72 N.E.2d 76 | Ohio | 1947
Lead Opinion
The single question of law presented is whether a verdict should have been directed in favor of the defendant at the close of all the evidence, pursuant to the motion then made. The defendant admitted that Emma Leube had made the application for insurance and that defendant had received the first payment of premium and given a receipt therefor which is set out in the foregoing statement.
Under the law of this state such premium receipts create contracts of temporary or interim insurance. This was specifically held in the case of Duncan v. John Hancock MutualLife Ins. Co.,
"Where a preliminary or temporary contract provides that it shall be operative from its date or other specified date subject to acceptance of the application or approval of the risk, it is effective from the specified date according to its terms where the company accepts the application or approves the risk; but where the *454 company exercises its right of disapproval in the mannerspecified the insurance ceases instantly, and no liabilityarises thereunder." (Italics supplied.)
It is contended by the plaintiff that the decision of the court in the Duncan case, supra, requires the affirmance of the judgment in the instant case. In that case, however, the court was not called upon to consider or determine the duration of the period covered by such interim or temporary contract. The death occurred prior to any action of the company either accepting or rejecting the application, the delay being occasioned by reason of a difference in the statement of the applicant's occupation in the application and that appearing in the medical examiner's report. The contention made by the claimant in that case, as stated on page 446 of the opinion, was that "the interim or temporary insurance thus effected was to be for the period between the making of the application and its approval and acceptance or rejection by the insurer."
It is to be observed that quite a different situation is presented in this case from that disclosed in the Duncan case. The record in the instant case discloses that the application for insurance had been rejected prior to the occurrence of the injuries which resulted in the death of the applicant. In theDuncan case there was not, and could not have been, any issue as to whether the insurer could be held for a loss against which it had specifically refused to insure or whether the company would be liable under an application for insurance which it had actually rejected. That issue, presented by the facts in this case, is now before the court for the first time and a determination of that issue is decisive of the instant case. It seems too clear to require argument, that the insurer may not be lawfully required to pay a loss against which it had specifically refused to insure or be held liable when it had definitely rejected the application for insurance *455 and thereby refused to accept the risk. No decision has come to our attention holding the contrary.
The unusual situation presented in this case was before the New York Court of Appeals in the case of Corning. v. PrudentialIns. Co. of America,
"The action was brought to recover upon an alleged contract of life insurance on the life of the husband of plaintiff who was named as beneficiary therein. The husband applied for the policy on February 7, 1935, and paid the first quarterly premium thereon. He received a receipt reading that, in view of such payment, 'the insurance shall take effect from the date of the application * * * provided said application is approved and accepted at the home office of the company in Newark, New Jersey, under the plan, for the premium paid and amount of insurance applied for.' The application for the policy, which contained a similar provision, reached the home office on February 11, 1935. On February 15, 1935, the home office forwarded a policy of a different type, and which called for a larger premium, to its district office at Rockville Centre, New York, with instructions to advise the applicant that defendant had declined to grant the policy applied for and had offered, instead, the substituted policy. The agent in charge of the application received the instructions and the proposed policy on February 16, 1935, went that same day to the residence of the applicant, but could find no one at home and learned that the applicant was out of town. The applicant had left New York on February 8, 1935. On February 15, 1935, he was injured in an automobile collision and died on February 18, 1935." *456
The New York Court of Appeals, basing its conclusion upon the facts above stated, unanimously affirmed the judgment of the Appellate Division of the Supreme Court. In that case, as in this, there was a disapproval and rejection of the application for insurance. There, as here, the plaintiff contended that the insurance took effect on the date of the application and payment of the premium, and that there was a liability notwithstanding rejection of the application by the insurer.
By reason of the rejection of the application in the instant case, there was no contract of insurance in effect at the time of the death of the applicant. The motion of the defendant should have been sustained and a verdict for the defendant directed at the close of the evidence.
Having hereinbefore shown the distinction between this case and the Duncan case, supra, we again direct attention to the rule that the syllabus of a decision of this court must be interpreted with reference to the facts upon which it is predicated and the questions presented to and considered by the court. Baltimore Ohio Rd. Co. v. Baillie,
Upon casual view, some authorities cited appear to support the plaintiff's contention, among them being the following: 22 Ohio Jurisprudence, 1943 Cumulative Supplement, 2632, Section 163a; 29 American Jurisprudence, 159, Section 143; 81 A. L. R., 336; 44 Corpus Juris Secundum, 962, Section 230; Starr v.Mutual Life Ins. Co. of. N.Y.,
It must be borne in mind that pronouncements of writers of text books or annotations are of no more weight or value than the court's decisions cited in support of them.
The only life insurance cases, cited in support of the pronouncements in 22 Ohio Jurisprudence, supra, relied *457 upon by counsel for plaintiff are the Duncan case, hereinbefore considered, and Prudential Ins. Co. v. Howard, 18 Ohio Law Abs., 688. The Duncan case was certified to this court on the ground of conflict of the judgment of the Court of Appeals for Cuyahoga county with the judgment of the Court of Appeals for Butler county in the Howard case.
