Lancaster v. Travelers Ins. Co.

Docket Number25513.
Decision Date03 December 1936
Citation189 S.E. 79,54 Ga.App. 718
PartiesLANCASTER v. TRAVELERS INS. CO.
CourtGeorgia Court of Appeals

Syllabus by the Court.

1. The contracting parties in a policy of group insurance are primarily the employer and the insurance company. The employer has the right to continue such a policy, or to refuse to continue, and his refusal to continue such, under an executed agreement made with the insurance company to cancel, will not continue any right in the holders of certificates issued under such group policy to hold the insurance company liable thereon for a loss occurring after the cancellation of such master policy.

2. Where the authority of the agent is, as in this case, limited by the terms of an insurance policy, and such policy is canceled, such agent is without authority to continue such canceled policy in force, unless it is made to appear that such continuation is accepted and agreed to by the officers of the company empowered so to do, or there has been an acceptance by the company of payments of premiums made for such purpose. Such agent is without authority to constitute the employer in the group insurance policy the agent of the company to receive the premium for it.

3. The purpose of group insurance is to furnish protection to the insured, and does not ordinarily make the employer, who pays the premiums, or a part thereof, and holds the master policy the agent of the insurer.

4. The employee knew that the employer was paying a part of the premium. He knew the whole general scheme. His employer was undertaking to benefit him by transacting the insurance business and carrying a part of the cost. The employee's confidence was in the employer and not in an agent of the insurer.

5. The court did not err in directing a verdict for the defendant.

Error from Superior Court, Chattooga County; C. H. Porter, Judge.

Action by De Forest Lancaster against the Travelers Insurance Company. Judgment for defendant, and plaintiff brings error.

Affirmed.

See also, 51 Ga.App. 390, 180 S.E. 641.

John D. & E. S. Taylor, of Summerville, and Wright & Covington, of Rome, for plaintiff in error.

Maddox Matthews & Owens, of Rome, and Finlay & Campbell, of Chattanooga, Tenn., for defendant in error.

MacINTYRE Judge.

Lancaster an employee of the Trion Company, filed suit against Travelers Insurance Company on a certain certificate issued to him under a group insurance policy issued by Travelers Insurance Company to the Trion Company. He alleged that he became permanently and totally disabled on June 9, 1933. Claim was filed and payment refused. The defendant answered that the master or group policy issued to the Trion Mills had been canceled by mutual agreement on April 11, 1933, and that there was no liability on its part. The evidence showed that on April 11, 1928, the company issued a group insurance policy to the Trion Company to be effective for a term of one year from that date, "and same may be renewed from year to year as hereinafter provided." On December 14, 1932, plaintiff was issued a certificate under such group policy, he being at the time an employee of the Trion Company. On April 11, 1933, the defendant company and the Trion Company, the parties to the insurance contract, canceled this policy of insurance and issued a new and different policy. The defendant sent its agent to take up certificates issued under the policy which was being canceled; and where wanted, certificates under the new policy of group insurance were delivered. The plaintiff knew of this and was instructed by the Trion Mills to notify employees to surrender their certificates under the policy which was being canceled. The plaintiff performed this duty but refused to surrender his certificate under the old policy. He continued to pay to the Trion Company the amount which he had been paying under the old policy, which was accepted by the Trion Company, but was never sent or delivered to the insurance company. The plaintiff testified that the agent of the defendant company, who was taking up the certificates under the old policy and delivering the new certificates, told him he was not eligible under the new policy, and "that he would take me around to Mr. Simmons (the representative of the Trion Company) and would authorize Mr. Simmons to take out my premiums and take the old policy right on, and when he began to do that the policy would be payable. * * * I went with him to Mr. Simmons and he gave Mr. Simmons those instructions." The agent and Simmons both denied this. Simmons, however, continued to accept from the plaintiff the monthly premiums he had been accustomed to pay. The master policy provided that "no agent can make, alter, or discharge this policy or extend the time of payment of premiums, nor can this policy be varied or its conditions waived or extended in any respect, except by the written agreement by the company, in compliance with the law of the State in which the policy is issued, signed by the president, one of the vice-presidents or secretaries, whose authority will not be delegated." At the conclusion of the evidence the court directed a verdict for the defendant and the plaintiff excepted.

The contracting parties in group insurance are primarily the employer and the insurance company. "It is a contract between the insurer and the employer. * * * It was not in the power of the beneficiary 'to keep the "group contract" in force or to abrogate it."' Curd v. Travelers' Insurance Company, 51 Ga.App 306, 310, 180 S.E. 249, 252. The obligations or covenants of the insured are not contained in the certificate. Metropolitan Life Insurance Company v. Harrod, 46 Ga.App. 127, 128, 166 S.E. 870. The group or master policy manifestly, and by its express terms, is an agreement between the insurance company and the employer. Johnson v. Metropolitan Life Insurance Company, 52 Ga.App. 759, 763, 184 S.E. 392; Austin v. Metropolitan Life Insurance Co. (La.App.) 142 So. 337. The certificate to the employee is an evidence of his coverage by the master policy. All States Life Co. v. Tillman, 226 Ala. 245, 146 So. 393. The "certificate" does not constitute the entire contract of insurance. In brief, the insurance company agreed for a named consideration to insure for one year a group of employees of the Trion Company, whose identity was to be determined by the possession of one of a large number of "certificates." The "certificate" refers to the policy as the basis of its issuance, and the policy refers to the "certificate." "The policy and the certificate are interlocked like the Siamese twins." Carruth v. Aetna Life Ins. Co., 157 Ga. 608, 616, 122 S.E. 226, 230. See, also, Wann v. Metropolitan Life Ins. Co. (Tex.Com.App.) 41 S.W.2d 50; Provident Life & Accident Co. v. Nicholson, 157 Va. 345, 160 S.E. 5; Aetna Life Ins. Co. v. Padgett, 49 Ga.App. 666, 176 S.E. 702. And when the policy dies or ceases to exist, the certificate is no longer binding on the insurance company. Whether or not a policy of group insurance shall be contained depends on the will of the primary contracting parties thereto. The employer is not obliged against his will to continue a policy of insurance after the contract period. Where premiums on a group policy are paid by an...

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