Cason v. Aetna Life Ins. Co., 35120

• Decision Date: 03 December 1954
• Docket Number: No. 35120,2,Nos. 1,35120,s. 1
• Citation: 91 Ga.App. 323,85 S.E.2d 568
• Parties: CASON v. AETNA LIFE INSURANCE COMPANY
• Court: Georgia Court of Appeals

Page 568

85 S.E.2d 568

91 Ga.App. 323

CASON v. AETNA LIFE INSURANCE COMPANY.

No. 35120.

Court of Appeals of Georgia, Division Nos. 1, 2.

Dec. 3, 1954.

Rehearing Denied Dec. 16, 1954.

Syllabus by the Court

1. The employer who obtains a group policy of insurance covering his employee is, for the purpose of doing every act necessary to effectuate the purpose of the policy, the agent of the insurance company issuing the policy.

2. The evidence in this case demanded a finding that the insurance company, through the agency of the deceased's employer had knowledge that he was ineligible for insurance under the certificate issued to him, and, having in these circumstances accepted the premiums necessary to keep the certificate, was estopped to interpose the defense that he was not entitled to protection under the certificate.

This case was tried in the Civil Court of Fulton County by the judge without a jury, and after the introduction of all evidence by both plaintiff and defendant and after argument of counsel for both parties, the court rendered judgment in favor of the defendant, Aetna Life Insurance Company. The plaintiff and defendant had entered into a stipulation which was introduced in evidence, agreeing as to substantially all of the material facts and as to the material documentary evidence.

Under date of December 1, 1932, Aetna Life Insurance Company issued a group policy, No. 5598 to The City of Atlanta, Fire and Police Departments, insuring the lives of members of the Fire and Police Departments of the City of Atlanta, which policy was amended and added to by riders attached from time to time. Under date of April 1, 1949, a certificate No. 6 was issued to Fred B. Cason, an employee of the Fire Department of the City of Atlanta, certifying that he was insured for the sum of $2,500 under and subject to the terms and provisions of the Group Policy No. 5598, and the plaintiff, Caroline H. Cason, was named as the beneficiary in said certificate.

In October, 1951, the City of Atlanta initiated a plan to increase the then existing group insurance on the employees of its Fire and Police Departments and negotiated for a rider to the group policy of insurance to become effective as of January 1, 1952. On November 5, 1951, Fred B. Cason signed a request with the City of Atlanta for additional insurance under the group policy, the request being as follows: 'I hereby request my employer to arrange for the issuance of the insurance to which I am now entitled, or to which I may become entitled, under the terms of the group policy or policies issued to my employer by the Aetna Life Insurance Company, and I authorize my employer to make proper deductions from my earnings as my contributions toward the cost this insurance. Date signed 11-5-51 (s) F. B. Cason (signature of employee).'

Aetna Life Insurance Company thereafter issued an 'Increase Certificate Rider' to Fred B. Cason, holder of Certificate No. 6. The rider contained the following provisions as to the effective date of the increase:

'Group Policy No. 5598

Amount of Increase $1500.

'Insurance increased under:

'Effective Date Jan. 1, 1952, provided the Employee is then regularly performing the duties of his occupation.

'Aetna Life Insurance Company

'(s) M. M. Brainard,

'President.

'This Certificate Rider forms a part of the employee's Certificate and is subject in every respect to all of the terms of the Group Policies, which Policies alone constitute the contract.'

The Group Policy No. 5598 further provided: '(a) Employees who make written application to the employer for insurance hereunder on or before the dates of their eligibility shall be insured as of such dates of eligibility if then regularly performing the duties of their occupations, otherwise on return to such active duty.'

Fred B. Cason last worked as a fireman for the City of Atlanta on April 16, 1951, at which time he was injured and became ill. From April 16, 1951, until the date of his death on April 17, 1952, he was absent on sick leave and never at any time returned to work or active duty.

The request for additional insurance, signed by Fred B. Cason on November 5, 1951 was carried by Capt. C. A. Miller of the Atlanta Fire Department, Captain of Fire Station No. 4, to the home of Mr. Cason and left with him. The card had previously been sent to Fire Station No. 4 by the Comptroller's Office of the City of Atlanta. After Captain Miller left the card at Mr. Cason's home, Mr. Cason signed the card on November 5, 1951. It was then picked up by Captain Miller of Fire Station No. 4 and forwarded to the Comptroller's Office of the City of Atlanta. Mr. Cason on November 5, 1951, was ill in his home and had been ill and away from his work since April 16, 1951. He was never able to return to work prior to his death in April 1952.

