Aetna Life Ins. Co. v. McCree

• Decision Date: 25 November 1935
• Docket Number: 31935
• Court: Mississippi Supreme Court
• Parties: AETNA LIFE INS. CO. v. MCCREE

164 So. 223

174 Miss. 242

AETNA LIFE INS. CO. v. MCCREE

No. 31935

Supreme Court of Mississippi

November 25, 1935

Division B

1 INSURANCE.

Statute precluding insurer from denying truth of statements contained in application for policy, unless copy of application is delivered to insured with policy, must be liberally construed for insured's benefit (Code 1930, section 5174).

2 INSURANCE.

Where employee's application for insurance was not delivered to him with insurance certificate, but was attached to master policy delivered to employer, insurer's evidence offered to contradict statements in application held properly excluded (Code 1930, section 5174).

3 INSURANCE.

In action to recover disability benefits provided for in insurance certificate issued to employee covered by master policy obtained by employer, evidence held to sustain findings against insurer.

4. EXECUTORS AND ADMINISTRATORS.

Where recovery under insurance certificate was sought only for disability benefits, right thereto vested in insured on his becoming disabled, and, where no other beneficiary was named at insured's death, his administrator was entitled to recover sum due under policy.

HON. A B. AMIS, SR., Chancellor.

APPEAL from the chancery court of Clarke county HON. A. B. AMIS, SR., Chancellor.

Action by Reverend J. McCree, administrator of the estate of Thomas McCree, deceased, against the AEtna Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Affirmed.

Jacobson & Snow, of Meridian, for appellant.

The provisions of the master policy and those of the independent certificate of insurance should be construed together.

Murray v. Metropolitan Life Ins. Co., 110 So. 660.

A certificate delivered by employer to employee was no part of group insurance contract but contract consisted of policy issued to employer and application therefor.

Thull v. Equitable Life Assurance Society, 178 N.E. 850; Austin v. Metropolitan Life Ins. Co., 142 So. 337; Wann v. Metropolitan Life Ins. Co., 41 S.W.2d 51; Provident Life & Accident Ins. Co. v. Nicholson, 160 S. E. 6; Severs v. Metropolitan Life Ins. Co., 230 N.Y.S. 366.

The statute, section 5174, Code of 1930, refers to policies of insurance contracted between the insured and the insurer and where the policy and/or certificate of insurance is delivered to the insured. It has no application to contracts of insurance between an employer and an insurance company with benefits flowing to an employee, where the policy contract between the employer and the insurance company is to be and is held by the employer, but, if the court should not agree with us in this, then, the employer, as in this case, holds the policy for the employee, and as his representative, and when the application is attached to the policy in the hands of the employer, the holding is tantamount to the employee himself holding the policy with the application attached thereto.

Any way this situation is viewed the moment the contract comes into the hands of the insured, an exact copy of the application attached to the policy comes along into the hands of the insured. Without this policy of insurance, with the application attached thereto, no recovery could be had because without the policy no right against appellant existed.

McGee v. Equitable Life Assurance Society, 85 A.L.R. 1457.

McCree had notice his employer had taken out a policy of insurance on his life and that the policy was in the employer's hands, the insurance subject to the terms and conditions of that policy. The statute was satisfied.

A warranty must be literally true whether material or not.

Springfield Fire & Marine Ins. Co. v. Nix, 138 So. 598, 162. Miss. 669; Citizens National Life Ins. Co. v. Swords, 68 So. 920; Williams v. New York Life Ins. Co., 96 So. 97; Sovereign Camp, W. O. W., v. Sloan, 101 So. 195.

The appellant offered to prove by the witness, J. M. McCree, by the witness Dr. T. J. Barnes, by the witness, K. D. Turner, by the deposition of J. H. Whorley and by the signed statement of Thomas McCree that McCree had been sick and had been attended professionally for illness by a physician in the year 1929, one year prior to the application.

It was necessary, for the appellee to recover in this case, if recovery should be had in any event, to prove Thomas McCree became totally disabled while working for Ginsburg & Kaplan.

A. G. S. Railway v. Shannon, 68 So. 165; 22 C. J. 451, par. 543.

McCree ceased to work for Ginsburg & Kaplan on March 1, 1931. He went to Quitman on or about. April 5, 1931, and was then ill. The intervening time was unaccounted for by the appellee.