This court, in reversing the judgment in the Duncan case, in effect affirmed the judgment in the Howard case. The question presented in the instant case was not presented or considered in the Howard case. That fact is clearly shown by the following statement in the opinion in the Howard case: "It is not necessary to extend this opinion by pointing out the difference in phraseology of the application or receipt in those cases in which it was held no liability attached, or to point out thatin some of them there had been an actual rejection of theapplication." (Emphasis ours.)
The holding of the court in the Howard case, which seems to cover the real question there presented, is that where an insurance company "is keeping it [the application] under advisement while investigating inconsistent statements as to his marital status and address, will be held liable * * * when the insured is accidentally killed while the interim or temporary insurance is in effect prior to issuance of the policy or rejection by the home office." (Emphasis ours.)
The text cited in American Jurisprudence refers only to fire insurance cases. The only case cited, as supporting the pronouncement relied on from 81 A. L. R., is Mohrstadt v.Mutual Life Ins. Co., 52. C.C.A., 675, 115 F., 81. The inapplicability of that case is manifest by the concluding words of the opinion:
"The case at bar rests entirely upon the construction of what is termed the 'Binding Receipt,' and is distinguishable from the cases last referred to for the reason that by' the terms of the receipt — from which *458 any contract of insurance existing between the parties must arise — the defendant did not agree to assume any risk on the life of the deceased until it had accepted his application, which application it never did accept."
The text in Corpus Juris Secundum referred to cites only a fire insurance case.
The case of Starr v. Mutual Life Ins. Co., supra, involved a situation where an application for insurance was accepted by the company, and a policy issued, though an accident and death resulting therefrom intervened and the policy was not delivered.
For the reasons hereinabove stated the judgment of the Court of Appeals is reversed and final judgment is rendered for the defendant.
Judgment reversed.
TURNER, HART and BELL, JJ., concur.
WEYGANDT, C.J., dissents.
ZIMMERMAN and SOHNGEN, JJ., not participating.
Dissenting Opinion
The first question presented in this case is whether a contract of interim or temporary insurance was effected by (1) the signing of the application, (2) the payment of the first premium, and (3) the issuance and delivery of a receipt for the latter.
In the majority opinion this question is answered in the affirmative, consistent with the decision of this court in the case of Duncan v. John Hancock Mutual Life Ins. Co.,
The second question raised is whether the defendant company was required to give notice of the rejection of the application for the permanent contract in order to terminate the existing interim or temporary contract. In the majority opinion it is held that such notice *459 was not necessary, and the decision is to the effect that the rejection immediately terminated the interim or temporary insurance irrespective of notice thereof to the insured.
In 22 Ohio Jurisprudence, 1943 Cumulative Supplement, 2632, Section 163a, appears the following statement of the pertinent rule:
"An application for life insurance, accompanied by declarations of the applicant and solicitor in lieu of medical examination, which stipulates that the insurance shall take effect from the time the application is signed, if the full first premium is paid, in accordance with the provisions of the policy applied for, and if the application is approved and accepted at the home office, upon payment of the first premium, insures the applicant temporarily for the face value of the policy, until the risk assumed is terminated by actual notice to the applicant that his application was rejected, or until it is superseded by issuance of a policy."
Likewise, in 29 American Jurisprudence, 159, Section 143, the rule is stated as follows:
"Such binding slips or interim receipts, or temporary insurance, may ordinarily be revoked by notice to the insured that the company declines the risk."
And in 81 A. L. R., 336, appears the following statement to the same effect:
"Where the provision in a receipt is construed as providing temporary protection until such time as the insurer has considered the application and announced its determination to accept or reject the risk, the insurer cannot terminate the risk so assumed otherwise than by notice brought home to the insured in his lifetime that his application was rejected.Mohrstadt v. Mutual Life Ins. Co. (1902), 52 C.C.A., 675, 115 F., 81, * * *."
In 44 Corpus Juris Secundum, 962, Section 230, it is stated: *460
"It has been held, however, that the applicant must be notified of a rejection so that he may have an opportunity to obtain insurance elsewhere."
In the case of Starr v. Mutual Life Ins. Co. of N.Y.,
In the instant case the defendant insurance company does not contend that it notified the insured of the rejection of her application for the permanent contract. However, the defendant does insist that, if it was required to give such notice, a reasonable effort so to do was made within a reasonable time. This clearly presents a jury question under the evidence in this case. On December 18, 1942, the application was signed, the first premium was paid and a receipt therefor was delivered. Thirteen days later on December 31, the insured was injured. Seven days thereafter she died. This was twenty days — almost three weeks — after the original transaction, and the defendant company still had the insured's money and had given her no notice whatsoever of the rejection which is alleged to have taken place December 28, at the defendant's home office ten days before the death of the insured.
It would seem that the lower courts were not in error in holding that under these circumstances it would be improper to direct a verdict for the defendant company. *461