Case Name: Equitable Life Assurance Society of the United States v. Perkins
Court: Appellate Court of Indiana
Jurisdiction: Indiana
Decision Date: 1907-03-19
Citations: 41 Ind. App. 183
Docket Number: No. 5,822
Parties: Equitable Life Assurance Society of the United States v. Perkins.
Judges: Myers, C. J., Watson, Hadley and Rabb, JJ., concur. Comstock, J., dissents.
Reporter: Indiana Court of Appeals Reports
Volume: 41
Pages: 183–197

Head Matter:
Equitable Life Assurance Society of the United States v. Perkins.
[No. 5,822.
Filed March 19, 1907.
Rehearing denied June 5, 1907.
Transfer denied January 31, 1908.]
1. Insurance. — Election.—Waiver.—Burden of Proof. — Where assured’s right of action depends upon his election to accept, or the company’s waiver of, a provision of his policy, the burden is upon such assured to show such election or waiver, p. 18*5.
2. Same. — Withdraioal of Reserve.^-Notice. — •Waiver.—Question for Jury. — Where assured failed to notify the company of his election to withdraw his accumulated reserve, but the company “lapsed” his policy and denied any liability thereunder, the question whether the company’s acts in “lapsing” such policy and denying liability constituted a waiver of its right to demand assured's election, was properly submitted to the jury. p. 185.
3. Trial. — Instructions.—Insurance.—Policy.—Place of Execution. —An instruction, in an action upon an insurance policy that if the assured made an application for a policy of insurance, and paid the premium upon the policy to be issued, whose terms had been agreed upon; that such application had been forwarded to New York for acceptance at the home office of the company, and that such application was accepted, and the policy issued and returned to its Kentucky agent for unconditional delivery to assured in Kentucky, the policy would be governed by the New York law, is correct, p. 186.
4. Contracts. — Offer.—Acceptance.—The acceptance, by word, writing, or conduct, of an explicit offer, creates a contract, p. 186.
5. Same. — Offer.—Accept anee try Letter. — Lex Contractus. — Where an explicit offer is made to a' person in another state, and such offer is accepted unconditionally by a letter mailed in due course, the mailing of such letter closes the contract; and such contract is governed by the law of the state in which the letter is mailed, p. 1S7.
6. Trial. — Question for Jury. — Insurance.—Notice of Forfeiture. — • Where assured testified -that he received from the company no notice of the forfeiture of his policy, and two agents of the company produced separate copies of such notice, which were materially different, the question whether a notice of forfeiture was mailed to assured is for the jury. p. 189. •
7. Insurance. — Forfeitures.—Notice.—Where a statute provides that a forfeiture of an insurance policy can be enforced only after notice is sent to the assured, the giving of such notice is a condition precedent to the company’s right to forfeit, p. 1S9,
8. Same. — Recovery of, by Bankrupt. — Where a bankrupt, thinking, and being legally advised, that his insurance policy was wholly worthless, failed to include same in his schedule in bankruptcy, and no trustee in bankruptcy was ever appointed, such bankrupt being afterwards discharged, he has the legal right to maintain an action on such policy. Comstock, J., dissenting, p. 189.
Prom Superior Court of Vanderburgh County; John TI. Foster, Judge.
Action by Charles G. Perkins against the Equitable Life Assurance Society of the United States. Prom a judgment for plaintiff, defendant appeals.
Affirmed.
James T. Walker, C. A. DeBruler, John D. Welman and G. B. DeBruler, for appellant.
George E. Denton, Woodfin D. Robinson and William E. Stilwell, for appellee.

Opinion:
Roby, P. J.
Action by appellee to recover the alleged surrender value of a life insurance policy issued to him by appellant on March 21, 1882. There was a trial by jury, a verdict for appellee, with answers to interrogatories. Appellant's motions for judgment on the answers to interrogatories, notwithstanding the general verdict, and for a new trial, were each overruled, and judgment rendered on the verdict for $4,419.14.
The errors assigned and discussed are that the court erred in overruling each of said motions. The evidence shows, without conflict, that appellant, in 1882, issued the policy sued on, by which it insured appellee's life in the sum of $5,000, and further provided that at the end of fifteen years, if living, he should be entitled to any one of five options, one of which was to take the surrender value of the policy in cash. Appellee paid his.annual premiums of $260.55 each, regularly for twelve years, at the end of which time he became unable to make any further payments, and the policy, on May 14,1894, was marked by appellant upon its books as "lapsed." The policy would have matured on March 18, 1897. On July 9, 1897, appellee wrote to appellant stating that he had paid premiums for twelve years, after which he was compelled to cease paying, and that he was of the opinion that he was entitled to a share of the reserve. Appellant answered, declining to recognize his claim, upon the stated ground that the policy had no surrender value until the end of the fifteen years, at which time it had lapsed for non-payment of premiums.
