New York Life Insurance Company (Defendant) Appellant;
and
Guy J. L. Dubuc (Plaintiff) Respondent
1926: February 11; 1926: March 13.
Present :—Anglin C.J.C. and Idington, Duff, Newcombe and Rinfret JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ALBERTA
Insurance—Life and accident—Medical treatment since examination— Accident after issue and before delivery of policy—Premium—Payment by note—Delivery of policy.
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Provisions in the application form for a policy of life and accident insurance stipulated that "the insurance thereby applied for shall not take effect unless and until the policy is delivered to and received by the applicant" and that the insurance applied for should take effect "only if the applicant has not consulted or been treated by any physician since his medical examination." The policy, however, stated that "this policy takes effect as of date policy is written (twenty-sixth day of June, 1924)." The accident to the plaintiff and his consequent medical attendance took place on the 4th of July and the policy was handed to his father for the insured about 12th July, having been in possession of the local agent for some time before the insured was injured.
Held that the policy must be considered as in force at the time of the accident. The provision that the applicant shall not have consulted or been treated by a physician must be limited to the period between the medical examination pertaining to the application and the date stipulated by the contract for the coming into force of the policy.
Held, also, that the policy had been effectively delivered to the applicant although the agent who handed it over to the applicant had delivered it notwithstanding the instructions of the company not to deliver the policy unless the agent "first satisfies himself that the applicant has not consulted or been treated by any physician * * *." The company cannot, consistently with its obligations, impose conditions upon the delivery of the policy which were not provided for by the contract; and moreover the company's agent, exercising as such his own judgment upon the questions of fact involved in the instructions, must be deemed to have acted on behalf of the company in delivering the policy.
Held, further, that the premium must be regarded as paid at the time of the accident, inasmuch as on the 30th of June the company's agent had received through discount from the bank, without recourse, the proceeds of a promissory note which was given by the father of the insured in payment of the premium.
Judgment of the Appellate Division ([1925] 3 W.W.R. 386) aff.
APPEAL from a decision of the Appellate Division of the Supreme Court of Alberta, reversing the judgment of the trial court and maintaining the appellant's action.
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The material facte of the case and the questions at issue are fully stated in the above head-note and in the judgment now reported.
Lafleur K.C. for the appellant.
Geoffrion K.C. and F. O. McKenna for the respondent.
The judgment of the court was delivered by
NEWCOMBE J.—The question is whether a policy of life insurance, upon which the plaintiff (respondent) claims for permanent disability, is to be considered as having taken effect or attached at the time of the injury which the insured received and for which he claims.
The plaintiff, who is a young man, at the suggestion of his father, who is a physician, signed an application for the insurance in the usual printed form of the defendant company, dated 13th June, 1924. The application was submitted to Mr. Braniff, the company's agent at Pincher Creek. At the same time the plaintiff's father gave his promissory note, dated 13th June, payable six months after date to the order of Mr. Braniff for $65.58, the amount of the semi-annual premium. The plaintiff underwent his medical examination on 17th June; Mr. Braniff sent the application papers to the Calgary office on 19th June, whence they were forwarded to the head office of the company in New York, where the risk was accepted and the policy executed, dated 26th June, and dispatched on the following day to the Calgary agent, who received it in due course and sent it to the agent at Pincher Creek for delivery. In the meantime, on 30th June, Mr. Braniff had endorsed Dr. Dubuc's note without recourse, discounted it at the Union Bank of Canada at Pincher Creek, and received the proceeds. Subsequently, at maturity, the note was paid by the maker. The plaintiff, on 4th July, met with an accident in which he sustained serious injury to his spine, on account of which he was laid up for a long time, and was still incapacitated at the time of the trial. The policy was delivered by Mr. Braniff to Dr. Dubuc about the middle of July.
By the application it is specified that the policy is "to take effect as of date policy is written," and by one of the subsequent printed paragraphs of the application form
It is mutually agreed as follows: 1. That the insurance hereby applied for
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shall not take effect unless and until the policy is delivered to and received by the applicant and the first premium paid in full during his lifetime, and then only if the applicant has not consulted or been treated by any physician since his medical examination.
When the insured met with the accident, he was travelling with his father in the state of Idaho. The automobile in which they were left the road and went down an embankment. The plaintiff emerged from the wreck badly injured and became unconscious. His father treated him on the spot, had him conveyed to Bonner's Ferry, where he went into hospital in charge of a doctor, whence he was removed on the following day to Calgary, where he was again placed in hospital in charge of Dr. McEachern.
The whole defence arises upon the clause in the application which I have quoted, and the principal point is that inasmuch as the applicant had consulted or been treated by a physician during the time intervening between his medical examination and the delivery of the policy, the insurance did not take effect.
The policy itself contains the following clause:
This policy takes effect as of the twenty-sixth day of June, nineteen hundred and twenty-four, which day is the anniversary of the policy.
