Equitable Life Assur. Soc. of U.S. v. Hall

• Decision Date: 20 March 1934
• Citation: 253 Ky. 450,69 S.W.2d 977
• Parties: EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES v. HALL.
• Court: Kentucky Court of Appeals

69 S.W.2d 977

253 Ky. 450

EQUITABLE LIFE ASSUR. SOC. OF THE UNITED STATES v. HALL.

Court of Appeals of Kentucky

March 20, 1934

Appeal from Circuit Court, Johnson County.

Action by Jerry Hall against the Equitable Life Assurance Society of the United States. Judgment for plaintiff, and defendant appeals.

Reversed and remanded.

William Marshall Bullitt, Bruce & Bullitt, and E. B. Cochran, all of Louisville, for appellant.

J. L Harrington, of Paintsville, for appellee.

RATLIFF Justice.

On June 1, 1932, the Equitable Life Assurance Society of the United States, hereinafter called the Equitable, issued a group insurance policy to the Consolidation Coal Company hereinafter called the Coal Company, by the terms of which policy it insured all the employees of the employer, Coal Company, who shall have elected, as certified by the employer to the Insurance Company, to participate in the group life insurance offered to all the employees of the classes specified in the insurance plan. The first clause of the policy provided $2,000 to be paid to the beneficiary of the employee in case of death. The second clause provided for the payment of $36.24 per month for a period of 60 months in the event of total and permanent disability of an employee under age 60. Another clause provided for the payment of $12 a week for a period of not more than 13 weeks for temporary disability.

Appellee Jerry Hall, plaintiff below, one of the insured employees of the Coal Company, instituted this suit in the Johnson circuit court alleging in his petition that, while the insurance policy was in effect, on the 30th day of March, 1932, he became totally and permanently disabled by disease of the heart usually termed heart trouble, and general disease of the body, and was totally and permanently prevented from engaging in any work of financial value, and asked that he recover under the total and permanent disability clause of the policy in the sum of $2,174.40. He further alleged that he was over the age of 60 years at the time the Equitable issued to him the policy, but further alleged that his age was known to his employer, the Consolidation Coal Company and, with this knowledge, the defendants issued the policy and accepted the premiums therefor, and therefore they are estopped to complain of his age. The Equitable denied knowledge of appellee's age, and defended on the ground that he was over the age 60 at the time the policy was issued, and therefore not entitled to recover under the total and permanent disability clause. The trial resulted in verdict and judgment for appellee in the sum of $36.24 per month as stated in that clause of the policy, until the total sum of $2,174.40 shall have been paid, reserving, however, the right of the Equitable to have the case redocketed for the purpose of determining whether or not appellee has recovered from his disability, in which event the payments would be suspended. The Equitable appeals.

It is insisted for appellee that the Consolidation Company, the employer, was the agent of the Equitable, and knowledge of the agent would be imputed to the principal. The court instructed the jury that it could not find for plaintiff unless they believed from the evidence that the defendant through its agents knew the plaintiff was over 60 years of age at the time the policy was issued and with that knowledge issued the policy and received the premium thereon. Obviously the court gave this instruction on the theory that the employer, Consolidation Coal Company, was the agent of the Equitable. We cannot concur in that theory.

Kentucky Statutes, § 633, defining who shall be deemed agents, does not apply to employers who obtain group insurance for the benefit of their employees. The state of Arkansas has a statute similar to the Kentucky statute, supra. In construing the Arkansas statute, the Supreme Court of that state held that the statute did not make the employer the insurance company's agent. Connecticut General Life Ins. Co. v. Speer, 185 Ark. 615, 48 S.W.2d 553, 554. The court said: "It is sufficient to say that similar contracts of insurance under the group plan have been construed not to constitute the insured (employer) as agent of the insurer to solicit applications for insurance from its employees," and citing Duval v. Metropolitan Life Ins. Co., 82 N.H. 543, 136 A. 400, 50 A. L. R. 1276; Leach v. Metropolitan Life Ins. Co., 124 Kan. 584, 261 P. 603. See, also, Joiner v. Metropolitan Life Ins. Co., 40 Ga.App. 740, 151 S.E. 540.

In Duval v. Metropolitan Life Ins. Co., 82 N.H. 545, 136 A. 400, 404, 50 A. L. R. 1276, the court, in considering the argument that the employer was the agent of the insurer, said: "The employer holds the master policy, not for, but rather against, the insurer. *** There is nothing sinister in such a situation. Their interests are not adverse, but common. *** The insurance was something the employer and employees were to obtain by their joint efforts. It was not something the employer was engaged in getting as a representative of the insurer. * * There is nothing in the situation or conduct of the parties from which an implied general agency on the part of the employer to make representations or waive rights for the insurer could be found."

In the case of Peyton v. Metropolitan Life Ins. Co., 148 So. 721, the Court of Appeals of Louisiana held that the employer's action in carrying the employee on the pay roll from September, 1926, until April, 1931, after he became 60 years of age, did not waive the age 60 provisions of the group policy, and did not work an estoppel against the insurer on the theory of agency.

If the relation of principal and agent exists between any two of the three parties involved, the insurer, the employer, and employee, it could be more logically said that such agency is between the employer and employee. The employer obtained the insurance for the benefit of its employees. The employer is not...