Rivers v. State Capital Life Ins. Co.
| Decision Date | 01 February 1957 |
| Docket Number | No. 521,521 |
| Citation | 96 S.E.2d 431,68 A.L.R.2d 205,245 N.C. 461 |
| Court | North Carolina Supreme Court |
| Parties | , 68 A.L.R.2d 205 Lela J. RIVERS v. STATE CAPITAL LIFE INSURANCE COMPANY. |
George R. Uzzell, Salisbury, Allen & Hipp and Arch T. Allen, Raleigh, for defendant, appellant.
Rebert M. Davis and John C. Kesler, Salisbury, for plaintiff, appellee.
Plaintiff's evidence tended to show the following facts: The defendant State Capital Life Insurance Company issued to Linn Mills Company for the benefit of its employees a group insurance policy No. 1300, and this policy, known as the master policy, was in full force and effect during the time alleged in plaintiff's complaint. When this group insurance policy was issued to Linn Mills Company, Charlie C. Rivers was, and had been for many years, an employee of Linn Mills Company. Under the group insurance policy the defendant on 16 August 1953 issued its group insurance certificate No. 130000625 to Charlie C. Rivers, called therein the insured, in the amount of $1,500, payable to his wife, Lela J. Rivers, the plaintiff, at his death, provided at such time the certificate of insurance was in force and effect. The premiums on the insurance certificate issued to Charlie C. Rivers were paid bi-weekly by Linn Mills Company, partly by deductions from Rivers' pay cheque, and partly by its contributions.
In November 1954 Charlie C. Rivers quit work with the Linn Mills Company by reason of a cold and rheumatism in his leg. From then until his death on 5 June 1955, at the age of 64, he did not work for Linn Mills Company. Charlie C. Rivers continued to pay to Linn Mills Company his part of the premium on his insurance certificate due to the defendant from the time he stopped work in November 1954 until 22 February 1955, at which time he made his last bi-weekly payment. This payment covered the period up through the date of 12 March 1955.
In March 1955 Charlie C. Rivers gave Blanchard Carter a $10 bill, and asked him to go to Linn Mills Company and pay his insurance. Carter went into the office of Linn Mills Company with the $10 bill in his hand, and told Mrs. Shulenberger he wanted to pay Charlie C. Rivers' insurance. She said his insurance had expired. Carter replied, thank you, and walked out. Carter went back, and told Charlie C. Rivers a lady in the office said his insurance had expired. Rivers said:
J. D. Rivers, a son of Charlie C. Rivers, testified that subsequent to November 1954, his father made payments on his insurance to the mill, and sometimes his father gave him money to make the payments and he did. Sometime after Christmas, in the early part of January, he went to the mill office to make a payment, and Mrs. Shulenberger, taking the money, said: 'I believe we terminated him.' Then she got his record-- 'I guess it was a record' --and marked down on it that the insurance was paid. She tore up the termination slip. That payment paid the insurance up until the next pay day.
Plaintiff alleged in her complaint that Charlie C. Rivers had fully paid the premiums on his insurance 'through March of 1955.'
Defendant refused to pay plaintiff the face value of the insurance certificate, after notice of Charlie C. Rivers' death and demand for payment.
Plaintiff introduced into evidence the group insurance certificate No. 130000625.
At the close of plaintiff's evidence, the court denied the defendant's motion for judgment of nonsuit, and the defendant excepted.
The defendant then offered evidence as follows: Charlie C. Rivers last worked for Linn Mills Company in November 1954, and was not employed by the company, and did not receive any pay from it, at any time after that date. The employees of the mill can avail themselves of the provisions of the group policy if they want to. All of them have not done so. It is discretionary. Charlie C. Rivers chose to have insurance under the group policy. His premiums were paid by deducting 75 cents a week from his pay cheque and by the mill paying 46 cents a week. He had this insurance while he was employed. He made a payment of $1.50 on his insurance certificate on 22 February 1955, which paid his insurance through 12 March 1955.
