Metropolitan Life Ins. Co. v. Thompson

• Decision Date: 30 March 1942
• Docket Number: No. 4-6664.,4-6664.
• Parties: METROPOLITAN LIFE INS. CO. v. THOMPSON.
• Court: Arkansas Supreme Court

160 S.W.2d 852

METROPOLITAN LIFE INS. CO. v. THOMPSON.

No. 4-6664.

Supreme Court of Arkansas.

March 30, 1942.

Rehearing Denied April 27, 1942.

Appeal from Circuit Court, Union County, Second Division; Gus W. Jones, Judge.

Action on group policy by Essie Thompson against Metropolitan Life Insurance Company. Judgment for the plaintiff, and the defendant appeals.

Reversed and cause dismissed.

Harry Cole Bates, of New York City, and Streett & Harrell, of Camden, for appellant.

Surrey E. Gilliam, of El Dorado, for appellee.

McHANEY, Justice.

In 1933 appellant issued to Lion Oil Refining Company of Eldorado, hereinafter referred to as Lion Oil, its Group Insurance Plan Contract, by which it agreed to insure eligible employees of Lion Oil who might make application for insurance thereunder, covering death, total and permanent disability, total temporary disability and dismemberment. On March 15, 1937, Grover Thompson, colored, husband of appellee, being an eligible employee of Lion Oil, made application for insurance coverage under the Master policy issued to Lion Oil and a certificate was issued by appellant on June 24, 1937, sent to Lion Oil and by it delivered to Thompson, who became ill on June 26, 1937, and died on July 13, 1938, without having fully recovered from such illness and without doing any work for Lion Oil after June 26, 1937. His illness was caused or aggravated by inhaling gas fumes while at work in cleaning out a gas tank car. Both the Group Policy and the certificate provide that there shall be no liability of appellant for total temporary disability, if such disability results from an "occupational" injury or illness. Whether Thompson's disability was the result of an "occupational" illness is not here determined, but for the purpose of this opinion we assume that it was not. No claim was ever made under the total and permanent disability provisions of the Group Policy and certificate, as they both provided there should be no liability on this account unless the disability for which the claim is made commences after the employee had been continuously insured for a period of one year.

As to death benefits the Group Policy provides:

"The insurance of any employee insured hereunder who shall have ceased to be in the employ of the employer, shall be discontinued as of the date such employee left the employ of the employer.

"Upon receipt by the company of due notice and proof-in writing-of the death of any Employee, while insured hereunder, and upon the surrender of the certificate and all certificate riders-if and-issued hereunder to such Employee, the Company shall pay, subject to the terms hereof, to the Beneficiary of record, the amount of Life Insurance, if any, in force on account of such Employee, at the date of his death, according to the Formula.

"The Company shall, upon cessation of insurance hereunder on any Employee because of termination of employment, be released from any liability on account of such Employee unless and until an individual policy is issued in accordance with the provisions of this Section."

The certificate issued to Grover Thompson contained the following provisions:

"If death occur while the Employee is in the employ of the Employer and while the Group Policy is in force, the amount of Life Insurance, if any, then in force thereunder on said Employee, shall be paid to Essie Thompson, Beneficiary.

"In case of the termination of the employment of the Employee, for any reason whatsoever, all of his said insurance shall immediately cease but the Employee shall be entitled to have issued to him by the Company, without evidence of insurability, and upon application made to the Company within thirty-one days after such termination, and upon the payment of the premium applicable to the class of risk to which he belongs and to the form and amount of the policy at his then-attained age (nearest birthday), a policy of Life Insurance in any one of the forms customarily issued by the Company, except Term Insurance, in an amount not exceeding the amount of his Life Insurance under the Group Policy at the time of such termination."

On April 9, 1938, Lion Oil furnished appellant, on a form provided by it, written notice of the termination of Thompson's employment, together with that of seven other employees and requested cancellation of Thompson's insurance as of February 1, 1938. Appellant complied with said notice and request, cancelled Thompson's insurance as of said date, and refunded to Lion Oil all premiums it had paid on that account between February 1 and April 9, 1938. Lion Oil paid all premiums to appellant for all its employees, a portion thereof being deducted from their wages, but during the illness of Thompson, it paid all his premiums up to April 9, 1938, and paid him about $25, monthly from August, 1937, to March, 1938, both inclusive, as advances, and charged his part of the premiums and all the advances to his account, on the theory he would recover and return to work. No premiums were paid after April 9, 1938, and no advances were made him and his name was dropped as an employee. No notice was given him that Lion Oil had directed appellant to cancel the policy and none was given that he was no longer an employee except he may have known it from the fact that no further advances were made to him after March, 1938, and from the fact he employed an attorney about this time to sue Lion Oil for damages for personal injuries causing his illness. No premiums were paid appellant after the written notice given it as aforesaid and it refunded the premiums paid between February 1, and April 9, to Lion Oil, as requested by it. Appellant had no dealings with Thompson direct, but all business was handled through Lion Oil.

After Thompson's death, appellee, as beneficiary named in the certificate, made proofs of loss, forwarded same to appellant and demanded the death benefits named in the certificate. Appellant refused to pay and appellee brought this action to recover same. In addition to allegations that Grover Thompson was insured in the sum of $1,500 in said certificate, that he had died and that she was the named beneficiary the complaint alleged a liability of appellant to her husband, under the total temporary disability provision of $10 per week for 13 weeks, or a total of $130; that at the time of his death he was in the employ of Lion Oil; that he complied with all provisions as to notice and making proofs of disability; that the Lion Oil paid all premiums on his contract until his death; that appellant had $130 in its hands due him out of which to pay the premiums; that it was its duty to apply a sufficient sum of...