Winger v. Gem State Mutual of Utah , 22 Utah 2d 132 ( 1969 )

TUCKETT, Justice.

The plaintiff brought this action in the court below seeking to recover as a beneficiary under what he claims was a contract of insurance entered into between Grant A. Winger and the defendant insurance company. From an adverse judgment in the court below the plaintiff has appealed to this court.

On October 25, 1966, one Rex England, an agent for the defendant insurance company, obtained an application from Grant A. Winger for a policy of life insurance in the sum of $5,000, which policy also provided for double indemnity in the event of accidental death. At the time of the application Winger paid to England the sum of $25.60 to be applied upon the first year’s premium. At the time England received Winger’s application for insurance he gave to Winger an instrument entitled “Conditional Receipt.” The face of the receipt acknowledged receipt of the money amounting to two months’ premium and also included language “subject to conditions on reverse side.” The conditions on the reverse side of the receipt form provide in part as follows:

The effective date of the policy will be the later of: date of application, or date of medical examination, if required, provided that'the 1. Proposed insured is determined by the Company at its Business Office in accordance with its rules and practices, to be insurable on such daté for the policy exactly as applied-for; 2. Full first premium is paid in cash on date of application; 3. Policy is issued exactly as applied for within thirty days from this date; * * *. .

No medical examination was required in the case of Winger. The application was forwarded to the home office of the defendant at Pocatello, Idaho, and on November 4, 1966, the defendant after an investigation determined that Grant A. Winger was not insurable on grounds other than medical. The defendant sent a com-, munication to its agent Rex England with instruction to notify the applicant Winger that his application for insurance had been declined by the defendant, and also to refund the premium collected. The communication was received by England on November 7, and he thereafter attempted to contact Winger to notify him of the action of the defendant and to return the premium collected. On November 9, 1966, Winger received fatal injuries in a fall from a scaffold from which he died on January 21, 1967. From the time of the accident until his death Winger remained-unconscious and England was unable to communicate with him or to refund the money collected.

In the court below the plaintiff at-‘ tempted to show that the defendant’s agent, Rex England, had express or ostensible authority to bind the defendant in a contract of insurance at the time the application was made by Winger. On conflicting evidence in the court below the court found that England did not have authority to bind the defendant -company finally in a contract of insurance.¹ The question of the agent’s authority being a mixed question of law. and fact will not be disturbed by this court it appearing to have been made upon substantial evidence upon which evidence the court determined as a matter of law that there was no enforcible contract.

The record before us discloses that the defendant acted within a reasonable time in making its determination that Winger was not insurable under its rules. It also appears that the defendant acted with reasonable dispatch in attempting to communicate to Winger its action declining his application. The defendant had in fact made its determination that Winger was not insurable prior to the accident resulting in the fatal injuries to him.

It is clear from the wording of the receipt that the obligation of the defendant was conditional upon its determination that the applicant was insurable according to its rules and practices. The defendant having made its determination that Winger was not insurable and having elected to decline his application, we are constrained to the view that no contract of insurance existed in favor of the plaintiff.² The plaintiff cites the case of Prince v. Western Empire, Life Insurance Company³ recently decided by this- court, but it- appears to us, that that case is distinguishablé upon the ground that in that case the insurer did not decline coverage prior to the time of the fatal injuries being suffered by the applicant, but that it was seeking further medical information for the purpose of determining the premium to be charged.

The judgment of . the court below is affirmed. Costs to the respondent.

CALLISTER, HENRIOD, and EL-LETT, JJ., concur.

1 Couch On Insurance, 2d, Section 26 :192.

2 . Corning v. Prudential Ins. Co., 273 N. Y. 668, 8 N.E.2d 338; Green v. Equitable Life Assurance Soc., 3 Utah 2d 375, 284 P.2d 695; 44 Yale Law Journal 1223; Leube v. Prudential Ins. Co., 147 Ohio St. 450, 72 N.E.2d 76, 2 A.L.R.2d 936.

3 . 19 Utah 2d 174, 428 P.2d 163.