Court Opinion

ID: 9659631
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:51:08.13125+00
Date Added: 2024-06-11T18:14:10.143994
License: Public Domain

TEIGEN, Judge
(dissenting).
I dissent. The majority have adopted the rule set forth in Etheridge v. Woodmen of World Life Ins. Society, 114 Ga.App. 807, 152 S.E.2d 773 (1966). Etheridge, however, does not square with our case on the facts. The binding receipt in Etheridge stated:
“In consideration of the payment made by the applicant and of the statements in *621the application, the society agrees that the benefits applied for shall he in effect from the date of the completion of the application, if the applicant is insurable for the amount and plan applied for as a standard risk under the rules and practices of selection of the Society. If the applicant is not insurable as a standard risk on the date the application is completed, this agreement shall be void from its inception.” [Emphasis added.]
The binding receipt in the instant case provides:
“This insurance under the policy for which application is made shall be effective on the date of this receipt or the date of completion of the medical examination (if required) whichever is the later date if, in the opinion of the authorized Officer of the Company at its Home Office in Grand Forks, North Dakota, the Proposed Insured is insurable and acceptable for insurance. * * *
“If the Company declines to issue a policy or issues a policy other than the policy for which application is made, the Company shall incur no liability hereunder except to return by its check the above payment upon surrender of this receipt.” [Emphasis added.]
There is no question raised and it was fully understood that the insurance applied for required a medical examination. In my opinion -the receipt is not ambiguous, under the policy applied for, and certainly did not encourage deception, as was found by the Nevada Supreme Court in Prudential Insurance Company of America v. Lamme, 83 Nev. 146, 425 P.2d 346 (1967), also cited and relied upon by the majority.
Further, the receipt in this case does not provide, as did the receipt in Albers v. Security Mut. Life Ins. Co., 41 S.D. 270, 170 N.W. 159 (1918), also cited by the majority, that if the applicant was found acceptable the insurance was to be dated back to the date of the receipt and not to the date of the medical examination. In this case it is perfectly clear that the policy, if and when issued, would he dated back to the date of the medical examination. This fact is clearly stated in the receipt. The applicant failed to get the necessary medical examination, although he was fully cognizant of the requirement and, in fact, had been prodded by the defendant’s agent on several occasions to undergo the required medical examination but failed to do so.
I dissent for another reason.
If the insurance became effective on the date of the receipt, as the majority hold, then the policy had lapsed before Damm died. He paid only a quarterly premium (three months). The statutes in this state providing the forms for various types of life insurance policies uniformly provide that the premium shall be payable in advance and that the payment of the premium, or installment, shall not maintain the policy in force beyond the date when the next premium, or installment, is payable, except that a grace period of one month is granted for the payment of every premium after the first premium, during which month the insurance shall remain in force. Sections 26-03-26, 26-03-27, 26-03-29, and 26-03-30, N.D.C.C.
The application in this case calls for a five-year term policy. The standard term policy in North Dakota is provided for by Section 26-03-30, N.D.C.C., and provides, in part, as follows:
“Except as herein provided, the payment of a premium or installment thereof shall not maintain the policy in force beyond the date when the next premium or installment thereof is payable. All premiums are payable in advance at said home office, or to an agent of the company upon delivery of a receipt signed by one or more of the following officers of the company: (insert titles of officers who may sign receipts) and countersigned by said agent.
“A grace of one month subject to an interest charge at the rate of _ *622percent per annum shall be granted for the payment of every premium after the first, during which month the insurance shall continue in force. If the insured shall die during the month of grace, the overdue premium will be deducted from any amount payable hereon in any settlement hereunder.”
In this case five and one-half months passed after the date of the delivery of the receipt for the quarterly premium before Damm died. Therefore, if, as the majority say, the policy became effective on the date of the receipt, the quarterly premium would have kept the policy in force, at the most, for a period of four months and, under its terms, the policy had lapsed and terminated one and one-half months prior to Damm’s death.
In Etheridge the applicant paid the first premium and died within five days after making application. In Lamme the applicant paid a quarterly premium and died within seven weeks after making application. In Albers the first premium was paid by note and the applicant died thirteen days after the application, which was three days after he had taken the required medical examination. Thus death in each of the cases cited by the majority occurred within the period for which the premium had been paid.
As I see it in this case, if the insurance became effective on the date of the binding receipt such insurance had lapsed before Damm died and, if the insurance, under the terms of the receipt, was not to become effective until he had taken the medical examination it never became effective because no physical examination was taken. Thus whatever horn of the dilemma one chooses there was, in my opinion, no insurance in effect at the time of Damm’s death.
STRUTZ, C. J., concurs in the above dissent.