Mrs. Jo. Shulenberger, office manager for Linn Mills Company, testified:
She further testified: ' Mrs. Shulenberger did not give Charlie C. Rivers a copy of the termination of insurance or employment that she sent to the defendant.
The defendant received notice from Linn Mills Company that Charlie C. Rivers employment with it was terminated on 12 March 1955. Since then it has not received any money from any-one as a payment on the premiums on Charlie C. Rivers' insurance certificate. As of 12 March 1955 it terminated his insurance certificate.
At the close of all the evidence defendant renewed its motion for judgment of nonsuit, which the court denied, and the defendant accepted. Defendant assigns as error the failure of the court to nonsuit the plaintiff.
The certificate of insurance issued to plaintiff's insured, and introduced in evidence by plaintiff, contains this language: 'The insurance upon the life of any insured under the Group Insurance Policy shall cease automatically upon the occurrence of any-one of the following events: * * * (b) the cessation of premium payments on account of such Insured's Insurance hereunder.'
This certificate of insurance states that it is subject to the terms and conditions of the Group Insurance Policy issued to Linn Mills Company, which Group Insurance Policy contains this language: 'The insurance hereunder of any Insured shall cease automatically upon the occurrence of any of the following events: * * * (2) the cessation of the premium payments on account of such persons insurance hereunder.'
The certificate of insurance issued to plaintiff's insured also contains these words: 'This certificate is merely evidence of insurance provided under said Group Insurance Policy, which insurance is effective only if the Insured is eligible for insurance and becomes and remains insured in accordance with the provisions, terms and conditions of the said policy.'
The certificate of insurance issued to plaintiff's insured contains these words: 'The insurance does not at any time provide paid-up insurance, cash or loan value. ' And also these words: 'Upon receipt of satisfactory proof of death of the Insured while insurance under the Group Insurance Policy with respect to such insured is in force, the Insurance Company will pay the amount of life insurance shown in the schedule on the first page to the beneficiary * * *. ' The Group Insurance Policy issued to Linn Mills Company has this Insuring Clause: 'Upon receipt of due proof of the death of any person occurring while insured under this policy and while this policy is in force, the Insurance Company agrees to pay, at its Home Office in Raleigh, North Carolina, to the person or persons entitled thereto under the provisions of this policy, the amount for which such person's life is insured.'
The Group Insurance Contract here was made by the defendant insurer and Linn Mills Company, instead of between the insurer and the insured employees of Linn Mills Company, and affects four parties-- the insurer, the employer, the insured and the beneficiary. 'It should be borne in mind, however, that group insurance is not indemnity insurance for the benefit of the employer, but insurance upon the life of the employee for his personal benefit and the protection of those depending upon him. * * * ' 29 Am.Jur., Insurance, p. 1027.
This Court said in Rees v. Jefferson Standard Life Ins. Co., 216 N.C. 428, 5 S.E.2d 154, 155: 'It is generally understood that the nonpayment of a premium when due, or within the period of grace thereafter, in the absence of some extension or waiver, automatically avoids a policy of insurance. ' In Allen v. National Accident & Health Ins. Co., 215 N.C. 70, 1 S.E.2d 94, 95, it is said: 'The payment of premiums is of the essence of the undertaking and upon its compliance depends the life and success of the insurance company.'
In Modlin v. Sovereign Camp., W. O. W., 208 N.C. 576, 181 S.E. 559, the plaintiff was nonsuited, and a recovery of disability benefits under a beneficiary certificate issued to him by the defendant was held barred by forfeiture of contract for nonpayment of dues prior to notice of disability.
Dewease v. Travelers' Ins. Co., 208 N. C. 732, 182 S.E. 447, was a suit to recover on a certificate of group insurance. Plaintiff claimed total disability. She was employed by Highland Park Manufacturing Company, and amounts sufficient to pay the premiums on her policy were...
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