Aetna Life Insurance Company v. Carroll
| Decision Date | 13 November 1933 |
| Docket Number | 4-3199 |
| Citation | 65 S.W.2d 25,188 Ark. 154 |
| Parties | AETNA LIFE INSURANCE COMPANY v. CARROLL |
| Court | Arkansas Supreme Court |
Appeal from Pulaski Circuit Court, Second Division; Richard M. Mann Judge; reversed.
Judgment reversed and cause dismissed.
Owens & Ehrman and J. M. McFarlane, for appellant.
Robert J. Oliver and Arthur G. Frankel, for appellee.
MCHANEY J.
This is an action by appellee against appellant to recover $ 1,000, penalty and attorney's fees, based on a policy of group life insurance issued by appellant to Terry Food Stores, Inc., covering the employees of the latter. Certificates were issued and delivered to the employees and deductions were made from their monthly wages to pay for same. The policy provided that the employer should pay the monthly premium, which should become due on the first of each month, with 31 days of grace allowed the employer in which to pay. It further provided that: "In the event of termination of employment with the employer, the insurance under this policy shall automatically cease at the end of the policy month in which employment terminates." And it also provided for a conversion privilege under certain conditions upon termination of the employment; that is, the insured might, upon written application therefor and payment of first premium within 31 days after termination of the insurance under the group policy, obtain a policy under the conditions set out.
Appellee's husband, Thomas P. Carroll, was an employee of Terry Food Stores, Inc., on and prior to May 31, 1932, and held a certificate for $ 1,000 under said group policy. Said certificate contained this clause: "Said policy provides for termination of insurance whenever the insured ceases to be in the employ of the employer."
The undisputed proof shows that Thomas P. Carroll worked for Terry Food Stores, Inc., up to and including May 31, 1932, at which time he was discharged as store manager at 23rd and Arch streets, Little Rock, but that he worked as checker thereafter on June 4 and June 11. He died June 18, 1932. Deduction from his salary was made for the May premium, but no deduction was made from his wages for the two days' work in June for premium, and the whole amount due him was paid to his widow after his death. Sometime prior to June 14 1932, Terry Food Stores, Inc., notified appellant's Little Rock office that Carroll's and two others' employment had been terminated, and requested a cancellation as to them. This notice was received June 14, was forwarded to the home office June 15, and received there June 17, and were canceled as of May 31, 1932. In accordance with appellant's custom, on June 1, 1932, it sent Terry Food Stores, Inc., a statement showing the total premium due for the month of June based on employees covered in May. This statement included Carroll and the other two because at that time no notice of cancellation had been given or received, and it was the custom of appellant to render bill on the first of each month for employees covered during the previous month. And it was also the custom for Terry Food Stores, Inc., to pay the full amount of the statement, and appellant would issue a credit memorandum for cancellation and deduct same from the next month's statement. That was their system of bookkeeping. After receipt at the home office of the notice to cancel as to Carroll and the other two appellant issued a credit memo on June 23. Terry Food Stores paid the June 1 statement...
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