Franklin v. Northern Life Ins. Co., 27906.
| Decision Date | 12 July 1940 |
| Docket Number | 27906. |
| Citation | 4 Wn.2d 541,104 P.2d 310 |
| Parties | FRANKLIN v. NORTHERN LIFE INS. CO. |
| Court | Washington Supreme Court |
Action by Hugh Franklin against the Northern Life Insurance Company for wrongful cancellation of a group insurance policy. From a judgment dismissing the action, plaintiff appeals.
Reversed and remanded, with direction.
Appeal from Superior Court, King County; Roger J. Meakim, judge.
Ralph E. Franklin and Colvin & Rhodes, both of Seattle, for appellant.
Preston Thorgrimson & Turner, of Seattle, for respondent.
This action was brought to recover for the alleged wrongful cancelation of a group insurance policy. The cause was tried to the court which found that the cancelation was wrongful but that plaintiff sustained no damage thereby. From judgment dismissing the action, plaintiff appealed.
The facts are as follows: In 1925, a voluntary, unincorporated association, composed of certain employees of the Seattle Post Office and designated as the Seattle Postal Benefit Association of the Seattle Post Office, was organized. The purpose of the association, as expressed in the constitution of that organization, was to further the interest of its members by securing for for them life and disability insurance at group rates.
Article III of the constitution of the organization provides that,
In all cases when a member severed his connection with the Seattle Post Office by transfer to another post office or branch of the postal service the secretary-treasurer of the Seattle Postal Benefit Association was required to notify, within five days after the consummation of such transfer, the Northern Life Insurance Company in writing of the change in status of such member. Each member of the association was obligated to pay dues of twenty-five cents annually for the purpose of paying the expenses of the secretary-treasurer and to compensate him for his services.
The association, through its officers, filed an application August 28, 1925, with the Northern Life Insurance Company for a policy of group insurance on the one-year renewable term plan, each policy on the life of each person insured thereunder to be in the amount of $1,000. In the application is a recital that the approximate number of employees--doubtless of the Seattle Post Office--was 680 males and 50 females. Thereafter, individual applications were taken from individual members, including the appellant.
Pursuant to those applications the insurance company issued December 1, 1925, to the Seattle Postal Benefit Association, its policy which is designated as the master policy and is a group life and disability insurance policy insuring the life of each member of the association, whose name appeared on the registry thereto attached, for $1,000, subject to the terms and conditions of the policy. The master policy reads as follows:
'1. Schedule of Insurance.--The amount of insurance as to each Employee insured hereunder shall be according to the following schedule: Each member who is in the employ of the United States Post Office of the City of Seattle on the first day of December, 1925, whose name is shown on the register attached hereto, is insured for One Thousand Dollars. All insurance being payable to the designated Beneficiary. Each new member is eligible for insurance after three months continuous employment by the United States Post Office of the City of Seattle, and if application is made therefor in accordance with Sections 19 & 20 hereof, will be insured for the amount eligible, payable to the designated Beneficiary. (not in any case exceeding, however,--One Thousand--Dollars).
'2. Insurance; When and How Payable.--And the Company hereby promises, upon receipt at its Home Office in the City of Seattle, Washington, of due proof of the death, within the term of one year from the date hereof, or within one year from the date of any renewal hereof, of any such Employee while insured hereunder, to pay at such Home Office to the beneficiary as designated by the Employee the amount for which such Employee is hereby insured in accordance with the provisions hereof, and as set forth in the Register hereinafter described.
for each $1,000 of insurance, and, for the ensuing eleven months, monthly Premiums per $1,000 of insurance for all Employees insured or becoming insured hereunder shall, irrespective of age be at such average rate. If this Policy is renewed in the manner and under the terms herein provided, either the Employer or the Company may, upon any anniversary hereof, require a recomputation of the average Monthly Premium per $1,000 of insurance according to the Schedule of Premiums herein quoted and such recomputed average Monthly Premium per $1,000 of insurance shall, irrespective of age, be charged hereunder for the twelve months of each renewal year thereafter until further recomputation is so made upon any anniversary hereof, upon requirement of either the Company or the Employer.
'4. Premium Payment.--All premiums are payable to the Company by the Employer on or Before the First day of each month, at date due, at the Home Office of the Company, in exchange for an official receipt signed by either the President, a Vice-President or the Secretary of the Company. The payment of any premium shall not maintain the insurance under this Policy in force beyond the date when the next premium becomes payable, except as provided in the next paragraph.
'5. Grace Period.--A grace of thirty-one days shall be granted to the Employer for the payment of every premium after the first, during which period the insurance shall continue in force.
'6. Unpaid Premiums at time of Death.--In the event of the death of any employee insured hereunder, any unpaid premiums for the insurance on such Employee up to the next anniversary of the date when insurance on such Employee took effect, shall be payable to the Company by the Employer.
'7. Renewal Privilege.--At the end of the first term, and at the end of each subsequent premium paying period, the Employer may at his option continue this policy by paying in advance to the Company at its Home Office, the premium for the insuring age attained at the commencement of the policy year by each and all insured calculated according to the amount of insurance to be continued and the table of premium rates contained herein; except that at the end of five years from the date hereof, and at the end of each five-year period thereafter, the Company shall have the right to establish new premium rates for the continuance of the policy. A reduction in rate shall be effected, if experience warrants, at the end of each such period. Any reduction shall be determined by the Company and shall be based upon its classified group mortality experience. No increase in rate shall be effected except as may be determined by the Company upon the same basis.
'No Agent is authorized to waive forfeitures or to make, modify or discharge contracts, or to extend the time for paying a premium.
'8. Register.--A Register shall be kept by the Company at its Home Office and shall show the names of all Employees insured hereunder, and the amount of insurance on each of such Employees. Copy of said Register, as of the date of this Policy, is furnished to the Employer herewith and made part hereof, and copies of entries in said Register subsequent to said date will be furnished by the Company to the Employer and will thereupon become a part hereof.
'Provisions and Benefits
'9. Certificate of Insurance.--The Company will issue to the Employer for delivery to each Employee insured hereunder an individual Certificate showing the insurance protection to which such Employee is entitled, the beneficiary to whom payable, together with a statement that in case of the termination of the employment with the Employer, for any cause whatsoever, such Employee shall be entitled to have issued to him by the Company, without evidence of insurability, and upon application to the Company within thirty-one days after such termination of employment and upon payment of the premium then applicable to the class of risk to which he belongs and to the form and amount of the policy at his attained age (nearest birthday), a policy of life insurance in any of the forms customarily issued by the Company, except Term insurance, in an amount equal to the amount of his protection under this Policy at the time of termination. Upon termination of the active employment of any Employee, his insurance under this Policy automatically and immediately terminates and the Company shall be released from any further liability of any kind on account of such person except as to the issue of an individual policy in accordance with the above provision. Re-employment will be classed as new employment in accordance with paragraph 19 hereof and a new...
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