Porter v. Mutual Life Ins.

Munson, J. The first question to be considered is whether there was a completed contract of insurance between the applicant and the company. By the terms of the application the premiums were to be paid semi-annually, and the contract was not to take effect until the first premium was [507] paid. The application recites the payment to the soliciting agent of an amount equal to one-half the annual premium, and acknowledges the delivery to the applicant of a binding receipt therefor, signed by the secretary of the company, and making the insurance in force from the date of the application, provided the application should be approved and the policy be signed by the secretary. The premium was not paid otherwise than by the delivery of a note, which stated that it was given for the premium and was to be void if the company declined to issue the policy. This note was payable to the order of the soliciting agent, who delivered it to the local agent for whom he was working, by whom it was afterwards retained. This agent sometimes accepted notes for first premiums, and at the end of each month he remitted in cash to the general agent for all first premiums received. The company accepted this application, and issued a policy to the applicant bearing date September 17, 1895, and forwarded the same through the customary channel to the local agent, who retained it until November 8, without notifying the applicant that it had been issued, and without being applied to by the applicant in regard to it. On that day the agent saw the applicant and asked him to pay the note and take the policy, which he declined to do; and both note and policy remained in the agent’s hands until' the applicant’s death. The issuance of the policy upon an application which recited that the premium had been paid to the agent is sufficient proof that the agent had authority to receive the premium. And it is said in May on Insurance, § § 134 and 360, that an agent authorized to receive payment of premiums has a discretion as to the mode of payment, and may accept a note instead óf the money, and that if he arrange with the applicant to become responsible to the company for the premium and to hold the applicant as his personal debtor therefor, this will be a waiver of the provision that the policy shall not be valid until the [508] premium is paid. It is not necessary to inquire whether these propositions are fully sustained by the cases cited in their support, for upon the findings in this case it must be held that the company received the first premium in the next monthly remittance of the agent, and this being the case the company cannot complain that the payment was not made by the insured. Ostrander on Fire Ins. 37. But if the findings were to be construed to limit the agent’s remittances to the cash receipts, this would not change the result. If he did not remit for the notes, the remittances would not correspond with the policies issued, and this would show that credits were given; and the authorities are clear that when such a practice is known the company will be liable. It was not necessary to the completion of the contract that the policy should be actually delivered to the insured. The issuance of a policy in accordance with the terms agreed upon, and its transmission to the agent for unconditional delivery to the insured, is tantamount to a delivery. The applicant was entitled to the possession and control of the policy from the moment it was received by the agent, and the custody of the latter must be treated as that of the insured. May Ins. § 60; Ostrander Fire Ins. § § 45, 71. If the policy is in accordance with the terms proposed, it is clear that upon tendering the policy to the applicant the agent could have enforced collection of the note when' due, •and that if the applicant had died after the policy was transmitted to the agent and before the interview between them, the company would have been liable. There had been such a payment of the premium and such a delivery of the policy as completed the contract. The policy conformed to the application in all respects, except that the application called for insurance from its date, while the policy was dated eight days later. This variance worked no injury to the applicant in the circumstances, and his subsequent rejection of the policy was based entirely upon other grounds. In the absence of any complaint by the [509] insured, we see no ground upon which the company can take advantage of the discrepancy. This completed contract between' the applicant and the company could not be rescinded without the consent of both parties. The case shows no assent on the part of the agent to the attempted rescission of the insured. He continued to hold the note and demand its payment. It is obvious that &e Could have enforced its collection as against every objection that was urged. The contract remained unchanged until the moment of the insured’s death, and the company could not afterwards do what it had refused to permit the insured to do. The intestate’s action in the procurement of other insurance, and the fraudulent conduct of his brother in obtaining possession of this policy, are not controlling. Judgment reversed and judgment for plaintiff for one thousand dollars with interest from March 13, 1896.