There is a provision in the contract by which it devolved upon appellee to give notice in writing of his election to withdraw his share of the accumulated reserve in cash, in the absence of which notice said sum would be applied to the purchase of an annuity. No notice of an election to withdraw'said sum in cash was given, and it is argued that in the absence thereof no recovery can in any event be had. The burden was upon appellee to show an election or a waiver of the condition. Wells v. Vermont Life Ins. Co. (1902), 28 Ind. App. 620.
The court submitted to the jury the question of whether such condition had been waived. The appellant has no occasion to complain of such action. It denied liability upon the stated specific ground that the policy had been forfeited. It marked 'the same upon its books as "lapsed," and whether such acts were, as matter of law, sufficient to waive the objection that written notice of election had not been given need not be decided, inasmuch as they were indicative of an intention to waive such provision, and therefore supportive of the conclusion reached by the jury.
Appellee, who lived in Kentucky, made his written application for insurance on March 13, 1882. The policy was dated March 21, and the date fixed for the payment of premium and the completion and maturity of the policy was March 18. The application was made at Henderson, and delivered to an agent of appellant in the state of Kentucky. The application was forwarded to New York. The policy in suit was issued in New York and transmitted to appellee in Kentucky. There is evidence to the effect that it was mailed from New York to appellant's agents in Kentucky, and by them delivered to appellee. Appellee stated that he received the policy by mail at Henderson, either directly from the company at New York or from its agents at Louisville. There was evidence tending to show, and the general verdict of the jury finds the fact to be, that appellee paid the first premium on said policy at the time of making his application. Appellee asserts under these facts that the contract between the parties was consummated within the state of New York, and that the law of that state thereby became a part of said contract. Appellant, on the contrary, asserts that the contract Avas a Kentucky contract, and therefore governed by the laws of Kentucky. The court upon this subject instructed the jury as follows: "If you find that the plaintiff paid the first premium on the policy of insurance sued on at the time the application was made, and that the terms of the policy that was afterwards issued were then agreed upon, and that the application Avas accepted by the company at its head office, in the state of New York, and the policy issued and duly mailed there to the defendant's agent or agents in the state of Kentucky, for unconditional delivery to the plaintiff, and that it was so delivered, then the contract Avas complete when the policy was mailed in the state of NeAV York, and is governed by the laws of that state. ' '
The legal proposition as thus stated is sustained by authority. The offer made by appellee in his application needed only to be accepted in order that a contract between the parties be created. When a pro posal, explicit in terms, is assented to by the party to whom it is made, the meeting of minds necessary to the formation of a contract takes place. Of course a mere mental determination to accept is not sufficient, but the assent must be an expressed one. Such expression may be by word of mouth, by writing, or by acts which show it. Fairbanks v. Meyers (1884), 98 Ind. 92; Street v. Chapman (1867), 29 Ind. 142, 152.
When- the parties are separated, the rule is that the law of the place where the last act necessary to full and complete formation of the contract is done is the law of the contract, and that, too, although knowledge of such acceptance • does not immediately reach the proposer, and therefore the deposit in the post-office of a letter of acceptance, properly addressed and stamped, has often been held to close the contract. Tayloe v. Merchants Fire Ins. Co. (1850), 9 How. (U. S.) 390, 13 L. Ed. 187; Pittsburgh, etc., R. Co. v. Racer (1894), 10 Ind. App. 503, 506; Cromwell v. Yandes (1878), 61 Ind. 495; New Albany, etc., R. Co. v. McCormick (1858), 10 Ind. 499, 501, 71 Am. Dec. 337; Otis v. Payne (1888), 86 Tenn. 663, 666, 8 S. W. 848; Abbott v. Shepard (1868), 48 N. H. 14; note to Ford v. Buckeye State Ins. Co. (1869), 99 Am. Dec. 663, 668. There was a conflict of evidence as to the time and place where appellee paid his first premium. The jury found that -such premium was paid when the application was signed. The policy, when issued, contained a stipulation that premiums thereon were payable at the office of the company in New York, and appellant agreed to pay the sum insured at said office. The policy also contained a receipt acknowledging the payment of the first premium. Home Ins. Co. v. Gilman (1887), 112 Ind. 7, 12.
