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decided: June 17, 1966.


Appeal from judgment of Court of Common Pleas of Allegheny County, Jan. T., 1959, No. 90, in case of Armene Crawford v. The Manhattan Life Insurance Company of New York.


John M. Means, with him I. Martin Wekselman, and Smith & Hodel, for appellant.

G. Donald Gerlach, with him Reed, Smith, Shaw & McClay, for appellee.

Ervin, P. J., Wright, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. (Watkins, J., absent). Opinion by Hoffman, J.

Author: Hoffman

[ 208 Pa. Super. Page 153]

This is an appeal by Armene Crawford, appellant, from an order of the lower court entering judgment n.o.v. in behalf of appellee, The Manhattan Life Insurance Company of New York (Manhattan). The action arose out of appellant's attempt to recover the face amount of a life insurance policy issued by Manhattan on the life of appellant's husband, Roy Crawford.

On or about August 20, 1956, Roy Crawford, a resident of West Virginia, submitted an application for a life insurance policy to Northwestern Mutual Life Insurance Company (Northwestern), through Robert Law, an authorized agent of Northwestern. This application disclosed that Crawford had been hospitalized for a heart attack in 1950 and again in September 1955 for overexertion and dyspnea. Northwestern rejected Crawford's application. Law, thereupon contacted the general agent of Manhattan in Pittsburgh and forwarded to him, along with other information, the medical portion of the Northwestern application.

After reviewing the Northwestern application, Manhattan indicated that it would consider a maximum

[ 208 Pa. Super. Page 154]

    policy of $10,000. On September 28, 1956, Roy Crawford submitted an application to Manhattan. In this application Crawford failed to answer a question concerning prior treatment by physicians. On October 26, 1956, Manhattan forwarded the policy to its general agent in Pittsburgh to be delivered subject to a signed amendment by Crawford answering the question relating to prior medical treatment. The policy and amendment forms were then sent to Law in West Virginia. After several conversations with Law, Crawford signed the amendment which was then returned to the general agent. It is clear from uncontradicted hospital and physician's records that the application, as amended, contained misstatements of fact.

The Manhattan policy provided that, "All statements made by, or by the authority of, the applicant for the issuance of this policy shall be deemed representations and not warranties."

The lower court, in granting judgment n.o.v., applied the law of West Virginia with respect to misrepresentations in insurance policies. Appellant contends, however, that the court should properly have applied Pennsylvania law. In passing on this question, we must, of course, apply the conflict of laws rules of our courts. Restatement, Conflict of Laws, § 7 (1934).

Under the traditional Pennsylvania rule, the construction of a contract is governed by the law of the state where the contract was made. An insurance contract is "made" in the state in which the last act legally necessary to bring the contract into force takes place. The place of making an insurance contract is the place of delivery, where delivery is the last essential act. Ruhlin v. New York Life Insurance Company, 106 F. 2d 921, 923 (3d Cir. 1939). In the instant case the policy provided that the insurance shall take effect "when the policy has been issued, delivered and the first full premium thereon paid."

[ 208 Pa. Super. Page 155]

The place of delivery, however, varies with the method of delivery. "If the policy becomes effective upon delivery by mail, the place of contracting is the place of posting. Restatement, Conflict of Laws, § 317. If it becomes effective upon delivery and is sent by the company to its agent and by him delivered, the place of contracting is the place of delivery to the assured. Restatement, Conflict of Laws, § 318. In the absence of any proof as to the place of delivery, in the case of life insurance contracts, there is a presumption of delivery at the residence of the insured. Faron v. Penn Mutual Life Insurance Company, 3 Cir. 1949, 176 F. 2d 290; Harry L. Sheinman & Sons v. Scranton Life Insurance Company, 3 Cir. 1942, 125 F. 2d 442." Edwards v. Commonwealth Mutual Fire Insurance Company of Pennsylvania, 197 F. 2d 62, 64 (3d Cir. 1952). Accord Roth v. Maryland Casualty Company, 209 F. 2d 371 (3d Cir. 1954). Restatement, Conflict of Laws, § 332 (e) (1934).

Appellant contends that delivery occurred when the general agent posted the policy in Pittsburgh. She concludes, therefore, that Pennsylvania law should apply, since "Law was Crawford's agent for purposes of receiving the mailed policy and delivering the policy to Crawford . . . There was nothing further to be done. The premium had been paid in advance and the policy was in effect at the time [the original application] was signed in Pittsburgh on September 28, 1956 by reason of the provision contained in paragraph (d) of Part I of the application."*fn1

[ 208 Pa. Super. Page 156]

Appellant's contention is inaccurate. Her own evidence demonstrates that when the policy was mailed to Law by the general agent, it was to be delivered "subject to signed amendment." In this case, the last act necessary to bring the insurance contract into force was the signing of the amendment by Crawford in West Virginia to be followed by delivery of the policy. Thus, under our conflict of laws rules, West Virginia law should apply, since, in the absence of proof to the contrary, there is a presumption that delivery was at Crawford's residence.

The result would be the same even if the standards enunciated in Griffith v. United Air Lines, 416 Pa. 1, 203 A.2d 796 (1964), are applied in this case. Under Griffith the law of the state which has the most significant relationship with and interest in the occurrence and the parties would control. McSwain v. McSwain, 420 Pa. 86, 215 A.2d 677 (1966); Elston v. Industrial Lift Truck Company, 420 Pa. 97, 216 A.2d 318 (1966).

West Virginia's interest in this insurance contract and the rights of the parties is apparent and significant. The insured was a resident of West Virginia; the policy was solicited in West Virginia; the application and amendment were prepared in West Virginia; the policy was delivered in West Virginia; and the beneficiary is a resident of West Virginia. Cf. Exchange National Bank of Olean v. Insurance Company of North America, 341 F. 2d 673 (2d Cir. 1965).

[ 208 Pa. Super. Page 157]

Pennsylvania, however, has relatively little interest in this suit between Manhattan, a New York insurance company, and appellant, a West Virginia resident. Our Commonwealth's only contact with this case is the location of Manhattan's general agent in Pennsylvania. Similarly there would be little reason to apply the law of New York simply because Manhattan's home office is located there. As the U. S. Court of Appeals in Exchange National Bank of Olean v. Insurance Company of North America, supra, recognized in applying Griffith : "The hope of achieving uniformity in the interpretation of the controverted clause by having the interpretation of the courts of the state of the home office control . . . is illusory in this case, since we are dealing with a standard clause used by innumerable insurance companies, whose home offices are scattered throughout the fifty states." (p. 675).

The fact that Manhattan was not licensed to do business in West Virginia does not affect this result. "If the insurer does business in a state by soliciting members and issuing policies therein, its contracts so made are governed by the laws of that state whether or not it applied for the privilege of doing business therein." 12 Appleman, Insurance Law and Practice, § 7073, p. 103 (1943). See Fleet Messenger Service, Inc. v. Life Insurance Company of North America, 315 F. 2d 593 (2d Cir. 1963).

We conclude, therefore, as did the lower court, that West Virginia law is properly applicable in the instant case.

The law with respect to misrepresentations in West Virginia was set out by the Supreme Court of Appeals of West Virginia in Myers v. Mutual Life Insurance Company of New York, 83 W. Va. 390, 98 S.E. 424 (1919): "In many of the cases it has been argued that where such a representation is ...

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