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Silver v. New York Life Ins. Co.

November 29, 1940


Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Philip L. Sullivan, Judge.

Author: Major

Before MAJOR and KERNER, Circuit Judges, and LINDLEY, District Judge.

MAJOR, Circuit Judge.

This is an appeal from a judgment in favor of the defendant in an action upon a life insurance policy. The issuance of the policy by the defendant, and its possession by plaintiff's husband at the time of his death, was conceded, but it was contended by the defendant that it was in his possession upon a conditional delivery, and that by reason thereof, the insurance was never in force. The trial was to a jury, and prior to the commencement thereof, the court ruled that the defendant had the right to open and close the argument.

Two questions are presented: (1) Was there evidence to sustain the defense that the policy of insurance was conditionally delivered? and (2) Was the defendant entitled to the right to open and close the argument?

The first issue involves a question of fact determined by the jury, and in view of the limited authority of this court to review the evidence under such circumstances, it appears that no good purpose would be served in relating it in detail. We have read it and are satisfied that the verdict of the jury is substantially supported. We will, therefore, attempt to do no more than give a brief summary of the evidence as it relates to the issue in dispute.

The complaint filed by the plaintiff was the usual form on a life insurance policy. It alleged the issuance, the payment of premiums by Louis Silver (husband of plaintiff) as insured, his death on April 24, 1939, and the refusal of the defendant to pay. The answer admitted the material allegations of the complaint, but alleged that the policy was delivered to Silver for inspection only, and that the applicant executed and delivered to the defendant through its soliciting agent, a receipt, which recited that the policy was received by Silver for inspection only; that, therefore, the delivery of the policy was never completed by acceptance and payment of the premium thereon, but was outstanding on the inspection receipt on April 24, 1939, at which time Silver suddenly died.

The transactions between the parties were carried on by one Shellow, a soliciting agent for the defendant. Silver and Shellow, so it appears, were rather intimate friends, both having come to this country from the same community in Russia, and both belonged to an organization, the membership of which was composed of people of the same nationality. The evidence shows without dispute that on March 16, 1939, Silver made written application to the defendant for an ordinary life policy in the face amount of $20,000. No money was paid with the application, and defendant refused to write the insurance because of Silver's financial rating and condition of health.

A counter offer was made by the defendant that it was willing to issue a policy in the amount of $10,000, with a premium rated up eight years. This policy (the one in suit) was placed in the hands of defendant's agent, Shellow, to be delivered to Silver upon his acceptance and payment of premium. As to what happened from then on is a matter of dispute. Defendant relies largely upon the testimony of Shellow, which plaintiff contends is so hopelessly contradictory that it should not be believed.Shellow testified that on April 4, he took the policy over to Silver and endeavored to place it, but that its acceptance was refused. It is upon this date that plaintiff claims the policy was unconditionally delivered.

Plaintiff's theory finds some support in the testimony of relatives that they saw the policy in Silver's safe on numerous times between that date and the date of his death. Also, the circumstance is stressed that on April 5, Silver gave Shellow a check for $45 which, it is claimed, was a payment on the premium. There is no evidence to this effect, however, and Shellow testified that his was merely a loan which he had obtained from Silver and that the loan was repaid within a few days. Shellow testified that the policy was in his possession until April 19, when he had lunch with Silver at the Palmer House, when, still trying to sell the policy, he delivered it to Silver for inspection, and took the latter's receipt.*fn1 There is no question but that this receipt was signed by Silver on the date it bears.It is plaintiff's contention, however, that the words "and accepted from" were subsequently stricken by Shellow and the words "forinspection only" inserted for the purpose of converting an unconditional delivery to one that was conditional.

Shellow also testified that on Sunday evening, April 23, he met Silver at a lodge meeting where the latter told him that he had decided not to take the policy and that he (Shellow) said: "I will be in Monday to see you." Plaintiff, who was present at this meeting, testified that her husband had no conversation with Shellow. The next morning, as Shellow was on his way to see Silver, he leanred of the latter's death.

Each side had a handwriting expert who testified as to their opinion concerning certain features of the policy receipt. n.1 (Footnote Omitted) Plaintiff's expert expressed the opinion that the word "only" was not written by the same pen and at the same time as the word "Shellow" and that the word "only" was written in a different type of ink to that used in writing the other words. Defendant's expert would express no opinion as to whether the word "only" was written at the same time and with the same color of ink because that word had been blotted.

Plaintiff's principal argument revolves around this receipt. If the receipt was what it purports to be, plaintiff concedes it has no cause of action. We think the most that can be said from the standpoint of the plaintiff is that the circumstances created some suspicion concerning it. We are unable to find any justification, however, for holding that the jury was not justified in accepting Shellow's version. When all the circumstances are considered, there is considerable evidence which supports the reasonableness of his testimony. It is a reasonable inference that an experienced insurance agent, as Shellow was, would not make an unconditional delivery of a policy without receivign payment for the premium either in money or by note. While defendant could not dispute the recital in the policy as to the receipt of premium, yet if such premium had been paid, we think it certainly would have been admissible in support of plaintiff's theory. In fact, it would have refuted defendant's theory that the policy was delivered conditonally. The amount of the premium was $579,50 - a rather large amount for a person to pay in the financial circumstances which the evidence shows Silver to have been - and the fact that there was no evidence of payment, creates another strong inference that it was never paid.

There is other testimony which lends support to Shellow's version of the matter. For instance, on April 15, 1939, subsequent to the time plaintiff contends the policy was delivered, Shellow ordered an alternate form of policy. This was testified to by defendant's cashier. An alternate policy would issue only if the original policy had not been accepted. The alternate policy which Shellow requested was for a modified endowment plan which provided for a lesser premium and a correspondingly lesser commission. It is inconsistent with plaintiff's theory that a policy was ...

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