The circumstances connected with the transaction, in connection with the testimony of appellee, fully justified this finding. This being true, the last and only act necessary to a completion of the contract was the acceptance by appellant of the proposition contained in appellee's application. Had the policy issued been mailed at New York directly to appellee, the' application of the foregoing elemental propositions would conclude the matter. Appellee stated that he received the policy by mail, either from appellant at New York or its agents at Louisville. There was evidence introduced, and not contradicted, to the effect that the policy was mailed at New York to said agents in Kentucky, and by them transmitted to appellee. Taking this fact as uncontroverted, the question for determination is whether the deposit of the policy in the mails, addressed to the agents to. be by them delivered to the assured, evidenced an acceptance of appellee's proposition. In Kentucky Mut. Ins. Co. v. Jenks (1854), 5 Ind. 96, the Supreme Court had before it the identical question, and after careful consideration of the cases and a review of the authorities, held that the contract was complete when the policy was issued and thus mailed. This case is conclusive. Its authority controls and its reason accords with the current of decision. Kilborn v. Prudential Ins. Co. (1906), 99 Minn. 176, 108 N. W. 861; New York Life Ins. Co. v. Babcock (1898), 104 Ga. 67, 30 S. E. 273, 42 L. R. A. 88, 69 Am. St. 134; Newark Mach. Co. v. Kenton Ins. Co. (1893), 50 Ohio St. 549, 35 N. E. 1060, 22 L. R. A. 768; Harrigan v. Home Life Ins. Co. (1900), 128 Cal. 531, 547, 58 Pac. 180, 61 Pac. 99; Hallock v. Commercial Ins. Co. (1857), 26 N. J. L. 268; Hacheny & Beno v. Leary (1885), 12 Ore. 40, 7 Pac. 329; Davis v. Aetna Mut Fire Ins. Co. (1892), 67 N. H. 218, 34 Atl. 464; McGarry v. Nicklin (1895), 110 Ala. 559, 17 South. 726, 55 Am. St. 40; 1 May, Insurance (4th ed.), §60. Cases in which policies contain stipulations that they should not be binding until delivered to the assured in good health, etc., are not in point, there being no such stipulation in the policy issued to appellee. Cases in which the first premium was not paid at the time that the application was made are not in point upon the facts here presented, and the contract must be construed as having been consummated in New York and therefore subject to the laws of that state.
The statutes of New York forbade the forfeiture of any policy of insurance, other than a term policy, issued by a life insurance company, because of nonpayment of any premium or part thereof, required by said policy to be paid, "unless a written or printed notice, stating the amount of said premium, interest, instalment or portion thereof due on such policy, the place where it should be paid and the person to whom the same is payable, shall be duly addressed and mailed to the person whose life is insured." The jury, in answer to an interrogatory, found that such notice was not given. There was evidence that it was not received. The record contains two copies of a notice which is claimed to have been mailed. Such copies were furnished, one by S. S. McCurdy, assistant registrar, and one by a clerk in the recorder ?s department of the appellant company. These copies are materially different. Such fact may have led the jury to discredit the testimony.
The appellee was unable to pay further instalments of premium, and the absence of such notice did not cause him to make default, but forfeitures are not favored, and, where the insurer is obligated to give notice of nonpayment of a premium, it cannot claim a forfeiture without showing that it has given, in the proper way and at the proper time, the notice required. Goodwin v. Providence Sav., etc., Assn. (1896), 97 Iowa 226, 66 N. W. 157, 32 L. R. A. 473, 59 Am. St. 411; Kerr, Insurance, §133. It follows that the conclusion reached by the trial court upon this branch of the case cannot now be interfered with.
The evidence shows, without contradiction, that in May, 1901, appellee filed his petition in bankruptcy in the district court, for the district of Indiana, together with schedules as required by the bankrupt act. He did not include among the list of his assets the policy sued upon. It was omitted for the sole reason that he was ad vised by his attorneys that it was without value. No trustee was appointed and the bankrupt was thereafter duly discharged. Appellant's contention seems to be that appellee's innocent failure to list the policy as an asset in the bankruptcy proceeding entitles it to retain the amount for which it is otherwise liable. The contention cannot be allowed. No trustee was ever appointed, and until the appointment of a trustee the legal title to his property remains in the bankrupt. Rand v. Iowa Cent. R. Co. (1906), 186 N. Y. 58, 78 N. E. 574; Conner v. Long (1881), 104 U. S. 228, 26 L. Ed. 723; International Bank v. Sherman (1879), 101 U. S. 403, 25 L. Ed. 866; Fuller v. New York Fire Ins. Co. (1903), 184 Mass. 12, 67 N. E. 879; Leathem & Smith Lumber Co. v. Nalty (1902), 109 La. 325, 336, 33 South. 354; Loveland, Bankruptcy (3d ed.), §149. Had a trustee been appointed, or should one hereafter be appointed, his title would relate to the date of the adjudication, but none having been appointed, it has not left appellee, and he is therefore the only person at the present time who could maintain the action. There are a number of other questions discussed, but they are riot of controlling importance.
Judgment affirmed.
Myers, C. J., Watson, Hadley and Rabb, JJ., concur. Comstock, J., dissents.