Court Opinion

ID: 9537831
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:25:23.608704+00
Date Added: 2024-06-11T14:57:03.952629
License: Public Domain

McFADDEN, Justice
(dissenting).
The trial court found that the decedent Walter J. Toevs was aware that in conjunction with his wife’s application for insurance on his life a physical examination was required. Mrs. Toevs testified that she was aware of the requirement that Mr. Toevs take a physical examination and also testified she went with him to the doctor’s office for the examination for the insurance policy, but that the examination was not accomplished. Mrs. Toevs stated that she understood from the agent’s remarks that the examination was required for sickness, but the trial court in its memorandum opinion discounted this understanding by Mrs. Toevs.
The facts reflect that Mrs. Toevs did not even read the instruments being discussed by her husband and Mr. Cox on the evening of April 7, 1964, and she testified she only heard intermittent portions of their conversations, she being engaged in household duties. Yet she signed the application form for the insurance as the applicant. This court has held that a person who signs written instruments must be held to some degree of responsibility as to what is contained in those written instruments. Milner v. Earl Fruit Co. of the Northwest, 40 Idaho 339, 232 P. 581 (1925); Hampton v. Lee, 49 Idaho 16, 285 P. 1023 (1930); West v. Prater, 57 Idaho 583, 67 P.2d 273 (1937).
The trial court found no ambiguity existed in the application form signed by Mrs. Toevs, nor in the conditional premium receipt, but the trial court found an ambiguity in the specimen policy. Frankly, I fail to see where there is an ambiguity in these instruments. See Morgan v. State Farm Life Ins. Co., 240 Or. 113, 400 P.2d 223 (1965). The applicable portions of the conditional premium receipt acknowledged receipt of
“the sum of $168.75, which is tendered as a payment on the first premium * * *. It is understood and agreed that this payment is made and accepted subject to the following conditions:
1. [This portion of the premium receipt applies only where no medical ex*156amination is required, and is inapplicable in this case.]
2. If subsequent to the date of said application the Company shall require any medical examination or test of the Applicant * * * or of the person whose life is to be insured under the policy applied for, if other than the Applicant, then any policy issued pursuant to said application shall take effect as of the date the last requested medical examination or test is completed; * * *. [Emphasis added],
3. * *
4^ * *
The majority opinion is critical of the appellant’s use of the “conditional premium receipt” and holds
“The conditional premium receipt created a temporary contract of insurance subject to a condition, i. e., rejection of Toevs’ application by the insurance company. Since rejection did not occur pri- or to Toevs’ death, the company is liable.”
In support of that position cases are cited which are reflective of only one line of authority, to which I do not adhere. To my mind the better line of authority rejects the so-called “temporary contract of insurance theory.” As illustrative of this other line of authority, see: Machinery Center, Inc. v. Anchor Nat’l Life Ins. Co., 434 F.2d 1 (10th Cir. 1970); Morgan v. State Farm Life Ins. Co., supra; Annot. 2 A.L.R.2d 943, 963; 1 Couch on Insurance (Anderson) § 14:41.
The majority opinion considers the argument that the “temporary contract of insurance theory” may allow one who is not insurable for physical reasons to secure insurance coverage, and disposes of such argument by pointing to the fact the decedent had taken a physical examination about two years before, also an examination on June 25, 1963, and the autopsy reflected him to be in good physical condition. This ignores the realities of the purpose of physical examinations for insurance policies. Mr. Lea, the secretary of the appellant company, explained the purpose of such examinations is to determine whether the company can insure the individual at the rate quoted. Without a current physical examination, there would be no way to determine if the individual could be considered as a standard or substandard risk..
It is my opinion that the decision reached by the majority creates a new contract of insurance between the parties. This court has held that the court by construction cannot create a liability not assumed by the insurer and cannot make a new contract of insurance for the parties. Thomas v. Farm Bureau Mut. Ins. Co. of Idaho, Inc., 82 Idaho 314, 353 P.2d 776 (1960); Coburn v. Fireman’s Fund Ins. Co., 86 Idaho 415, 387 P.2d 598 (1963); Miller v. World Ins. Co., 76 Idaho 355, 283 P.2d 581 (1955).
For the foregoing reasons, it is my conclusion that the judgment of the district court should be reversed.