I shall have something more to say about the delivery of the policy, but I think it must be taken to have been duly completed when Dr. Dubuc actually received the policy; moreover I think that the premium must be regarded as paid when, on 30th June, the company's agent received from the bank, without recourse, the proceeds of the note which was given in payment of the premium. Therefore, assuming delivery and receipt of the policy, and payment of the premium, the sole question for consideration is as to the interpretation and effect of the remaining stipulation
and then only if the applicant has not consulted or been treated by any physician since his medical examination.
Now it will be perceived that it is necessary, in order that these words should be given an intelligible meaning, to interpret them reasonably and with the necessary implications. The word "then," in the context in which it stands, is to be understood as equivalent to "in that case" or, describing the case,
in the event that the policy has been delivered and the first premium paid;
it would not do to interpret the word as an adverb of time, because not only is that not its natural significance in this
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place, but moreover because the obvious reason of the clause is that failure of the applicant's health, so far as to cause him to consult a physician or to receive medical treatment, would naturally affect the basis of the application, and require reconsideration of the risk, which, unless re-accepted, would not attach at any time. Therefore, adopting the only meaning which I think permissible, the clause, in its application to a state of fact in which the applicant had consulted or been treated by a physician after his medical examination, would read as follows:
It is mutually agreed as follows: that * * * the insurance hereby applied for shall take effect only if the applicant has not consulted or been treated by any physician since his medical examination.
When this clause is considered in relation to the provision that the policy shall take effect as of its date, it acquires a definite and reasonable meaning. The clause qualifies or creates an exception from the special stipulation that the policy is to take effect as of its date, and the words
has not consulted or been treated by any physician since
have relation only to a time antecedent to that date; the insurance applied for, which, if it ever become effective, is to take effect as of the date of the policy, is not to take effect if the applicant has consulted or been treated by any physician since his medical examination. This protects the company against such an impairment of health between the date of the medical examination and the date of the policy as was considered apt materially to affect the condition of the applicant as represented by the application and the medical certificate, and the word "since" cannot consistently with the structure and intent of the application and the policy, when read together, have reference to any time subsequent to the date stipulated by the contract for the coming into force of the policy. Previously to this date the applicant had not consulted or been treated by any physician since his medical examination, and therefore the policy attached as of the date particularly mentioned both in the application and in the policy. Moreover any other reading of the clause would involve the extraordinary situation whereby the applicant for a policy to take effect as of its date, whose application had been accepted, whose policy, to take effect of its date, had been written and executed by the company, and whose premium, reckoned from the policy date, had been paid and accepted by the
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company, would remain subject to all the vicissitudes of delay, accident in transmission, negligence in delivery, and other fortuitous occurrences, which might render ineffectual or postpone the very risk which it was the object of the transaction to insure.
Then it is said that the policy was not delivered, and this rests upon the view that Mr. Braniff, the agent who actually handed out the policy to Dr. Dubuc about the middle of July, and who in ordinary course was the agent of the company through whom delivery should be made, had no authority to deliver the policy because of the instructions which accompanied it. This point arises because the plaintiff's counsel, upon examination for discovery of Mr. Blackey, the defendant's Calgary manager, called for production of the letter which accompanied the policy when it was sent to Mr. Braniff for delivery, and defendants counsel informed him in reply that the defendant did not have the letter, but he produced a printed form which the plaintiff's counsel then put in as a part of the discovery with an admission that the letter which accompanied the policy, when it was sent from the Calgary office to the local agent at Pincher Creek, was in that form. In this form of letter the agent is told
you are allowed not to exceed one month from this date to deliver these policies,
and, by a printed notice in the margin, it is said that a policy must not be delivered
if any change whatever has occurred in the health or occupation of the applicant, or if he has consulted or been treated by a physician since the date of his medical examination. In such case the agent must at once return the policy to his branch office with full particulars and await further instructions.
And by a subsequent paragraph in the margin it is said:
A policy must not be delivered to a third party tendering the premium unless the agent (by personal interview with the applicant if possible) first satisfies himself that the applicant has not consulted or been treated by any physician, and that there has not been any change whatever in the health or occupation of the applicant since the date of his medical examination.
Now the company could not, consistently with its obligations, impose conditions upon the delivery of the policy which were not provided for by the contract. I doubt that it was the intention of the company to instruct the agent to withhold delivery, except as authorized by the contract;
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for the reasons which I have mentioned, I think that the insured was entitled to his policy when he received it, and therefore that the agent did not misinterpret his instructions; he still remains the company's agent; he was to exercise his own judgment upon the questions of fact involved in his instructions, and therefore I think that the delivery of the policy made by the agent must be regarded as delivery by the company.
Although, by the application, the policy was not to take effect unless and until delivered, there is nothing to indicate an intention that, when delivered, it should not operate according to its terms, and therefore as of 26th June.
For these reasons the appeal should be dismissed with costs.
IDINGTON J.—For the reasons assigned by the learned judges in the appellate court below, and in this court by my brother Newcombe J., I agree that this appeal be dismissed with costs.
Appeal dismissed with costs.
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