Employers Protective Life Assurance Co. v. Gatlin, 437 S.W.2d 811

Employers Protective Life Assurance Co. v. Gatlin

437 S.W.2d 811

Ark.

1969

Check Treatment

George Rose Smith, Justice.

This action was brought by the appellee to recover $1,000 in benefits under a hospitalization policy which was applied for but never actuаlly issued. The trial court, sitting as a jury, made a general finding of fact tliat a valid сontract liad in fact been agreed upon. This appeal is from thе ensuing judgment for $1,000, plus penalty and attorney’s fee. For reversal the insurer argues that the proposed agreement was never consummated.

Thе facts, stated favorably to the appellee, are simple. On August 10, 1967, Frеd Nolan, a soliciting agent for the appellant, called at Gatlin’s hоme and obtained his written application for a $1,000 hospitalization policy. For the first quarterly premium of $46.37 Gatlin gave a check, postdatеd September 1, ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍which was eventually cashed by the insurance compаny. Nolan signed and issued a printed form of receipt which merely acknowledged receipt of $46.37 “as payment on insurance applied for” in the company. The application, which Gatlin signed without having read it, concluded with a paragraph reading in part:

I hereby apply to Emрloyers Protective Life Assurance Company at Little Rock, Ark., for a policy to be issued solely and entirely in reliance upon the written answеrs to the foregoing questions, and agree that it shall not be effective until а policy has been actually issued while all of the above members аre alive and in sound health.

(The pertinent clauses in the applicаtion and in the receipt are not set out in the appellant’s abstract, as they should have ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍been, but they are quoted in the appellant’s brief, which is a substantial compliance with our Rule 9. Gott v. Moore, 218 Ark. 800, 238 S.W. 2d 754 [1951].)

Gatlin testified that Nolan told him that the policy went into effect “as soon as I wrote you that receipt.” Nolan denied that statement, saying that he told Gatlin that thе policy would go into effect as of the date of the application if it was approved by the home office. TTe accept Gatlin’s version, for that view was evidently taken by the trial court.

On August 23 Gatlin was injured in an аutomobile accident and ultimately incurred hospital expenses exceeding the face amount of the policy. On September 13 the company ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍sent Gatlin its check for the amount lie had paid and informed him that “we are not able to issue this coverage to you.” Gatlin refused the tеnder and filed this suit.

AYe are unable to sustain the judgment. Gatlin relies on our holding in Union Lifе Ins. Co. v. Rhinehart, 229 Ark. 388, 315 S.W. 2d 920 (1958), but that case is not in point. There the company issued a “binding” receipt, which, when read along with ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍the application, provided temporary insurance. AAre distinguished that case in Dove v. Ark. Nat. Life Ins. Co., 238 Ark. 1033, 386 S.W. 2d 495 (1965), where both the application and the receipt recited that the policy would take effect as of the date of the approval of the application at the company’s home office. Herе the application states explicitly that “it shall not be effective until a policy has been actually issued.” Since, as we said in the Dove case, the application and the receipt are to be rеad together, the case at bar is substantially similar to the Dove case, where we held that there was no coverage until the application was approved at the company’s home office. AYe сannot distinguish that case from this one. It is immaterial that Nolan stated that the рolicy would be effective immediately, as a soliciting agent has no аuthority to agree upon the terms of the policy or to change or waive those terms. Holland v. Interstate Fire Ins. Co., 229 Ark. 491, 316 S.W. 2d 707 (1958). With respect to the effective date of ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍the policy see also Appleman, Insurance Law & Practice, § 103 (rev. ed. 1965).

Ee versed and dismissed.