The trial court held the surrender of the policy and the relinquishment by McCree of his rights was an attempt at rescission. In this the court erred. McCree had made a claim against appellant, but appellant denied the claim.

This suit could not be maintained by Thomas McCree's representatives. The policy does not contemplate that the benefits thereof should go to the personal or legal representative of the deceased, or to his estate, but, under the paragraph by which this claim is sought to be established, "Benefit In Event Of Permanent Total Disability Before Age 60," it is said the company "will pay the sum insured hereunder at the time such disability commenced to the insured, if living; otherwise to the beneficiary." The proof showed the beneficiary under the policy was living at the time this suit was tried and that MeCree was dead. McCree's personal representative was not the proper party to bring the suit, but, if anyone was entitled to, recover, it was the beneficiary.

The court states, in its opinion, that a certificate of insurance in the amount of one thousand dollars was issued and delivered to Thomas McCree. That finding of fact is not supported by the proof, but the chancellor simply held the notice, which was sent to Thomas McCree, to be a contract of insurance. This holding was erroneous. The certificate sent Thomas McCree was simply a certificate to the effect that an insurance policy had been issued covering Thomas McCree's life and the policy delivered to Ginsburg & Kaplan. The certificate was not a contract of insurance and it has been so held in the following cases:

Thull v. Equitable Life Assurance Society, 178. N.E. 850; Austin v. Metropolitan Life Ins. Co., 142 So. 348; Wann v. Metropolitan Life Ins. Co., 41 S.W.2d 50; McGee v. Equitable Life Assurance Society, 85, A.L.R. 1457; Severs v. Metropolitan Life Ins. Co., 230 N.Y.S. 366.

H. F. Case, of Quitman, for appellee.

The appellant seeks by this appeal to, have this court nullify section 5174 of the Code of 1930 of Mississippi or to engraft thereon some unwarranted exception or exemption to, it and to reverse the prior decisions of this court with reference thereto. We submit that to reverse the chancellor in this case would mean that, nothing more or less.

This section of the code creates a rule of substantive law in fixing the rights of the parties under a policy which has been delivered to the insured without a copy of the application therefor attached thereto.

Sovereign Camp, W. O. W., v. Farmer, 77 So. 655, 116 Miss. 626.

The court in that case held that the insurer could not deny any of the statements made in the application for the insurance.

National Life & Accident Ins. Co. v. Prather, 153 So. 881.

Appellant's argument based upon the foreign decisions cited by him is wholly inapplicable for the perfectly obvious reason that the Mississippi statute, section 5174, nor any similar state statute was involved in those cases.

We made the contention that the certificate or the instrument delivered to the insured evidencing the fact that his health and life was insured was such contract as was within the provisions of section 5174 of the Mississippi Code of 1930. The court sustained us in that contention, which we submit in all earnestness was eminently correct.

Appellant tries to put the learned chancellor trying this case in error for enforcing the Mississippi statute, section 5174. And insists that it had a right to go in the face of, and rough shod over, said law and undertake to establish the falsity of the statements of Thomas McCree in his application for insurance. The learned chancellor's ruling in this matter is eminently correct as we submit and clear and logical. There was no necessity for any exception to be entered to it and appellant had preserved and saved the point to it for review in this court.

Griffith's Chancery Practice, sec. 580.

It is not necessary to cite any authority that the law is that the finding of a chancellor on the disputed question of facts is equivalent to a jury verdict and will not be disturbed unless manifestly erroneous.

The chancellor having heard and considered all of the proof and being fully advised held that Thomas McCree, the insured, had been overreached, and in delivering up his certificate of insurance to appellant's agents at a time when he was sick and confined to his home with a fatal malady, from which he shortly thereafter died. That he acted in ignorance of his legal rights. That his action in surrendering the policy was induced by the false representations of appellant's agents as to his rights and therefore a court of equity would not uphold the contention of the appellant that the contract of insurance had been thereby rescinded.

9 C. J 1169, par. 22; Powell v. Plant, 23 So. 399; Caulk v. Bert, 75 So. 369, 114 Miss. 487; Nabours v. Cocke, 24 Miss. 44; Lyon v. Sanders, 23 Miss. 530; Allen v. Luckett, 48 So. 186, 94 Miss. 868; 21 C. J. 93, par. 69; Madison Trust Co. v. Helleckson, 96 A.L.R. 1001; United Commercial Travelers v. McAdams, 125 F. 358; InterSouthern Life Ins. Co. v....