Court Opinion

ID: 8657837
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:20:30.073124+00
Date Added: 2024-06-11T16:56:48.998228
License: Public Domain

WADE, Justice
(dissenting in part and concurring in part).
. I concur with the dismissal as to the Bank but I think the evidence would sustain a finding of liability against the *624insurance company. The trial court having granted a non-suit, if the evidence when considered in its most favorable light to the plaintiff would reasonably support the finding of facts sufficient to sustain a judgment against the defendants or either of them, the case should be reversed.
Mr. Jeppeson represented to the decedent that the Bank had a plan with the insurance company that would take care of the mortgage in case anything happened to him, and that payment for this plán could be added to the mortgage installments and paid to the bank along with the payments cn the mortgage with the first payment to be made on the first of February. This representation was followed by a letter of December 27, 1948, from the bank which stated in part:
“* * * we have worked out with the American National Insurance Company a plan which * * * will guarantee the payment of your mortgage for you in case of your death * * *.
“This protection can be arranged for you entirely upon your approval, leaving you to make the decision whether or not you want to carry it until after you have had an opportunity to examine the contract. I am asking Mr. Reynolds Blackington, local representative of the American National Insurance Company, to call on you in the near future and explain this plan. * * *”
From these representations the deceased would be justified in believing that if he made application for insurance under this plan the mortgage would be paid therefrom, to the extent of the amount of the insurance, in case of his death and that the insurance would be issued as soon as possible after he gave his consent or approval giving him the option to cancel it if he so desired after examining the policy. He was definitely assured that upon his approval the policy would take effect immediately without waiting for the first payment.
On January 5, 1949, pursuant to those representations Blackington the insurance company’s agent called and repeated these representations. He again asserted that the premiums were to be paid along with the regular monthly *625payments on the mortgage to the Bank. The deceased approved the policy for $2,000 and after reading the application deceased signed it and took the physical examination the next day wherein he was pronounced in perfect condition. The deceased, at that time, had complied with every condition that he was requested to meet in order to make the policy effective. He had been assured that upon meeting such requirements the policy would go into effect immediately, but no policy nor conditional receipt required by the application to make the insurance effective had been issued until nineteen days had elapsed when the decedent unexpectedly died. I think the evidence is such that it could reasonably be inferred therefrom that had deceased lived until the first premium payment was made the insurance company would have claimed that the insurance had been effective from the date of the application and would have charged a premium thereon from that date.
If such is the case then the insurance company under the prevailing opinion had it within its power to withhold the issuance of the policy or of the conditional receipt until after the premium had been paid and then choose in accordance with its interest at that time whether or not to claim that the insurance had been in effect from the date of the application to the date that the first payment became due. Thus, it could collect the insurance premium if at the time the first premium became due the insured was in good health but could refuse to pay the policy in case he died in the meantime, if such is the case a grave injustice has been done to the deceased’s family.
Clearly it would be a reasonable inference from the record that both the Bank’s agent and the agent of the insurance company represented that the insurance would become effective upon the approval of the deceased and his passing the physical examination, and that upon his complying with these requirements the insurance company would take the necessary steps to make the insurance policy effective immediately but that 19 days had elapsed before his death *626which would give ample time for the insurance company to make the policy effective had it lived up to its agreement, but that it had failed to live up to its agreement. This is not a case where the agents of the insurance company have made representations beyond their authority to make for there can be no doubt that the ordinary insurance company agent (and this includes the agents of the bank in this case) have authority to represent that an insurance policy will be issued and made effective immediately upon the applicant meeting the company’s requirements. Here the failure seems to be on the part of the insurance company to live up to its agreement and either issue the conditional receipt or issue the insurance policy immediately after the deceased had met all the requirements to be performed by him in order to make the policy effective. Under such circumstances I think we should hold that the policy went into effect regardless of the failure on the part of the insurance company for it should not be allowed to avoid liability contrary to its agreement merely because it failed to comply with that agreement.1

See Gressler v. New York Life Insurance Company, 108 Utah 182, 163 P.2d 324, 164 A.L.R. 1047 and Parker v. California State Life Insurance Company, 85 Utah 595, 40 P.2d 175.