Summary
In Bankers' Credit Ins. Co. v. Ayres, 223 Ala. 407, 137 So. 23, the policy provisions considered were like those before us. It was held that knowledge of insured's being seriously sick is the equivalent of knowledge that he is not in sound health when such life insurance contracts were procured and within the applicable terms. It is further declared that ordinary policy contracts are the measures of respective rights thereunder.
Summary of this case from National Life Accident Ins. Co. v. CollinsOpinion
7 Div. 64.
October 8, 1931.
Appeal from Circuit Court, Clay County; E. P. Gay, Judge.
Harsh Harsh, of Birmingham, for appellant.
Where an application for a life insurance policy, or the policy itself, or both, contain a provision to the effect that the policy shall not become operative until the first premium thereon has been actually paid to the company or to its authorized agent during good health of the applicant, actual payment of such first premium while insured is in good health is a condition precedent to the taking effect of the policy, unless waived. And a provision in the application or policy or both to the effect that only the president, vice president, secretary, or assistant secretary has power to change, modify, or waive the provisions of the contract, and then only in writing, is binding upon the applicant and policyholder, and neither the collecting agent or agent for delivery of the policy, who is not an officer of the company, can waive same. 1 Cooley's Briefs (2d Ed.) 693; National L. A. I. Co. v. Sherman, 222 Ala. 358, 132 So. 876; Powell v. Prudential Ins. Co., 153 Ala. 611, 45 So. 208; Commonwealth L. I. Co. v. Barr, 218 Ala. 505, 119 So. 11; Cherokee L. I. Co. v. Brannum, 203 Ala. 148, 82 So. 175; Satterfield v. Fidelity M. L. I. Co., 171 Ala. 433, 55 So. 200; Batson v. Fidelity M. L. I. Co., 155 Ala. 269, 46 So. 578, 130 Am. St. Rep. 21; Independent L. I. Co. v. Butler, 221 Ala. 501, 129 So. 468.
A. L. Crumpton, of Ashland, for appellee.
A condition that the policy shall not take effect unless delivered during the lifetime and good health of the applicant, being for the benefit of the company, may be waived by it or its agent possessing authority in the premises. 37 C. J. 405; U.S. L. I. Co. v. Lesser, 126 Ala. 568, 28 So. 646; State L. I. Co. v. Finney, 216 Ala. 132, 114 So. 132; Triple Link Ind. Ass'n v. Williams, 121 Ala. 138, 26 So. 19, 77 Am. St. Rep. 34; Pacific Mut. L. I. Co. v. Hayes, 202 Ala. 450, 80 So. 834; Modern Order Prætorians v. Childs, 214 Ala. 403, 108 So. 23; Miller v. Mutual Benefit Ins. Co., 31 Iowa, 216, 7 Am. Rep. 122. Where an agent has authority to deliver a policy and collect the premium therefor, he has authority to bind the company by his acts. Sun Ins. Co. v. Mitchell, 186 Ala. 420, 65 So. 143; Independent L. I. Co. v. Vann (Ala.App.) 130 So. 520; 37 C. J. 405; 32 C. J. 1137.
Pending the application for the policy of insurance here sued upon and before payment of premium or delivery of the policy, the insured became sick; had an attack of "flu," developing into pneumonia.
Meantime the application had been approved and policy sent to the Lineville National Bank, "Premium Collecting Agency" for the insurer, or to J. H. Ingram, president of the bank, for delivery upon payment of the premium.
The insured grew critically ill. His wife, the beneficiary, sent friends to Mr. Ingram with the money to pay the premium and receive the policy. The premium was paid, the policy delivered, and the insured died the night following.
While Mr. Ingram's version is that he had received the money and delivered the policy before learning of the sickness of the insured, the version of the messengers sent by Mrs. Ayres is that he accepted payment of the premium and delivered the policy after being informed that the insured was then "seriously sick." For the purposes of this opinion, this version will be taken as true. We further take it that knowledge of the insured being seriously sick is the equivalent of knowledge that he is not in sound health within the meaning of life insurance contracts.
The policy stipulates:
"This policy and application therefor, a copy of which is hereto attached and is made a part of the policy, constitute the entire contract."
"No person except the President, a Vice-President, the Secretary or an Assistant Secretary has power to change, modify or waive the provisions of this contract, and then only in writing. The Company shall not be bound by any promises or representation heretofore or hereafter made by or to any agent or person other than as above."
The application, made part of the contract, stipulates:
"I agree that inasmuch as only the President or Secretary of the Company has authority to determine whether or not a policy shall be issued on any application, no statement, promise or information made or given by or to the person soliciting or taking the application for a policy, or any other person, shall be binding on the company, or in any manner affect its rights, unless such statements, promises or information be reduced to writing and presented to the President or Secretary of the Company at the head office, in this application.
"I agree that the insurance issued in pursuance of this application shall in no event take effect or be binding until the written policy is delivered to the assured while in good health, and the full first premium paid."
Mr. Ingram was not an officer of the insurance company.
Passing over any question of fraud or collusion between the beneficiary and agent in seeking to put in force a policy under such circumstances, we must hold that an agent empowered to collect premiums and deliver policies is without power to waive the condition as to sound health, in the face of contractual stipulations to the contrary. North Carolina Mutual Life Ins. Co. v. Kerley, 215 Ala. 100, 109 So. 755; Powell v. Prudential Ins. Co., 153 Ala. 611, 45 So. 208; Massachusetts Mutual Life Ins. Co. v. Crenshaw, 186 Ala. 460, 65 So. 65; Commonwealth Life Ins. Co. v. Wilkinson, 23 Ala. App. 561, 129 So. 300.
In the Kerley Case, supra, the facts were analogous to those here presented. See, also, Southern Surety Co. v. Benton (Tex.Com.App.) 280 S.W. 551; National Life Ins. Co. v. Jackson, 161 Ark. 597. 256 S.W. 378; Reese v. Fidelity Mutual Life Ass'n, 111 Ga. 482, 36 S.E. 637; American N. Ins. Co. v. Floyd, 34 Ga. App. 541, 130 S.E. 531; Ward v. Metropolitan Life Ins. Co., 66 Conn. 227, 33 A. 902, 50 Am. St. Rep. 80; 2 Couch, Cyclopedia of Ins. Law, § 525d, p. 1579.
On the undisputed facts, the defendant was due the affirmative charge as requested.
Reversed and remanded.
ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.