v. Huebner,
Second, it is undisputed that decedent applied for the policy in Elmira, N.Y., where it was issued. The policy was in fact delivered to her for acceptance or for rejection for a smaller policy. The policy was handed to the beneficiary, who placed it in a drawer in the dining room, and had it in her possession at all times thereafter until the insured died.
The insured left her home in Lawrenceville, Pa., and was returning to Elmira, N.Y., some distance away. As these circumstances are all admitted by the insurance company, as well as by the beneficiary, there can be no doubt they evidenced an acceptance of the policy. The condition had been fulfilled and the beneficiary had the right to enforce her contract.
On both propositions as submitted, I think that the evidence of the agents is incompetent, either to show conditional delivery or any other fact occurring at the time the policy was delivered if it would have a tendency to defeat the beneficiary's right to recover. The beneficiary is suing in her independent right, which is not dependent on nor representative of the right of the assured. No interest of the assured passed to the beneficiary; she stands in her own right as a party to the contract: *85
Hamill v. Supreme Council,
Under the third proposition that the premium had never been paid, we can only reiterate what, as the majority opinion states, is in the policy. Here is a plain, unambiguous and certain statement that money had been paid, and it is certified over the signature of the president and secretary. There is no attempt on the part of the insurance company to introduce evidence that because of fraud, accident or mistake it had not been paid. No such claim is involved in the case, yet the majority opinion permits two agents to say that they did not receive the money, notwithstanding the fact that the money may have been sent to the home office. There were other channels through which the money could have passed. Certainly the testimony of the agents would not be competent to disprove the fact of payment of money *86 into the hands of the secretary and the president. The only thing that they could say was that decedent did not pay them, but that does not disprove the receipt that is offered in evidence here.
While a receipt for the payment of money may be challenged on the ground that the amount is inaccurate or incorrect, it is a settled rule that a recital of consideration in a deed when it is an operative part of the contractual act may not be denied: Wigmore on Evidence, volume 5, 2d edition, section 2433, page 313; Southard v. Ark. Valley W. R. Co.,
Assuming that the first premium had not been paid, as the insurance policy was in fact accepted, that was the entire essence of the contract. The failure to pay the first premium merely established the relation of debtor and creditor between decedent and the company. A great number of cases have determined that payment of the first premium is not essential to render a contract of insurance effective: Nat. Mut. Fire Ins. Co. v. Sprague,
In the condition of this record, considering the admissions and the offers of proof, it is my opinion that the court was not in error in entering the judgment that it did.
Mr. Justice SCHAFFER concurred in this dissent.