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Republic National Life Insurance Company, a Corp. v. Merkley

Supreme Court of Arizona

March 30, 1942

REPUBLIC NATIONAL LIFE INSURANCE COMPANY, a Corporation, Appellant,
v.
LORIN MERKLEY, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. Dudley W. Windes, Judge. Judgment affirmed.

Messrs. Perry, Silverthorne & Johnson, for Appellant.

Mr. Riney B. Salmon, and Mr. J. A. Riggins, Jr.,

OPINION

[59 Ariz. 126] LOCKWOOD, C.J.

Lorin Merkley, plaintiff, brought suit against Republic National Life Insurance Company, a corporation, defendant, to recover on a life insurance policy issued by defendant on the life of Neal B. Merkley, the insured, and payable to plaintiff as his beneficiary. Judgment was rendered in favor of plaintiff, and defendant has appealed.

The question before us is admittedly one of law only, and is whether, on the facts of the case, the policy sued on ever went into effect. These facts are not seriously in dispute and may be stated as follows: On June 21, 1940, the insured, who was a son of plaintiff, made a written application to defendant for a policy of life insurance. This application contained, among other things, the following provision:

"I agree, on behalf of myself and of any person who shall have or claim any interest in any policy issued and based upon this application, as follows:

"1. That the insurance hereby applied for shall not take effect unless the first premium is paid and the policy is delivered to and received by me during my life-time and good health, and that unless otherwise agreed in writing the policy shall then relate back to and take effect as of the date of this application."

Page 314

[59 Ariz. 127] The first quarterly premium was paid by the insured on July 1. On July 2 the policy was executed by defendant, and on July 3 was registered and approved by the department of insurance for the state of Texas, where defendant's principal office is located. On the same day the policy was placed in the mail by defendant, at Dallas, Texas, addressed to E.J. Druke, its general agent in Phoenix. Accompanying the policy was a letter which contained this language:

"The above numbered policy is enclosed herewith for delivery. Please see that policyholder's receipt is properly signed, witnessed, dated, and returned to us at the earliest possible date.

"You are instructed that no policy be delivered until settlement is taken for the initial premium. ..."

There was no other condition imposed by the letter upon the delivery of the policy to the insured, and at this time the latter was in good health. The policy and the letter reached the office of Druke July 5, and on the same date was handed by him to one Richards, a soliciting agent for defendant, who, on the same date delivered it to plaintiff.

On July 4 the insured met his death by drowning. Proof of loss under the policy was made by plaintiff, and payment refused by defendant on the ground that the loss had occurred prior to the delivery of the policy. Thereafter defendant tendered the amount of the premium paid, with ...


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