The opinion of the court was delivered by: GRIM
On an application form dated April 21, 1958, George T. Stimmel applied for life insurance from the defendant for himself and his family. Along with the application, Stimmel paid to defendant's agent $ 10.64 which was the full amount of the first premium for the type of insurance applied for.
Upon its receipt of the application, defendant caused an investigation of Stimmel to be made and an investigation report to be submitted to it. After receipt of this report, the company, by a decision at its home office in Newark, N.J., rejected the application for the type of insurance requested because Stimmel had a reputation for fast automobile driving.
However, the company decided that it would offer to insure Stimmel with another type of life insurance with a special class rating for which a higher premium was required.
The rejection by the defendant of Stimmel's application for insurance took place on May 1, 1958, and an insurance policy representing the type of insurance for which defendant was willing to insure Stimmel was prepared on May 2, 1958, but it was never delivered to Stimmel or accepted by him. Stimmel died on April 30, 1958, as the result of an accident. Defendant's employees in the home office who had rejected Stimmel's application did not know of his death when they rejected his application on May 1, 1958.
Plaintiff, Patricia Ann Stimmel, a named beneficiary, has brought this suit on the contention that the life insurance went into effect as soon as George T. Stimmel signed and delivered the application together with the first premium to the defendant's agent and that, consequently, the insurance was in effect when Stimmel died and defendant company owes the plaintiff beneficiary the amount of life insurance applied for. Defendant, on the other hand, contends that the insurance was not in effect when Stimmel died and that, consequently, it owes nothing to plaintiff except the amount of the first premium in the sum of $ 10.64, which had been paid to it.
Both plaintiff and defendant have moved for judgment in their favor. The facts have been stipulated.
The application for the insurance provided:
'* * * Except as may be otherwise provided in the Conditional Receipt Form * * * no insurance shall take effect unless a policy is issued by the Company and delivered to and accepted by the proposed Insured and the full first premium thereon is paid * * *.'
Incorporated by reference into the application is another document described as 'the Conditional Receipt Form'. This conditional receipt form provided:
'If the above payment (the $ 10.64 first premium) is made * * * and if the required and completed Part 1 and * * * Part 2 of the application and any medical examination, also designated as Part 2, and such other information as may be required by the Company are received by the Company at one of its Home Offices and if the Company after the receipt thereof determines to its satisfaction that the proposed insured, his wife and all dependent children proposed for coverage were insurable on the latest of the dates of said Parts 1 and 2 and said medical examinations on the plan, for the amount, for the benefits and at the premium rate applied for, the insurance in accordance with and subject to the terms and conditions of the policy applied for shall take effect as of the latest of the dates of the required and completed Parts 1 and 2 and any medical examinations required by the Company * * *
'In all cases where the insurance does not take effect in accordance with the preceding paragraph, no insurance shall take effect and the above payment will be refunded by the Company unless a policy is issued by the Company and delivered and accepted by the proposed insured * * * Any delay in refunding the above payment shall not be construed to create a contract of insurance or any liability on the Company except for a return of the above payments * * *.'
The plain and unambiguous meaning of the conditional receipt is that if the company, after certain information has been received by it at one of its home offices, determines to its satisfaction that the applicant and other members of his family are insurable, then and only after this determination of insurability has been made will there be any insurance.
Since no policy was issued by the company for the type of insurance requested nor received and accepted by the applicant, no contract of insurance was in effect under the terms of the application at the time of the applicant's death. Likewise since no determination of insurability for the plan, amount, benefit and premium rate applied for had been made by the company in accordance with its rights under the conditional receipt at the time of Stimmel's death, and since Stimmel in fact was not insurable on the plan and for the amount, benefit and premium rate applied for, no contract of insurance was in effect at the time of Stimmel's death.
Plaintiff contends that the present case is controlled by Stonsz v. Equitable Life Assurance Society, 324 Pa. 97, 187 A. 403, 107 A.L.R. 178 (1936). The facts of the ...