After his death, in investigating the claim of the beneficiary under the group policy, Aetna Life Insurance Company learned for the first time that Fred B. Cason had been ill and absent on sick leave since April 16, 1951, and had never at any time returned to active duty since April 16, 1951. Aetna Life Insurance Company paid to Mrs. Caroline H. Cason, beneficiary, $2,500, being the amount of Certificate No. 6 issued under the group policy upon the life of Fred B. Cason. The company contended and now contends that this was the full amount due to Mrs. Cason under the group policy, but the payment was made to Mrs. Cason without prejudice to the right of Mrs. Cason to claim any additional sum to which she might be entitled.

Aetna Life Insurance Company paid the full amount of Certificate No. 6 in the sum of $2,500, but denied that it was liable for any increase under the Increase Certificate Rider, for the reason that Fred B. Cason on January 1, 1952, was not 'then regularly performing the duties of his occupation' and never 'returned to such active duty' at any time prior to his death. The Increase Rider Certificate specifically stated it would be effective January 1, 1952, 'provided the Employee is then regularly performing the duties of his occupation.' The certificate further stated that it was issued 'subject in all respects to all of the terms of the Group Policies.' The Group Policy specifically provided as to the 'Effective Date of Individual Insurance' sub-section(a), as follows:

'(a) Employees who make written application to the employer for insurance hereunder on or before the dates of their eligibility shall be insured as of such dates of eligibility if then regularly performing the duties of their occupations, otherwise on return to such active duty.'

Under the provisions of the Increase Certificate Rider and under the above provisions of the Group Policy, the increase did not become effective on the life of Fred B. Cason, as he was not on January 1, 1952, regularly performing the duties of his occupation and did not at any time thereafter return to such active duty. If at any time subsequent to January 1, 1952, Fred B. Cason had returned to active duty, then the increase in insurance of the Increase Certificate Rider would have become effective. But Fred B. Cason was absent on sick leave on January 1, 1952, and never thereafter returned to work or active duty prior to his death.

The group policy contained the following provisions:

'This policy shall be incontestable, except for nonpayment of premiums, as to insurance in force at the date hereof after one year from the date of issue of this original contract, and as to insurance on any new employee or any increase of insurance after one year from the time such insurance takes effect as herein provided; but written notice of the death of an employee shall be given to the Company at its Home Office within 15 months after cessation of the payment of premiums in respect to such employee; if such notice is not given, the Company shall not be liable for any payment on account of such death.'

Aetna Life Insurance Company contends that it has discharged its full liability to the plaintiff under the Group Policy by making payment of the amount of Certificate No. 6 in the sum of $2,500 to her, and that no increase in insurance ever became effective on the life of Fred B. Cason under the terms of the Increase Certificate Rider and the provisions of the Group Policy.

Smith, Kilpatrick, Cody, Rogers & McClatchey, Atlanta, for plaintiff in error.

Bryan, Carter, Ansley & Smith, W. Colquitt Carter, Atlanta, for defendant in error.

QUILLIAN, Judge.

(After stating the foregoing facts.) In the interest of brevity this opinion will refer to Fred B. Cason as the insured, the City of Atlanta as the city, to the plaintiff in error as the plaintiff or beneficiary according to which term is more convenient in our discussion of the case, and reference will be made to the defendant in error as the company.

It will be observed from the foregoing statement of fact that the policy sued upon was not a single instrument, but consisted of the master or group policy issued by the company to the city, the certificate issued by the company to the insured by its terms insuring his life for $2,500, and the document designated as a rider to the certificate increasing that amount to $4,000.

The rider contained a clause that its effective date would be the date on which it was delivered to the insured, provided he was, on that date, regularly performing the duties of his occupation. There was a clause in the group policy quoted in the statement of facts, that if employees applying for insurance under the group policy before the date of their eligibility to be insured according to its provisions, would be insured from the date of their eligibility if then performing the duties of their occupations.

The insured was not regularly performing the duties of his occupation at the time the rider increasing the amount of the insurance on his life by $1,500 was issued, nor did he at any time thereafter until his death perform...