Shook v. New York Life Insurance

Opinion by Mr. Chief Justice Schaffer, Plaintiff sues to recover $3,000, claimed to be due to ber by defendant, on a life insurance policy covering ber fifteen year old son. Recovery was had in tbe court below. From tbe refusal to enter judgment in its favor tbe insurance company appeals. In June, 1935, plaintiff and ber husband decided to take out a policy on each of tbeir lives and also one on tbeir fifteen year old son. Tbe son’s application, signed by bim, and dated June 1, 1935, stipulates: “It is mutually agreed as follows: 1. That tbe insurance hereby applied for shall not take effect unless and until tbe policy is delivered to and received by tbe applicant and tbe first premium thereon paid in full during bis lifetime.” Tbe premium was $43.67. It was also provided that only certain named executive officers of tbe company “can make, modify or discharge contracts or waive any of tbe company’s rights or requirements.” About tbe middle of that month tbe soliciting agent came to plaintiff’s home and banded ber tbe policy on ber son, which is dated June 10, 1935, and said to ber, as she testified, “This policy is in full benefit.” According to tbe testimony of tbe husband and wife, tbe husband then asked tbe agent bow much be owed bim, tbe agent answered, “Wait until I have tbe other two policies and then we will settle it all at once.” Plaintiff said she intended to pay tbe premium by check but did not do so because of what tbe agent said. Tbe conversation was denied by tbe agent, who testified that she and ber husband stated they bad been expecting some money and did not think they were going to get it and would have to talk tbe matter over and see whether they could accept tbe policy or not. Tbe agent said be left the policy for inspection, intending to pick it up tbe next day, but did not do so, and subsequently, when be called to get it, plaintiff was not at home. Tbe agent admitted that be bad violated a rule of tbe company which required bim to take an inspection *187 receipt from plaintiff when lie gave her the policy without receiving the premium. The policy remained in plaintiff’s possession until the boy was accidently killed on August 5,1935. On that day it was given to the agent by plaintiff under circumstances which are in dispute and he returned it to the company, which destroyed it. He testified that when she handed him the policy she said, “it was too bad they had not gone through with the insurance, and managed some way to pay for it and take it.” This she denied. Suit on the policy was not brought until three years later. The plaintiff was declined by the company as a risk. No policy was issued to the husband. After the son’s death, the father tendered to the company the amount of the premium, which was refused. The policy contained a clause which reads: “This contract is made in consideration of the application therefor and of the payment in advance of the sum of $43.67, the receipt of which is hereby acknowledged, constituting the first premium and maintaining this Policy for the period terminating on the Tenth day of June nineteen hundred and thirty six . . .”. Notwithstanding this receipt for the premium, plaintiff cannot recover if she admits it was never paid. To permit the plaintiff to recover under such circumstances would violate the prohibition against discrimination among policy holders provided by the Act of May 17, 1921, P. L. 789, sections 635, 636, 40 PS sections 275, 275: Katchmer v. Prudential Ins. Co., 325 Pa. 69, 188 A. 869; Harrisburg Trust Co. v. Mutual Life Ins. Co., 278 Pa. 255, 122 A. 292; Landy v. Phila. Life Ins. Co., 78 Pa. Superior Ct. 47, (Linn, J.). She is the beneficiary of the policy. She categorically admitted on the trial that she had never paid the premium. The husband makes no claim that he paid it. He tacitly admits that he did not by tendering the amount of it after the boy’s death. Paced with tbip situation, plaintiff assumes the position that the premium may be presumed to have been paid by the insured, *188 her fifteen year old son, who was a school boy. In this connection, it is argued in her behalf in the brief, “Whether or not one might think it reasonable or likely or probable that a fifteen-year-old insured had paid the premium on the policy, there is no affirmative evidence— there is no evidence whatsoever — that he did not. The person to whom the policy was issued was the minor, Charles. Although the mother stated that she did not pay the premium when the policy was delivered, and although there is also an inference that the father, George Shook, did not pay the premium, nevertheless, the defendant did not produce one bit of evidence to show that the insured had not, or was unable to pay the first premium, or that he had not delivered the same to the agent Mercer or to the company itself.” It certainly would be a violent assumption to presume that a fifteen-year-old school boy would have $43.67 to pay an insurance premium. It is not even hinted by the mother or father in their testimony that he had done so or could have done so. If such had been within the possibilities, one or the other of them would have advanced the idea. It taxes credulity beyond the limits of sensible conclusion based on human experience to suppose that the boy had any such sum and appropriated it to the payment of the premium. This contention is advanced in order to bring the case within the ruling in Eaton v. New York Life Ins. Co., 315 Pa. 68, 172 A. 121, but the cases are not parallel. In that case, there was no admission that the premium had not been paid by the person who procured the policy. Under their own testimony, plaintiff and her husband agreed to the postponing of the time of payment of the premium until the other two policies were delivered. As they never were delivered, the time for payment of the premium did not arise. Plaintiff held the policy with the understanding that the premium had not been paid. Judgment is reversed and is here entered for defendant.