Case Name: Metropolitan Life Insurance Co. v. Moore
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1904-02-16
Citations: 117 Ky. 651
Docket Number: 
Parties: Metropolitan Life Insurance Co. v. Moore.
Judges: 
Reporter: Kentucky Reports
Volume: 117
Pages: 651–655

Head Matter:
Case 76 — 'Action by Annie M. Moose against Metbopolitan Life Ins. Co, upon a Policy on the Life of Abram R. Moobe fob Heb Benefit.
Feb. 16.
Metropolitan Life Insurance Co. v. Moore.
APPEAL FROM HOPKINS CIRCUIT COURT.
Judgment for Plaintiff. Defendant Appeals.
Affirmed.
Life Policy — Sound Health at Time of Delivery — Tendering Back Premium.
Held: 1. Condition in a life policy that it is not binding unless on the date tof delivery the insured is in sound health, applies only to unsoundness of health arising after the application.and medical examination.
2, To prevent recovery on a life policy hy reason of the condition that it ia not binding unless insured is in sound health at the date cf its delivery, the insurer should tender bach the premium received hy it.
R. H. CUNNINGHAM and F. M. SACKETT, counsel for appellant.
PROPOSITIONS AND AUTHORITIES.
The only question on appellant’s appeal arises as follows:
1. Issues presented in pleadings were not tried hy court.
2. Judgment was given on face of pleadings for plaintiff, while the defense that the breach of a condition precedent to the right to recover was still an issue and untried. ■
3. 'Where a policy of life insurance provides that the obligation of the policy does not attach unless on the date «f delivery the insured is in sound health; and where such is set up in answer and it is alleged on that date the insured was .not in sound health, a valid defense to recovery on the policy is made. 19 Am. & Eng. Ency. Law, 2d ed., p. 61; M. L. I. Co. v. Howe, 62 O. S., 204; Carson v. M. L. I. Co., 1 Pa. Sup. Co., 572;, Plumb v. Penna M. L. U. Co., 108 Mich., 94; Packard v. M. L. I. Co.,. Jan. 6, 1903, 71 N. H.
JOHN G. B. HALL and C. J. WADDELL, attorneys eob appellee.
The sole question presented on this appeal is this: Did the lower court err in rendering judgment on the face of the papers without, according to defendant, a jury trial on its supposed defense that the policy never became a binding contract because insured was not in sound health when the policy was delivered?
This attempted defense is not available for reasons shown on the face of the papers. .
1. The provision as to the applicant being alive and in sound health when the policy is delivered, refers solelly to a change in condition from that existing at the time of application and medical examination, and! “sound health” is co-ordinate with “alive,” both in logical and grammatical connection. Condition No. 1, simply means, that there has been no material change in his health between the date of application, when the risk was accepted, and the date of the delivery of the policy. 42 L. R. A., p. 276.
2. A condition like No. 1, will be strictly construed against the company. The delivery of the policy made a prima fade case for the plaintiff as all authorities now hold, and the company must allege and show, definitely and certainly, good reasons for enforcing such provisions inserted exclusively for its benefit. Forfeitures after the death of insured are peculiarly odious.
3. Even admitting that insured was not in sound health when the policy was delivered, yet the pleadings admit that the company made its own investigation and assumed the risk, and charged a higher premium on the basis that he was not a sound risk.
4. It is elementary that an insurance company can not collect and retain the premium, and claim there was no insurance. The defendant will not be permitted to say that the policy was. never binding until it shall pay back or tender back the premium collected., and this must appear in the pleading. This has not been done.
5. The attempted defense is wholly devoid of merit either legal or equitable.
[Note by Reporter. — The supplemental brief of appellee containing list pf authorities cited, is not in the record.]

Opinion:
Opinion of the court by
JUDGE PAYNTER
Affirming.
This appeal brings in review the judgment of the court on a policy for $5,000 on the life of Abram R. Moore for the benefit of the appellee, Annie M. Moore. The policy did not have attached to it a correct copy of the application as signed by the applicant, and, not being so attached, section 679, Ky. St., 1903, declares that it shall not be received as evidence in any controversy between the parties to or interested in the policy, and shall not be considered a part of the policy or of the contract between such parties. Provident Assurance Society v. Beyer (23 R., 2460) 67 S. W., 827; Rice v. Rice's Adm'r (23 R., 635) 63 S. W., 586; Manhattan Ins. Co. v. Myers (109 Ky., 372, 22 R., 875) 59 S. W., 30; Provident Assurance Society v. Puryear's Adm'r (109 Ky., 381, 22 R., 980) 59 S. W., 15; Supreme Commandery v. Hughes (114 Ky., 175, 24 R., 984) 70 S. W., 405. In view of the statutes as interpreted by this court, the application can not be considered in determining the rights of the parties to this controversy.
There is another defense based upon á condition in the terms of the policy itself, .and which is as follows: "No obligation is assumed by this company upon this policy until the first premium has been paid, and the policy duly delivered, nor unless upon 'the date of delivery the insured is alive and in sound health." It is pleaded in the answer that the insured was not in sound health when the policy was delivered, and therefore .it is argued that the policy is void, and never created any obligation upon the company. The policy seems to have been delivered on the 6th of November, 1901, and the insured died in June, 1902. It was not pleaded that there had been any material change in the health of the insured. between the date of the application and the time the policy was delivered. The information obtained by the application and the medical examination necessarily reflates to the family history of the insured, his previous con dition of health, and the condition of his health at the time of the examination. It will be observed that in the condition quoted it is stated the policy is not binding "unless upon the date of delivery the insured is alive and in sound health." This clause does not have reference to any unsoundness of health at the time of or previous to the application and medical examination. Although insured had not been in sound health at that time, and there had been no material change since then and the delivery of the policy, the clause would not render it void. When it is-not shown, as in this case, that the unsoundness of health did not occur between the application and medicinal examination and the delivery'of the policy, the company must rely on the statements in the application to avoid a recovery on the policy, not upon the clause in question. As to what is the meaning of the words "sound health," it is unnecessary here to define or to state what unsoundness of health would prevent recovery, nor as to what delay would estop the insurance company from pleading the clause of the policy referred to as a defense to an action on the policy.
There is another reason why the appellant did not show its right to.prevent a recovery upon the policy. The annual premium on the policy was $295.15. If its theory be correct that the insured was not in sound health, and the policy was pot obligatory upon it, then before it could prevent a recovery on the policy it should have tendered back the premium it received. If the policy created no obligation on it, then the company assumed no risk for which it was entitled to be p.aid the $295.15, or any part of it, nor is it entitled to withhold it. It has not earned any part of it. Suppose the company had brought an action to cancel the policy for the reason that the insured was not in sound health when it was delivered. Most certainly would it have been necessary for it to tender back tbe money it bad received to maintain tbe action. Tbe mere fact that tbe insured bad accepted tbe policy when not in sound bealtb, and for that reason it was not obligatory, upon tbe company, would not impose a penalty of $295.15 for tbe benefit of tbe company. When a party seeks to cancel a contract upon tbe ground of fraud or otherwise, be must first offer to restore wbat be received in consideration of tbe contract. If A. practices fraud upon B. in tbe exchange of property, and B. seeks to recover tbe property which be let A. have, be is not entitled to maintain an action, unless be tenders back wbat be received in tbe trade. This rule is applicable to tbe case at bar.
Tbe judgment is affirmed.
Petition for re-bearing by appellant overruled.