Title: Law v. Hawaiian Life Insurance Co.
Citation: 459 P.2d 195
Docket Number: 4843
State: Hawaii
Issuer: Hawaii Supreme Court
Date: September 17, 1969

459 P.2d 195 (1969) Mansel E. LAW v. HAWAIIAN LIFE INSURANCE CO., Ltd., a Hawaii corporation and Robert Pannabecker. No. 4843. Supreme Court of Hawaii. September 17, 1969. *196 Andrew S. Hartnett, Honolulu, (Daral G. Conklin, Honolulu, of counsel) for plaintiff-appellee, cross-appellant. C.A. Gregory, Honolulu, (Smith, Wild, Beebe &amp; Cades, Honolulu, of counsel) for defendants-appellants, cross-appellees. Before RICHARDSON, C.J., MARUMOTO, ABE and KOBAYASHI, JJ., and FUKUOKA, Circuit Judge, in place of LEVINSON, J., disqualified. KOBAYASHI, Justice. Plaintiff is the widow of Robert M. Law and the beneficiary named in his application for a $10,000 life insurance. On December 16, 1965, Mr. Law applied to defendant Hawaiian Life Insurance Co., Ltd., (herein called the Insurance Co.) for the policy through Robert Pannabecker, an agent of the Insurance Co. Mr. Law paid defendant the first monthly premium of $49.90. A conditional receipt was issued to him by Mr. Pannabecker. On December 22, 1965, Mr. Law successfully completed his medical examination as required under the application for insurance and the conditional receipt. However, Mr. Law died on February 8, 1966, before any insurance policy was issued and delivered to him. The Insurance Co., after processing Mr. Law's application, determined on January 27, 1966, that his application be classified at a substandard rate. The substandard rate was $53.97 monthly. The Insurance Co., on February 8, 1966, prepared a policy of life insurance upon the life of Mr. Law in the face amount applied for but at the substandard rate. The Insurance Co. failed to communicate its determination of the substandard rating to Mr. Law during his lifetime. The Insurance Co. refused to pay to plaintiff the proceeds of the life insurance. Judgment below was for plaintiff. The issue is simply whether a binding insurance contract existed at the time of applicant's decease. Appellant, the Insurance Co., insists that it had 60 days from the date of the application *197 to accept, with or without modifications, Mr. Law's application. The appellant cites Part 1, paragraph 18[c], of the application as determinative of the issue, to-wit: The appellant insists that applicant's death prior to the expiration of the 60 days precluded any acceptance of the application for insurance by the Insurance Co. The appellee contends that the deceased applicant fully met the conditions required by the appellant, itself, as provided in the conditional receipt and the application for insurance. In the opinion of this court, the deceased applicant, prior to his death, did perform as required by the appellant. The application for insurance states in Part 1, paragraph 18[b]: The relevant and determinative clauses of the conditional receipt provide: In the opinion of this court the pertinent provisions in both the application for insurance and the conditional receipt are clear and not ambiguous. We summarize the status of the parties: 1. On December 16, 1965, Mr. Law offered to purchase from the Insurance Co. a policy on his life for the sum of $10,000 at a monthly premium of $49.90. Mr. Law paid the $49.90. 2. The Insurance Co. accepted Mr. Law's offer, subject however to the condition precedent that Mr. Law successfully complete a medical examination. This condition was fulfilled on December 22, 1965, and the insurance contract became effective on said date. Notwithstanding the fulfillment of such condition, the Insurance Co. argues that the proviso in the conditional receipt nullifies any conclusion that an effective insurance contract was consummated because Mr. Law was not a "risk acceptable in the judgment of the Company under its rules, limits, and standards for the plan and amount applied for at the rate of the premium paid with the application." (Emphasis added) *198 We cannot agree. Even if we accepted the Insurance Co.'s contention that the pertinent provisions in the application and conditional receipt are ambiguous, we would still hold that Mr. Law was effectively insured. This application was written by the Insurance Co. to be read by persons Gaunt v. John Hancock Mut. Life Ins. Co., 160 F.2d 599, 601-602 (2d Cir.) cert. denied, 331 U.S. 849, 67 S. Ct. 1736, 91 L. Ed. 1858 (1947). The insurer must be held responsible for achieving certainty and clarity in the field of insurance. The judgment is affirmed.