Court Opinion

ID: 9644047
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:47:29.132313+00
Date Added: 2024-06-11T18:11:08.010742
License: Public Domain

CLARK, Circuit Judge
(concurring).
I agree that the course of negotiations required and controlled by the insurance company was “unpardonable,” and am willing to concur in the decision for that reason. But I do not think we can properly or should rest upon the ambiguity of the company’s forms of application and receipt. Had this bargaining occurred between parties with equal knowledge of the business and on equal terms, there could be little difficulty in supporting the condition precedent that the “insurance,” i. e., the insurance contract or policy, could not “be in force,” i. e., take effect, until approved at the home office, and that then it dated back to an earlier time. Moreover, conditions of this general form are unfortunately still too customary for a court to evince too much surprise at them. There have been acute discussions of the legal problems involved; thus, most helpful is the article, Operation of Binding Receipts in Life Insurance, 44 Yale L.J. 1223.1 There receipts given for the payment of the first premium were held best divisible in two categories, one requiring approval as a condition precedent to the contract, in substance as here, and the other requiring that the company be satisfied that on the date of the medical examination the applicant was an insurable risk, and that the application was otherwise “acceptable” under the company’s regulations for the amount and plan of the policy applied for. The first form, it was said, was generally held to prevent the existence of a contract before acceptance, except with a few courts which found the provision too inequitable to support. The second, however, gave no difficulty where its reasonable requirements were afterwards found to have been met. A questionnaire to insurance officials showed an increasing trend towards the second or fairer form — a development warmly supported by the author. There was further the acute observation that use of the former form resulted in continuous litigation in a field of law where certainty was essentially indispensable, since it stimulated judicial intei-pretation to resolve the “ambiguity” against the company, followed by the latter’s renewed attempts to revise and refine the technical words.
Iffence a result placed not squarely upon inequity, but upon interpretation, seems sure to produce continuing uncertainty in the law of insurance contracts. Even though for my part I should feel con*604strained to concede the weight of judicial authority against our view,2 I think the considerations" stated are persuasive to uphold recovery substantially as would occur under the second form of contract stated above. I am somewhat troubled as to the state of local law in view of the stress in Swentusky v. Prudential Ins. Co. of America, 116 Conn. 526, 165 A. 686, upon the absence of unique features to insurance law. But that was. actually in another connection, a fact which I think justifies us in not here abdicating our judicial role for that envisioned by Judge Frank in Richardson v. Commissioner of Internal Revenue, 2 Cir., 126 F.2d 562, 567, 140 A.L.R. 705, of “ventriloquist’s dummy” as to state law.

 Making the distinction between the forms of provision as indicated by my text, I fear I cannot see as much judicial division as my brothers observe; though I do think too far-reaching such statements of annotators with reference to such a conditional receipt: “It is uniformly held that such an instrument is absolutely ineffectual in providing protection to the applicant until tbe application is approved or accepted.” 81 A. L.R. 332, 333; 107 A.L.R. 194, 195. Tbe Now York rule seems pretty well settled by the late cases; Corning v. Prudential Ins. Co., supra, was affirmed 273 N.Y. 668, 8 N.E.2d 338.

 Other references might include Kess-ler, Contracts of Adhesion — Some Thoughts about Freedom of Contract, 43 Col.L.Rev. 629, 631-635; Patterson, The Delivery of a Life Insurance Policy, 33 Harv.L.Rev. 198 ; Havighurst, Life Insurance Binding Receipts, 33 Ill.L.Rev. 180.