The decision below, affirmed here, puts the case into this anomalous shape. The insured and the insurer's agent in effect agreed, orally, that, although Enge had pulmonary tuberculosis in an advanced stage, his life would be insured notwithstanding. The insured and defendant then contracted inwriting that there should be no insurance at all unless upon the date of the policy the insured was "alive and in sound health." He was not in sound health, then nor at any moment of the determinative period.
I submit that the policy never became effective as a contract.
The insurer's promise was "not absolute, but conditional, * * * the existence of life and sound health in the insured on the date of the policy is the condition upon which the promise is made. It is the fact of the sound health of the insured which determines the *Page 125 liability of the defendant, not his apparent health, or his or anyone's opinion or belief that he was in sound health." Murphy v. Metropolitan L. Ins. Co. 106 Minn. 112, 113, 118 N.W. 355,356.
The short but complete answer to all the argument for plaintiff "is that the policy never issued as an obligation of the company because the intestate was not in 'sound health' when the application was made or when the policy issued." Carroll v. Metropolitan L. Ins. Co. 258 Mass. 249, 253,154 N.E. 757, 759.
There is no question at all that the soliciting agent was the agent of the insurer. In devoting so much attention to proving what all admit, the real problem is overlooked, the failure being, it seems to me, to appreciate the fact that we are dealing with a condition precedent rather than a mere representation or warranty. The distinction between them "in connection with a contract is plain." Fondi v. Boston M. L. Ins. Co. 224 Mass. 6, 7, 112 N.E. 612, 613.
"A condition precedent, as known in the law, is one which is to be performed before the agreement of the parties becomes operative. A condition precedent calls for the performance of some act or the happening of some event after the contract is entered into, and upon the performance or happening of which its obligation is made to depend." Chambers v. N.W. Mut. L. Ins. Co. 64 Minn. 495, 497, 67 N.W. 367, 368, 58 A.S.R. 549. See also Redman v. Aetna Ins. Co. 49 Wis. 431, 4 N.W. 591; Anno. 59 A.L.R. 612.
"There is a general agreement * * * that a condition precedent is one that is to be performed before the agreement becomes effective." Mumaw v. Western S. L. Ins. Co. 97 Ohio St. 1,11, 119 N.E. 132, 135.
Except for the answers to the two or three questions involved, there is no suggestion that Enge was deceived as to the contents of the application. After all it was his application and not that of the agent. It was his offer to purchase insurance from defendant. The concluding stipulation of that offer, the one immediately preceding the signature of Enge, is that "this policy shall not take effect unless upon its date the Insured shall be alive and in sound *Page 126 health and the premium duly paid." So the insured got just the kind of a policy for which he applied, and it becomes immaterial whether he read it or not.
Among other things the policy contains a provision making it incontestable after two years. The decision of the majority makes that provision surplusage, for as the policy is now construed it was incontestable from date.
Of course a condition precedent may be waived; but it is elementary in the law of insurance, as well as one of the conditions clearly appearing from both the applications and the policies now before us, that no agent had the power to waive a condition precedent. The insurer was acting not only within its simple rights, but also in plain obedience to public policy in taking every possible precaution to avoid insuring the lives of persons already afflicted with an incurable and fatal malady. But if the majority opinion is sound, any agent soliciting industrial insurance, where medical examination is not required, may compel the insurance company, in spite of its plain and definite refusal to be bound by anything of that kind, to insure a life already doomed by cancer or other equally fatal disease.
In this case the simple fact is that the contract issued by defendant, as applied for and accepted by Enge, conditioned its going into effect upon the existence at its date of sound health. That condition was not fulfilled. In consequence there never was a contract, to say nothing of liability under it. The only cause of action is for the recovery of the premiums paid with interest.
Notwithstanding the technical argument about the supposed necessity for an actual meeting of the minds as between applicant and agent, I submit that the decision makes paramount and controlling what in legal result was a mere oral agreement between the insured and the insurer's agent, which the agent had no authority to make, as against the written contract of the insured and the insurer itself. Thus it seems to me we ignore in one ruling an elementary principle of the law of agency and another of that of contracts and evidence. It is still the law that an insurance policy *Page 127 is a contract, not to "be altered or contradicted by parol evidence"; and that it is "reasonable for insurance companies to make it matter of condition in their policies that their agents shall not be deemed to have authority to alter or contradict the express terms of the policies as executed and delivered." Northern Assur. Co. v. Grand View Bldg. Assn.183 U.S. 308, 361, 22 S. Ct. 133, 153, 46 L. ed. 213, 235.