New York Life Ins. v. Levy's Adm'r

Judge NuNN

— Dissenting. The court in its opinion did not .discuss or pass upon the real question involved in this appeal. No one will take issue with the court in its opinion on the proposition that, to malee a binding contract, the minds of the parties must meet. When. one party makes a proposition, the other must accept the same, without any material change, to make it a contract. It is conceded by all that insurance may be obtained by oral or written contract, which will bind the company, until its *471officials stall pass upon and reject tlie application. One Egard was the agent of the company who took Levy’s application for the insurance. The printed form of application furnished him by the company, together with other proof, shows that he had the power and authority to enter into a contract with Levy, in consideration that Levy paid the premium in cash, to hind the company to take the risks on Levy’s life from that moment, for the term of twelve months, or until the company by its officials, had rejected the application and given the applicant notice thereof. The record shows that the agent, Egard, so explained the matter to Levy, and urged him to then pay the cash. The agent continued from the date of the application, December 30th, to the 20th of January, to urge Levy to pay the cash and let the company take the risk. On the morning of the 20th the agent entered the store of Levy and again urged him to pay the premium, and as an inducement proposed to buy from him some furniture. Then Levy delivered to the agent, for the company, the amount of the first premium, and took a receipt for same.

In the application for insurance made the 30th day of December, 1903, and signed by Levy, the following appears: “That the insurance under any policy issued, on this application, shall take effect as of date of this application, unless otherwise agreed in writing. ’ ’ The policies that were issued were both dated December 30, 1903. The last one was issued, however, on the 26th of January, 1904. The company contends, however, that it did not assume or carry any risks until the issual and delivery of the policy, in the lifetime of the assured. This is an unreasonable and unfair construction of the contract* *472It was understood and agreed that Levy was to pay the first premium, $776.90, in consideration, that the company would insure him for twelve months. Yet we find the company issuing-a policy on the 26th of January, and dating the policy hack to the date of the application, December 30, 1903, and claim it had not insured the applicant and that it had not assumed the risks until the issual and delivery of the policy, and as he was dead it was not liable. To sustain this contention allows the company to collect a premium for twelve months ’ insurance, and yet only actually insure for about eleven months. There is evidently something wrong with this construction of the contract. If the company’s construction, as upheld by the majority opinion, is correct, it is easy to understand how those in charge of insurance companies can waste and misappropriate so much of the policy holders’ money by contributing it to aid in political campaigns, and other ways, and yet remain solvent. In the receipt attached to the application this language appears: “That if a policy be not issued on said application and examination within sixty days from this date (meaning m tlris case December 30, 19Q3) said sum (meaning the first premium of $776.90) will be returned or surrendered on surrender of this receipt to the company.” Here we have a stipulation that the company may hold and use the premium for sixty days without any assumption of risks on its part, and then, if it declines to accept the risk, it shall return the money, without accounting for interest, but if it concludes, at the end of 60 days, to approve the application and accepts the risks, it issues a policy and dates it back to the date *473of the application, and secures a premium, from the insured sufficient in amount to pay for insurance for twelve' months, and, in fact, the insured only receives ten months’ insurance. The amount that each policy holder is beaten out of is comparatively small, but when you consider the millions upon mil-, lions of policy holders, the total amount made in that way by the company is immense. But the application contains another clause as follows: “That any payment in advance on account ot premium shall be binding on the company only in accordance with the agent’s or cashier’s receipt therefor on the company’s authorized form.”

What does this mean? Is it possible that this language was used for the purpose only of binding the company to return the premium to the applicant in' case it rejected his application? Certainly this was not the purpose of that clause. There was no clause needed to compel it to perform that simple and just act. Is it possible that the company by the use of this language meant to be understood that it was not bound to return a premium it had received from an applicant for insurance, when the application had been rejected by it, unless its agent or cashier had drawn the receipt in a particular manner and upon one of the company’s authorized forms? This construction of that clause is absurd. The meaning and purpose was to bind the company to carry the insurance on the applicant from tire time of the payment of the premium for twelve months, or until the company rejected the application and notified the applicant thereof. But the company says it did-not assume, nor was it bound for, the risk, because its agent in receiving the money from Levy 'did not give him a receipt upon one of its authorized *474forms. This and other courts have often decided that persons sni juris cannot in advance bind themselves that they shall only be bound by contracts made-in a particular way or written or printed upon a particular form, or kind of paper.

If I understand the majority opinion, it is, in effect, conceded that if Levy had paid the premium prior to the rejection of his application, and this date is fixed as the 19th of January, he would have been insured to that time; but at the moment of rejection the risk of the company would have ceased. I am at loss to understand upon- what authority or sound reason the court assumes such a position. It leaves the applicant in an unenviable position, without insurance, without his money to buy other insurance, and ignorant of the fact whether he would be compelled to apply to some other company for it.

The opinion states that the rejection of the application took place on the 19th of January. I find written on the face of the original application the following: “Jan. 20, 1904. Approved for $5,000.00.” “Jan. 26, 1904, approved for $5,000.00.” The proof shows that this was done a.t the home office of the company. The court construes the approval of the first $5,000 as a rejection of the application. This is rather a strained construction, but concede it to be correct, in my opinion it did not relieve the company of the risk it incurred on the morning of the 20th of January, when it received the money from Levy for the first premium, and as Levy died before the return of the premium, and before he was notified of the rejection of his application, the benficiary named in the application should be permitted to recover.

But the court says-in substance, although the agent *475taking Levy’s application bad the power to receive the first premium, and bind the company, yet the proof shows that this power and authority of the agent was limited so that it" could not incur any risk, unless the company approved the application. To illustrate this proposition: Suppose on the 30th day of December, 1903, Levy had paid the company the first premium, and the authorized form of receipt of the company had been executed, and the company then said to Mr. Levy, “You are now insured and will remain insured until the expiration of 60 days, unless we within that time reject your application, in which event you have never been insured.” If such was the contract, and the appellant had died before the issual of the policy, all the company would have had to do to relieve itself from the loss would have been to reject the application. Suppose some-witness did in effect make this statement; can this court believe, or is it compelled to believe, that an insurance company or an individual would make such an unfair and unconscionable a bargain with any one, or, if made, is it possible that this court will uphold such an agreement? “I take your money, and you are insured from this moment, provided I accept your application, but I take 60 days to consider your application, and if you die before I issue your policy I will reject it, and relieve myself of responsibility.” This, in substance, is the contract that the court says was proven in this ease.

For these reasons, I dissent from the opinion of the court.