Mutual Life Ins. v. Shoemake

Smith, C. J., delivered the opinion of the court. This is an appeal from a judgment awarding the appellee a recovery on two insurance policies on the life of her deceased husband. The facts are that on March 6, 1906, Shoemake applied 'in writing to Edwards, a soliciting agent for the appellant, for two policies of insurance for one thousand dollars each, payable to the appellee, his wife. This application among other things, provides: “The proposed policy shall not take effect unless and until the first premium shall have been paid during my continuance in goo'd health, and unless also the policy shall [505] have been delivered to and received by me during my continuance in good health.” Edwards forwarded the application to the appellant’s agent at Meridian, under whom he was working, who forwarded it to the appellant. On March 12th the'policies were issued by the appellant and mailed to its agent at Meridian, accompanied by a letter reading as follows: “Referring to application No. 745, R. V. Shoemake, delivery of policy [ies] herewith is subject to referee’s requirements, and statement signed by applicant that he does not do any .rafting or driving logs.” Paragraph 40, under the caption “Delivery of New Policies,” of a book of “Rules, Regulations, and Instructions,” issued by the appellant to its agents for their government in the transaction of its business, is as follows: “Not to be delivered. — A policy must not be delivered, nor the initial premium accepted, unless the applicant is in good health and his occupation as stated in application remains unchanged. This rule applies, regardless of the fact that the premium may have been previously collected. In any case of change in the applicant’s health or occupation, the policy must be returned at once to the manager with a statement of facts, that.he may ascertain from the company whether the policy should or should not be delivered, and, if delivered, upon what conditions.” On receipt of the policies the appellant’s Meridian agent forwarded them to Edwards at Laurel, Miss. Shoemake, who was an employee of the Warsaw Southern Lumber Company, told Edwards, when he applied for the policies, that if he was not at the lumber company’s camp, which was near Laurel, when the policies were ready for delivery, to leave them with Clayborn Bush, the lumber company’s paymaster. Edwards gave the policies to Bush for delivery to Shoemake on payment of the first premium. Bush held' the policies for several weeks, at the expiration of which time, Shoemake having failed to call for them, he returned the policies to Edwards. On March 31st or April 1st,, Shoemake became ill with a throat trouble which the ap [506] pellee and the witness Holster, hereinafter referred to, stated to be tonsilitis, and went to a hospital, where his throat was lanced, and where he died after remaining there six days. A physician testified that tonsilitis is not of it-n self a serious malady, but could become so by the tonsils becoming infected. After Shoemake had gone to the hospital, and after his throat had been lanced, Holster, a brother of the appellee, called on Edwards and asked for the policies, offering to pay the premium due on them. According to Holster, he was then asked by Edwards if Shoemake was sick, and he informed Edwards that Shoe-make was sick with tonsilitis. According to Edwards, he was informed by Holster that Shoemake was dangerously ill with some kind of throat affliction. Edwards then declined to deliver the policies, and returned them to the appellant’s Meridian agent, who returned them to the appellant. Shoeniake’s employment did not require him to “do any rafting or driving logsbut no statement to that effect, signed by Shoemake, was demanded by Holster by Edwards. One of the assignments'of error brings, under review the refusal of the court below to direct a verdict for the appellant. The ground on which this ruling is sought to be upheld by the appellee is that, the policies having been issued and forwarded to Edwards for delivery, the contract of insurance was consummated and the policies became effective when the premium to be paid thereon was tendered by Holster to Edwards. In the absence of an agreement to the contrary, the acceptance of an application for insurance, when communicated to the insured, consummates the contract without an actual delivery of the policy. Insurance Co. v. Herron, 56 Miss. 643. But in the case at bar the appellant’s acceptance of the application for insurance was not communicated to' Shoemake, and, in addition, the application expressly provides that the policies should not become effective unless and until delivered to and received by Shoemake while in good health. Consequently, [507] unless they were so delivered and received, the policies did not become effective. The contention of the appellee is that the delivery of the policies by the appellant to its agent with instructions to deliver them to Shoemake is in law a delivery to Shoemake, subject only to the payment by him of the premium thereon. It has been held, and we will assume for the sake of rhe argument, that the delivery of a policy by an insurer to its agent, with unconditional instructions to deliver it to the insured, is.in effect a delivery to the insured; but this rule can afford the appellee no relief, for, leaving out of view the effect of Shoemake’s illness would have had on the policies, had they been actually delivered to Holster by Edwards, and leaving out of view, also, the appellant’s special instructions to its agent that the delivery of the policies “is subject to the referee’s requirements,” etc., the agent’s general instructions were not to deliver policies “unless the applicant is in good health, and ... in any case of change in the applicant’s health or occupation, the policy [ies] must be returned at once to the manager, with a statement of facts, that he may ascertain from the ■company Avhether the policy [ies] should or should not be delivered, and, if delivered, upon what conditions.” ■ Assuming that the only information given to Edwards by Holster relative to Shoemake’s illness was that Shoe-make was ill with tonsilitis, nevertheless the fact is that Shoemake had then undergone a surgical operation upon his throat, and his condition was such as to require continued medical treatment. Whether this condition of Shoe-make was correctly reported to Edwards or not is not material, for, had he inquired further, he would have ascertained Shoemake’s actual condition, which was such as to make it the duty of Edwards, under his general instructions from the appellant, to return the policies to the appellant’s “manager, with a statement of facts, that he may ascertain from the company whether the policy [ies] should or should not be delivered, and, if delivered, upon what conditions.” [508] Edwards’ refusal to deliver the policies to Holster was therefore correct; consequently they never became effective, and the request of the appellant for a directed verdict should have been granted. Reversed, and judgment here for appellaiit. Reversed.