Court Opinion

ID: 9630071
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:59:13.180611+00
Date Added: 2024-06-11T09:32:44.240280
License: Public Domain

Mr. Justice Kelleher,
whom Mr. Justice Joslin joins, dissenting. I would affirm the findings made by the trial justice. The majority rests its reversal upon the term “completion date” while overlooking the truly significant portion of the receipt which provides retroactive coverage of the policy “applied for.” It must be kept in mind that *682the conditional receipt1 given in September 1970 was in exchange for a premium that accompanied an application seeking “a select policy series with a standard premium class.” The policy issued one month later differed from the one “applied for” in that it was a “substandard policy” having a special premium class. Hancock’s conditional receipt specifically provides that no insurance will be effective until its home office determines whether under its rules the proposed insured is acceptable for the plan of insurance “applied for.” Here, Goucher’s diabetic background required Hancock in October 1970 to offer a policy with a rated-up premium. This was a counteroffer which rejected Goucher’s earlier application and nullified the conditional receipt. Dunford v. United of Omaha, 95 Idaho 282, 506 P.2d 1355 (1973); McLean v. Life of Virginia, 11 N.C.App. 87, 180 S.E.2d 431 (1971); U & I Properties, Inc. v. Republic National Life Ins. Co., 10 Wash. App. 640, 519 P.2d 19 (1974). Consequently, the abstention from medical treatment prior to delivery proviso became operative and bars recovery by the widow.2
*683Adler, Pollock & Sheehan, Incorporated, Peter Lawson Kennedy, for plaintiff.
John W. Moakler, John F. Sherlock, Jr., for defendant.
Motion to reargue denied.

As might be expected, the use of “conditional receipt” has generated a great deal of litigation. The results reached varied depending in great part upon the terminology used by the receipt’s draftsmen. See Annot., 2 A.L.R.2d 943 (1948) and its later case services.
Apart from its litigious aspects, the conditional receipt can prove a benefit to both the insurer and the proposed insured. By requiring a down payment prior to th-e insurer’s determination of the applicant’s insurability, the applicant is restrained both monetarily and psychologically from either revoking his offer to purchase or from purchasing the same insurance from another company. The receipt benefits the applicant beoause once a determination has been made to afford him coverage, any intervening change in his condition will not result in a lack of coverage. See Brown v. Equitable Life Ins. Co., 60 Wis.2d 620, 211 N.W.2d 431 (1973).

At the beginning of the conditional receipt is found the following:
“Notice: Applicability of this Conditional Receipt is Governed by Agreement B of Application.”