Miller v. Northwestern Mut. Life Ins. Co. of Milwaukee

Life Insurance—Creation of Contract—Authority of Local Aoknt. An application for life insurance was made and delivered to a local agent, containing a clause that no statement or representation made by or to the agent should be binding on the company unless reduced to writing and approved by its officers at its home office, in another state. The applicant gave his check for the amount of the first premium to the agent on the statement of the latter that if he did so the insurance would be in effect from that date, but that the company would have to approve the application. The application and check were forwarded to the state agent, who retained the check and sent the application to the company, Which wrote for further information in certain particulars. In reply the applicant wrote directly to the company, giving such information, and stating that if not satisfactory it should consider the application withdrawn and return his check. The company rejected the application, and so advised the state agent, who wrote the local agent, notifying him of the fact, and returning the payment received. On the day such letter was written the applicant died, hut neither the company nor the state agent had any notice of his sickness until after his death. The executor refused to accept repayment of the money, and sued to recover the amount of the insurance. Meld, that no contract of insurance, was made; that the local agent had no authority, either actual or apparent, to make the same, even if he had attempted to do so, and the applicant evidently understood such fact, as shown hy his letter asking the company to consider his application “withdrawn” if his statement was not satisfactory, and was not misled so as to create any estoppel against the company.

In Error to the Circuit Court of the United States for the Western District of Virginia. In June, 1898, the defendant, a life insurance company created hy and organized under the laws of the state of Wisconsin, with its home office at Milwaukee, was doing business in the state of Virginia; T. A. Cary at Richmond, Va., being its state agent, and Wm. H. John its local agent at. Coeburn, in said state. On the 7th day of June, 1898, Hobart Miller, the plaintiff’s testator, who lived at Coeburn, made application through John, the local agent, for a $5,000 policy under the 20-year endowment plan of said company. The application consisted of three parts, numbered 1, 2, and 3. Tart 1 of the application was signed by Miller, and was dated at Coeburn op the 7th day of June, 1898. This part contained a clause to the effect that no statements, representations, or information made or given by or to the agent taking the application for the policy, or to any other person, should be binding on the company, or in any manner affect its right, unless such statements, representations, or information were reduced to writing and presented to and approved by the officials of the company at the home office. It was further stipulated in the said part that all the statements and answers written in the application, including those thereafter to be made to the medical examiner, were warranted to be true, and to bo full and fair answers to the questions offered to the company as a consideration for the contract for insurance, and, further, that the contract should not take affect until the first premium was paid during the life of the person proposed for insurance, and while he was in good health. On the 13th of June, 1898, Miller executed parts 2 and 3 of the application, by submitting to a medical examination, which was required by the rules of the company under the terms of the application. On the 14th of June, 1898, Miller paid to John, the local agent, by his check' of that date, $241.20, and took the following receipt: “Received of Hobart Miller $241.20, as first annual premium on policy for $5,000 with Northwestern Mutual. “[Signed] ■ Wm. H. John.” The following was John’s testimony, and the only evidence on the trial, relative to what occurred between him and the applicant in connection with the payment of the premium: “I could not be positive, but I know the conversation occurred between Mr. Miller and myself either on a prior occasion or at that time [meaning when the receipt was given], and it was something like this: When I asked him if he wanted to accompany the application With a payment, he asked what would be the difference, and I told him if the check accompanied the application the insurance would be in effect from that date; and before I could say anything he said, ‘Of course, the company must a» eept the application.’ I said the company would have to approve it, and he said, ‘Yes.’ ” On the date the cheek was given, John forwarded the application, consisting of the three parts, with applicant’s check for the premium, to Cary, the state agent at Richmond. It reached Cary on June 10, 1898. Cary, finding- that the' application was in some respects inaccurately made out, returned it on the same day that he received it to John for correction; and it came back to Cary corrected, and was received by him on the 20th of June, 1898, and he mailed it the same day to the home office (if Hie company, at Milwaukee, where it was received .lime 22, 1898, ill due course ol' mail. The check, however, Cary retained, and placed to his own credit in a Richmond bank. Miller, In his medical examination, when asked as to the use of intoxicating beverages, made a statement showing that he drank both whisky and boor, and sometimes in more than moderate quantities, but stated further that he had used neither whisky nor beer to the extent of intoxication during the past 10 years. On the 24th of June, 1898, the medical director of the company at Milwaukee wrote Cary, the agent at Richmond, calling his attention to the answers of the applicant relative to the use of intoxicants, and asking for additional information on that subject. This letter was received by the Richmond agent on the 27th of June. 1898, and on the same day he communicated its contents to John, the local agent at Coeburn. in a letter of that date. John informed Miller, and the latter wrote a letter on July 1st from Coeburn, addressed directly to the company, which is as follows; “Northwestern Mutual Rife Insurance Company, Milwaukee, Wis.—Gentlemen: Your Mr. W. II. John, of this place, has shown me your letter to him of the 27th oí June, and has asked me to write you, covering the ground outlined by it. Dr. Wolfe and 1 both thought the questions propounded upon the application blank had been fully answered, but I will try again. It is impossible to make a statement showing just what I drink a day, for sometimes I take nothing for several days, and then, again, if I am with friends I drink more freely than ordinarily. I very rarely drink beer in winter, and in summer I very rarely drink both beer and whisky upon the same day. Occasionally I do so, but very occasionally. My drinking depends greatly upon circumstances, and varies greatly. I drink half a pint of whisky a day occasionally only,—say once in two weeks. I hope this statement will be satisfactory. If it is not, please return me the check forwarded to you. and consider my application as withdrawn. I have already, without any fault of my own. been out of my money since June 141 h, and I do not care to let the matter drag any longer. Truly yours, “ [Signed 1 Hobart Miller.” This letter was transmitted by John to Gary, the state agent at Richmond, and was received by the latter on the 5th day of July, 1898, and was immediately on the same date transmitted to the home office of the company at Milwaukee, where it was received on the evening of July 7, 1898. On July 9th the application of Miller, together with his letter of July 1st, was finally considered by the medical department of (he company, and the application unconditionally rejected on account of the habits of the applicant. The agent, at Richmond was advised of this action by letter from the home office of the company dated July 9, 1898, which was received by him on July 11th; and on the same day tiie agent at Richmond sent notice of the rejection of the application to John, the local agent at Coeburn, Va., inclosing with the notification a check to the order of Hobart Miller, the applicant, for the 8241.20 which had been previously paid as premium. On the lltli of July, 1898, the applicant died from sickness, and when the letter of notification that the application for insurance had been rejected and the check reached John, at Coeburn, the applicant was dead, and there was no one to whom the check could he paid. The defendant liad no notice of applicant's sickness at the time the apolication was rejected; nor was the agent at Richmond informed of his sickness and death when the notice was received by him and forwarded ro John, the agent at Coelmm. The applicant, Hobart Miller, left a last will and testament, which was duly admitted to probate in the county of Wise, in file state of Virginia, and the present plaintiff, Ifl. Spencer Miller, was duly qualified as executor thereof. As soon as the plaintiff qualified as executor, John tendered him the 8241.20 premium which had been paid by liis testator, but Ílie plain!iff declined to accept it, and the same was deposited by the agent to the plaintiffs credit in a national bank in Philadelphia, where it still remains. This suit was then brought by the executor in the circuit court of Wise county, in the state of Virginia, and removed by the petition of defendant to the circuit court of the United States for the Western district of Virginia, on the ground of diverse citizenship. The plaintiff’s action is trespass on the ease in assumpsit, and he claims damages in the sum of $5,000, and interest from the 11th day of July, 1898. The circuit court, in the trial, after hearing the evidence, directed a verdict for the defendant, and it was so returned by the jury, to which the plaintiff excepted, and sued out his writ of error, by which the case is brought here for review.