Opinion
Opinion delivered January 26, 1931.
1. INSURANCE — CONDITION PRECEDENT — WAIVER. — A provision in a life insurance policy requiring delivery to insured while in good health constitutes a condition precedent which may be waived by the insurer. 2. INSURANCE — DELIVERY OF POLICY WHILE IN GOOD HEALTH. — An insurer delivering a policy of life insurance without knowledge that insured was seriously ill was not estopped to set up a provision requiring a delivery to insured while he was in good health.
Appeal from Poinsett Circuit Court; W. W. Bandy, Judge; reversed.
Coleman Riddick, for appellant.
C. T. Carpenter, for appellee.
STATEMENT OF FACTS.
Louella Lacey sued the American National Insurance Company of Galveston, Texas, to recover $500 on a policy of life insurance.
The record shows that the American National Insurance Company of Galveston, Texas, issued a policy of life insurance, dated March 4, 1929, to Edward Lacey, aged twenty years, and Louella Lacey was named as the beneficiary. The policy recited that the weekly premiums were twenty-four cents, and that, if death occurred within six months from the date of policy, $500 was payable under it. The policy was issued subject to the terms included in the application.
According to the testimony of Emmett Park Lacey, father of Edward Lacey, he represented his wife, Louella Lacey, in the matter of making the proof of loss and otherwise presenting her claims for the amount due under the policy. He recollected that the policy bore the date of February 22, 1929. After his son's death, he made proof of death and sent it in to the company. Edward Lacey died of pneumonia in a hospital in St. Louis, Missouri, where he resided, on the 14th day of March, 1929. After his death, the policy was sent in to the company, and witness never saw it again.
According to the testimony of Grace Tucker, a sister of Edward Lacey, her brother lived with her in St. Louis, Missouri, and applied for insurance with the defendant company on the 18th of February, 1929. She recollects that he paid a premium of forty-eight cents at the time. He took sick on the 27th day of February, 1929, and the policy was delivered to her for her brother on the 4th day of March, 1929. To the best of her recollection the policy was dated February 22, 1929, and delivered on the 4th day of March, 1929. The agent of the company delivered it to her after her brother had been carried to the hospital. Her brother was taken to the hospital on February 27, 1929, ill with pneumonia and died of the disease March 14, 1929. He was confined to his bed from the date he was carried to the hospital until his death.
According to the testimony of the defendant, March 4, 1929, was the date on which the policy was issued. The application was received at the home office on or about March 1, 1929; and the policy was issued on March 4, 1929. The records of the company show that a deposit of ninety-six cents was made with the company's agent who took the application, dated February 20, 1929, and there was also another payment of twenty-four cents, making a total payment of $1.20 on the premiums of the policy. The application, which was part of the policy, contained the following:
"I further agree that no obligation shall exist against said company on account of this application, although I may have deposited premiums hereon, unless said company shall issue a policy in pursuance hereof, and the same is delivered to me on the day it bears date and unless on said date. I am alive and in good health, any statement of any agent to the contrary notwithstanding."
It was agreed between the parties that all questions of waiver are eliminated from the case. There was a verdict and judgment for the plaintiff, and the defendant has appealed.
(after stating the facts). The controlling question in the case is, did the applicant comply with the essential conditions contained in the policy and the application therefor upon which the insurance company's liability depended? In this view of the matter, it is immaterial to determine whether the policy was dated March 4, 1929, or was issued February 22, 1929, as contended by counsel for the plaintiff. The reason is that the application, which we have copied in our statement of facts, provides that no liability shall exist against the company unless the policy is delivered to the applicant while he is alive and in good health. In other words, the policy contained an express provision that it was not to become effective unless it was delivered while the applicant was in good health.
In Peebles v. Eminent Household of Columbian Woodmen, 111 Ark. 435, 164 S.W. 296, it was held that, provisions in an insurance contract of a mutual benefit association stipulating that there was no liability for benefits on the part of the insurance company unless the certificate or policy was delivered to the applicant while in good health was a condition precedent which might be waived by the insurer, since the provision is made for the company's benefit. That this is in accordance with the general rule on the subject, see case note to 5 A.L.R. 1575.
We can perceive no good reason why this rule should not be applied in the present case. The parties have agreed that the question of waiver of the condition in question on the part of the company is not in the case. Indeed, counsel for the plaintiff rely upon the case cited above and seek a recovery in this case upon the question of estoppel on the part of the insurance company. We are of the opinion that the facts and circumstances do not furnish any substantial evidence upon which to predicate estoppel on the part of the company. By invoking the doctrine of estoppel, counsel for the plaintiff seek to set aside or annul a condition precedent in the policy upon which liability of the defendant company is based. It seems to us that to hold the policy good under the circumstances of this case would be to abrogate and set aside the contract of insurance and to hold the company liable for the payment of a policy against the very terms of the contract.
The only escape from this conclusion is estoppel. Without knowledge, there can be no estoppel. It is not claimed that the applicant was not fatally sick at the time the policy was delivered on the 4th day of March, 1929. According to the plaintiff's own testimony, Edward Lacey had been carried to the hospital in the city of St. Louis on the 27th day of February, 1929, ill with pneumonia, and never got out of his bed from that date until his death on the 14th day of March following. It is not claimed, and the record does not show, that the company was informed of his illness or the serious character of it. This case is totally unlike the Peebles case cited above and relied upon by plaintiff, because in that case the company accepted premiums from the insured for a period of two years after the clerk of the local lodge had delivered the policy to the applicant. The court said that it would be manifestly unjust to permit an insurance company with full possession of facts that it intended to rely on to defeat the collection of the policy when it matured, to continue to demand and receive from the insured premiums as if there was a binding and valid contract of insurance.
Here the payment of premiums was small and inconsequential, and the time from the date of the delivery of the policy to the death of the applicant was too short for any legitimate inference that the company had estopped itself from relying upon the condition precedent in the policy. It is not claimed that there was any direct knowledge on the part of the company that the appellant was fatally ill when the policy was delivered, and there is no acceptance of premiums for any length of time after that. The time between when the policy was delivered and the death of the applicant from the disease with which he was suffering at the time the policy was delivered was entirely too short to support any legitimate inference upon which an estoppel could be predicated. As sustaining this view, we cite the following cases: Cable v. United States Life Ins. Co., 111 F. 19; Piedmont and Arlington Life Ins. Co. v. Ewing, 92 U.S. 377; Insurance Company v. Wolff, 95 U.S. 326; Langstaff v. Metropolitan Life Ins. Co., 69 N.J.L. 54, 54 A. 518; Reese v. Fidelity Mutual Life Association, 111 Ga. 482, 36 S.E. 637; Thompson v. Travelers Insurance Co., 13 N.D. 444, 101 N.W. 900; and Howell v. Prudential Insurance Co., 153 Ala. 611, 45 So. 208.
Therefore, the judgment will be reversed; and, in as much as the case seems to have been fully developed, the complaint will be dismissed here. It is so ordered.