115 Neb. 357 | Neb. | 1927
This is an action against a life insurance company to recover $1,000 in damages for negligence in preparing, examining and approving an application for life insurance in the sum of $1,000, after receiving an annual premium, and in failing to issue and deliver a policy. Melvin A. Strand of Shelby, Nebraska, was the applicant. He died without procuring the insurance. As administrator of his estate, his father, Oscar Strand, is plaintiff. The Bankers Life Insurance Company is defendant. Its home office is in Lincoln, Nebraska. In an answer, defendant demurred to the petition, pleaded a return of the premium and denied the negligence charged by plaintiff. A trial of the issues resulted in a peremptory instruction in favor of defendant. Upon the jury’s verdict thus directed the action was dismissed. Plaintiff has appealed.
Did the trial court err in directing a verdict against plaintiff? In a blank form furnished by defendant, Melvin A. Strand applied for a 20-payment life insurance policy for $1,000, naming his father, Oscar Strand, as beneficiary. The application was procured by W. L. Mosgrove, soliciting agent, and was written by A. I. Scott, agent at Shelby. The medical examination of applicant, after a delay on his part,
“Conditional Eeceipt.
“Eeceived at Shelby, State of Nebr., this 23d day of Nov. 1923, of Melvin A. Strand the sum of twenty-nine and 2/100 dollars, in payment of premium upon $1,000 policy which he has this day applied for to the Old Line Bankers Life Insurance Company, of Lincoln, Nebraska.
“The applicant agrees to submit to such'medical examination as the company may require by an examiner approved by the company. Upon such examination, if application is approved, policy shall-issue. If disapproved, said payment is to be returned to the applicant. It is expressly agreed that a refusal by the applicant to submit to a medical examination shall forfeit the payment herein to the company. Policy to date at issue unless the insurance age has changed, in which event it shall date back within the age limit for which premium is paid. It is understood and agreed that all the premiums are due in advance and payable in cash; therefore, when notes are taken by the agent as an accommodation to the party insured, any refusal afterwards to accept the policy, or any tender of said policy back to the company or to an agent, will not in any wise release the party insured from liability on said notes.
“Melvin A. Strand, Applicant. W. L. Mosgrove, Agent.”
The question unanswered in the report of the medical ex
For the sake of brevity the chronology of events in 1923 is indicated thus: November 23, application drawn and signed, premium paid and the conditional receipt issued; November 24, application received at home office of defendant; November 29, Mosgrove instructed by defendant to urge prompt examination of applicant; November 30, applicant reminded that a report of his medical examination had not been received; December 6, medical examination; December 7, report of medical examination received at home office; December 10, Myers directed by letter from defendant to procure the ánswer omitted from the report of the medical examination; December 17, additional demand by defendant on Myers for the omitted answer; December 21, Scott inquired about the fate of the application; December 22, illness of applicant; December 23, applicant taken to hospital and operation for appendicitis performed; December 24, Scott advised by mail that the application was held up at the home office “pending the completion of the medical report,” and he was directed to see Myers and urge him to complete it; December 28, Myers, without further questioning of applicant, wrote in a separate document the answer “none” to the question, “Have you ever had inflammatory rheumatism ?” December 26, applicant died; December 27, application approved; December 28, undelivered policy prepared.
Plaintiff did not attempt to plead a cause of action for in
“The better reason and the decided weight of authority supports the doctrine that mere delay in passing upon an application for insurance cannot be construed as accepting such application and consenting to be bound for the insurance sought by it, nor can a cause of action for negligence be grounded upon such delay.”
Interstate Business Men’s Ass’n v. Nichols, 143 Ark. 369, seems to be á case of like import. Judge Cornish took the same view in Meyer v. Central States Life Ins. Co., 103 Neb. 640, 644.
On thé contrary, a right of action for negligence in failing to act promptly on an application for insurance has been recognized by some of the courts of last resort. Wilken v. Capital Fire Ins. Co., 99 Neb. 828; Duffie v. Bankers Life Ass’n, 160 Ia. 19; Johnson v. Farmers Ins. Co., 184 Ia. 630; Boyer v. State Farmers Mutual Hail Ins. Co, 86 Kan. 442. Cases on both sides of the question are discussed by the supreme court of Illinois in an opinion reported and annotated in 15 A. L. R. 1021, under the title of Bradley v. Federal Life Ins. Co. The case is reported also in 295 Ill. 381.
The view that there is a remedy based on negligence seems to be founded on reason and justice. The receipt in the present, case shows on its face that the insurance company, without assuming any insurance risk, accepted conditionally the first annual premium. The transaction makes the insurance company applicant’s trustee for the return of the premium if the application is rejected and for the unconditional acceptance of the premium if the application is approved and the policy delivered. In connection with
Is the evidence on the issue of actionable negligence sufficient to sustain a verdict in favor of plaintiff? The applicant bound himself by an agreement that there should be no contract of insurance except upon issuance and delivery of a policy to him while in good health. Under the terms of the receipt, defendant was required to return the pre
Defendant at its home office approves or rejects applications. Neither the soliciting agent nor the medical examiner had authority to contract for insurance. When the applicant died defendant did not have the information essential to the approval of the application. The omitted answer to the inquiry about rheumatism had not been received at the home office. It was material to the risk. The parties to the lawsuit so stipulated. There is no evidence of fraud or deceit on the part of any one connected with the negotiations or transactions. The circumstances indicate the good faith of the applicant, the defendant, the agents and the physician. Defendant twice demanded of Myers an answer to the question relating to rheumatism. . No one else was authorized to reduce answers of the applicant to writing. The examiner’s report signed by both applicant and physician declared on its face in plain type: “The medical examiner will invariably give the answers in his own handwriting.” Requests for the omitted answer were properly directed to him. In the application applicant represented the medical report “to be full, complete and true.”
In Duffie v. Bankers Life Ass’n, 160 Ia. 19, and in Wilken v. Capital Fire Ins. Co., 99 Neb. 828, cited by plaintiff, the information essential to the assuming of the risk was fully disclosed by the application or other documents when executed. There was no error requiring further time for examination and correction as in the present case. Such a difference was noted in Page v. National Automobile Ins. Co., 109 Neb. 127.
An earnest argument was directed to the propositions that the examining physician was negligent in omitting an answer to the question relating to rheumatism and in failing to report the answer later when requested by letter to do so, and that this negligence was attributable to defendant and prevented the delivery of a policy while applicant was in good health. The physician was employed by defendant
Affirmed.