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THOMAS v. CHESAPEAKE LIFE INSURANCE COMPANY (12/11/73)

decided: December 11, 1973.

THOMAS, APPELLANT,
v.
THE CHESAPEAKE LIFE INSURANCE COMPANY



Appeal from order of Court of Common Pleas, Trial Division, of Philadelphia, July T., 1968, No. 1484, in case of Ella M. Thomas v. The Chesapeake Life Insurance Company.

COUNSEL

Leonard B. Rosenthal, with him Albert Momjian and Abrahams & Loewenstein, for appellant.

Edward Blumstein, with him Anthony T. Vanore, and Elkman, Blumstein and Block, for appellee.

Wright, P. J., Watkins, Jacobs, Hoffman, Spaulding, Cercone, and Spaeth, JJ. Opinion by Spaeth, J.

Author: Spaeth

[ 226 Pa. Super. Page 361]

This is an action in assumpsit. Appellant (plaintiff below) claims that because of her husband's death she is entitled to life insurance benefits. It was agreed that the trial judge should decide the case without a jury

[ 226 Pa. Super. Page 362]

    and on the pleadings, depositions, and briefs. The judge found for appellee (the life insurance company), and the court en banc dismissed exceptions to his finding.

On February 22, 1968, appellant's husband applied for a life insurance policy with appellee. A "binding receipt" was issued upon payment of $11.20, an amount equal to the policy premium. The conditions stated on the back of the receipt included: "Any insurance applied for . . . shall take effect on the date of the application or date of corresponding medical examination, whichever is later, provided that (a) the full first premium at the Company's published rates for the policy applied for has been paid at the time of making application therefor and declaration of such payment is made therein, (b) the Proposed Insured is on said effective date a risk acceptable to the Company under its rules, limits and standards, on the plan, for the amount, and at the rate of premium declared paid, and (c) no erasures or alterations have been made on the front or back of this printed form . . . ."

On May 14, 1968, appellee declared appellant's husband an unacceptable risk for the class and at the rate at which he had applied. This was based on information supplied by a doctor who had examined appellant's husband, as required by the policy, and had found him overweight for his height. However, appellant's husband was eligible for insurance in a special premium class at an increased rate, and appellee forwarded to its agent a policy and an amendment to the original application which appellant's husband was to sign and return. These materials were left at appellant's home shortly before her husband's death;*fn* he never saw them,

[ 226 Pa. Super. Page 363]

    nor signed them, nor was the higher premium paid during his lifetime.

Appellant does not deny that there was a violation of the condition expressed in the binder: "[O]n the date of the application for the policy or date of corresponding medical examination, whichever is later," appellant's husband was overweight and was therefore not "a risk acceptable . . . on the plan, for the amount, and at the rate of premium declared paid." She argues, however, that this condition was a condition subsequent, not precedent, to the existence of an effective insurance contract; that therefore her husband was covered by a contract of temporary insurance that arose on the date he took the medical examination; and that this temporary coverage was to continue until a policy was issued or the risk was rejected and notice of the rejection given to the insured. Since, appellant contends, there was no notice of rejection prior to her husband's death, appellee is bound under a contract ...


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