Mau v. Union Labor Life Ins. Co.

• Decision Date: 30 June 1954
• Docket Number: No. A--188,A--188
• Citation: 106 A.2d 748,31 N.J. Super. 362
• Parties: MAU v. UNION LABOR LIFE INS. CO. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 362

31 N.J.Super. 362

106 A.2d 748

MAU v.UNION LABOR LIFE INS. CO.

No. A--188.

Superior Court of New Jersey Appellate Division.

Argued June 15, 1954.

Decided June 30, 1954.

Arthur A. Donigian, Hackensack, for appellant.

Lionel P. Kristeller, Newark, for respondent(Kristeller & Zucker, Newark, attorneys).

Before Judges EASTWOOD, FREUND and FRANCIS.

The opinion of the court was delivered by

FRANCIS, J.A.D.

This matter is before the court on appeal from a judgment which arose from a determination that the insurance policy in suit had lapsed for non-payment of premium.By consent of the parties, the action had been submitted to the trial court on the pleadings, pretrial order, interrogatories and answers thereto.

The record discloses that respondentUnion Labor Life Insurance Company issued a policy of life insurance, effective July 1, 1948, to the decedent Albert C. Mau.It is a 12-months' term policy with a death benefit of $1,000, and is self-described on the face thereof as a '12-Months Term Policy, Special Conversion Option--Special Renewal Option, Annual Distribution of Divisible Surplus.'On the reverse side in Schedule A the number is given as WT--18Ctf. No. 57.Mau's wife, appellant here, is named as beneficiary, and with respect to premium the following appears:

'Premium

$ Quarterly

Payable

Averaged.'

There is no other statement in the contract as to the amount of the premium or how it shall be paid.

The face of the policy says:

'The consideration for this insurance is the payment in advance at the Home Office of the Company, of the premium specified in said Schedule A * * *.'

It further provides:

'This policy is participating and is entitled to a share in the surplus or profits of the Company as voted annually by the Board of Directors.Such dividends shall upon the request of the Insured be applied to the reduction of premium payments, otherwise they shall be payable in cash.'

'The policy and the application therefor, copy of which is attached hereto, constitute the entire contract.'

At the time of the issuance of the policy, Mau was in the employ of Rockland Concrete Sales Co., Inc.The employer paid the premiums, the last payment being made on October 2, 1948, for the quarter ending January 2, 1949.No premiums were ever paid thereafter.

Mau terminated his employment with Rockland on January 17, 1949, and he died June 1, 1949, which was within the one-year term of the policy.

The position of the insurer is that the instrument on which the suit is brought is not a policy but simply a certificate indicating that the employer held a group policy on its employees under which Mau was insured.Further, the defense is that when Mau's employment ceased he was obliged to convert the certificate to an individual contract and to pay the premiums thereon as they became due if he wished to continue the coverage.And since the premiums are payable quarterly, the certificate lapsed as of January 2, 1949.

The difficulty with the defense is that there is no proof whatever in the record that the employer had a master group policy and that the contract which was before the trial court was simply a certificate depending for its efficacy upon the terms of a master policy.It was suggested at the oral argument that judicial notice should be taken that the inscription 'WT--18Ctf. No. 57' inserted under the designation 'Number' indicates the existence of an employer's group insurance contract.We are aware of no precedent for any such extension of the doctrine of judicial notice.In any event, 'WT' is said to mean 'wholesale term'(although the record does not say so).How this calls attention to the existence of group insurance we fail to perceive.

An example of the manner in which an employer's master group policy is integrated with an employee's subordinate certificate appears in Venditto v. Spratt's Patent (America), Ltd., 113 N.J.L. 357, 174 A. 697(Sup.Ct.1934).There the former Supreme Court in describing the certificate involved said:

'* * * Venditto, like other employees, had his individual 'certificate' numbered 100, Based on, and expressly referring to, the main policy.This certifies, among other things, that the Prudential Company, in accordance with and Subject to the terms of G 2875, has insured the life of Venditto, 'an employee included in the said group,' for $1,000: * * *.'(113 N.J.L. 358, 359, 174 A. 698).(Emphasis supplied.)

If the policy in question were in fact a part of such a group plan and were in some way integrated with it and dependent for its efficacy as insurance upon it, it would have been a simple matter to provide proof of the fact at the pretrial conference or when the matter was submitted to the trial court for determination.But no such course was taken.

The decision of the trial court says that 'the policy in question came into being as part of the insurance plan existing on July 1, 1948, among the employees of the employer of Albert C. Mau, viz.: Rockland Concrete Sales Co., Inc.; * * *.'The record has been searched in vain for any such evidence and none was pointed out to us at the argument.

The fact is, so far as the proofs show, that the contract is specifically called a policy and that it and the application constitute the entire contract between the parties.

There is no language in the policy which required Mau to convert it into an individual contract upon the cessation of his employment.So far as the policy shows, it is an individual contract.And the only provisions with respect to conversion say:

'At any time while this policy is in force and within 30 days after the termination of insurance under this policy it may, upon written application of the insured and legal surrender of the policy to the company, be converted, without further evidence of insurability, into any other form of policy, issued by the company, except a policy of term insurance, (but not including total and permanent disability benefit), in an amount equal to the amount of insurance under this policy, upon the payment of the company's premium charged for such policy at the date of conversion at the age of the insured on such date.'

And further:

'On the expiration of the original term for which this policy was written, this policy may be renewed for additional successive similar terms by agreement between the insured and the company.'

Moreover, this policy does not conform with the statute dealing with group life policies.R.S. 17:34--32(i), as am.L.1946, c. 16, N.J.S.A., which was applicable in 1948, provides that in connection with employer-employee group...