the insurance proceeds on both policies applied for. By letter dated January 27, 1971, addressed to Otto Alden of Alden-Levine Associates, the vice president of defendant returned the two checks to cover the first premium on each of the applications because, in his underwriting judgment, the deceased was not a standard risk in accordance with the practices of defendant's underwriting and, therefore, stated that no insurance was in force at the time of decedent's death.
On June 30, 1971, decedent's widow and his parents joined as plaintiffs in bringing the diversity action here involved to recover the face amount of the insurance policies which they claimed were to be issued on the life of the deceased. The claim of the parents, Count I of the complaint, has been settled. All that is left is the claim by the widow under Count II of the complaint. In support of her motion for summary judgment, she argues that a contract of insurance for the face amount of the policy to be issued came into existence when her daughter deposited the envelope in the mailbox and, if not then, it certainly did when Bannon, a representative of defendant's general agent, signed the Conditional First Premium Receipt on January 18, 1971, the day after Recupito's death.
It is clear no written policy of life insurance was issued in this case. There is no evidence that the terms and conditions of a standard policy were to be effective prior to the issuance of the policy itself. The mere placing in the mail of a completed application with a check to cover payment of the first premium does not create a contract of life insurance. The application is but a proposal to contract. McAvoy Vitrified Brick Co. v. North American Life Assur. Co., 395 Pa. 75, 81, 149 A.2d 42, 45 (1959); Zayc v. John Hancock Ins. Co., 338 Pa. 426, 430, 13 A.2d 34 (1940); Munhall v. Travelers Ins. Co., 300 Pa. 327, 333, 150 A. 645 (1930); Toberg v. Knights of Columbus, 142 Pa. Super. 581, 16 A.2d 687 (1940). There could be no contract of full insurance until notice of acceptance of the application was given by some definitive act on the part of the defendant. No such act occurred here. If plaintiff had been present at Bannon's office on Wednesday, January 13, 1971, had signed the second application on that day and presented to Bannon her personal check in the amount of the first premium, there is nothing in the record from which it may be reasonably inferred that Bannon would have done anything more than execute the Conditional First Premium Receipt, remove it from the application, and hand it over to her or retain it for her. However, the conditional receipt did not give plaintiff the right to recover on the policy. Therefore, defendant is entitled to judgment of dismissal on plaintiff's claim under the policy.
Plaintiff does not appear to be making any claim under the terms of the conditional receipt. However, even if we give Count II of the complaint the liberal reading required by the Federal Rules of Civil Procedure and construe it as making a claim in the alternative for the lesser amount,
in my opinion, she would not be entitled to recover under that receipt. The execution of the receipt did not bring interim coverage into existence for it was not timely issued. There is no indication in the record that Bannon had actual authority to effect interim coverage -- when he knew that the proposed insured had already died, and he had no apparent authority to bind the defendant under the circumstances. See 4 Appleman, Insurance Law and Practice, § 2291, p. 244; Moffett v. Texas Employers Ins. Ass'n., 217 S.W. 2d 142, 144 (Tex. Civ. App., 1948).
The motion of the defendant for summary judgment will be allowed.
AND NOW, TO WIT, this 7th day of August, A.D., 1973, for the reasons stated in the foregoing Memorandum Opinion, the motion of defendant Inter-Ocean Insurance Co. for summary judgment is granted.