Satz v. Prudential Ins. Co. of America

• Decision Date: 20 December 1949
• Docket Number: No. 27782,27782
• Citation: 225 S.W.2d 480
• Parties: SATZ v. PRUDENTIAL INS. CO. OF AMERICA.
• Court: Missouri Court of Appeals

Page 480

225 S.W.2d 480

SATZ v. PRUDENTIAL INS. CO. OF AMERICA.

No. 27782.

St. Louis Court of Appeals, Missouri.

Dec. 20, 1949.

Max Sigoloff, St. Louis, Mo., for appellant.

Fordyce, White, Mayne, Williams & Hartman, St. Louis, for respondent.

HUGHES, Judge.

The suit is by the widow of Sam Satz as the beneficiary named in a certificate issued to her husband for $1,000 life insurance as an employee of Genelle Garment Co., Inc.; the employees of the garment company being covered by a group life insurance policy issued by The Prudential Insurance Company of America.

At the direction of Sam Satz, the employee, the garment company, the employer, deducted seventy-five cents per month from his earnings as a contribution toward the payment by it of the premium on the group policy of insurance.

The group policy was issued on April 6, 1939, to take effect on the 1st day of March, 1939. Satz was an employee on those dates and continued as such until his death on May 21, 1943. However, Satz became sick on December 14, 1942, which was his last day of active service for his employer. Thereafter he was totally incapacitated until he died on May 21, 1943, of coronary occlusion. However, the employer's records show that Satz continued to be considered an employee after he became ill and until his death. The employer paid the group insurance premium on Satz' certificate until March 1, 1943, at which time the insurance company canceled the group insurance policy. No notice was given to Satz that his certificate or the group insurance policy was to be or had been canceled. The correctness of the insurance company's action in canceling or refusing to renew the group policy is not questioned in this case.

Both the group policy and the certificate to Satz contained a clause under the heading of 'Extension of Death Benefit,' providing that if, while the policy was in force the employee, prior to the sixtieth anniversary of the date of his birth and prior to the termination of his employment as defined in the policy, and after having been continuously insured under the policy for at least one year immediately preceding the last day on which he was actively at work, became totally and permanently disabled as a result of bodily injury or disease so as to be wholly prevented thereby from engaging in any business or occupation and from performing any work for compensation of monetary value or for profit, such employee would be entitled to the benefits of this section. The follow the extension privileges, which we omit, because, as shown by the terms of the clause, it can only be taken advantage of by an employee prior to the sixtieth anniversary of the date of his birth and prior to the termination of his employment. The record shows Satz was more than sixty years of age when the policy was issued, and there was no termination of his employment before his death.

The group policy and the certificate also contained a clause as follows:

'Conversion of Employee's Insurance.--Within thirty-one (31) days: (a) after termination of employment of an Employee insured hereunder, or (b) prior to the termination of his insurance hereunder if insurance on his life has been continued hereunder in accordance with the provisions of the section of this Policy entitled 'Extension of Death Benefit,' an Employee may, without evidence of insurability, obtain an individual policy of life insurance, as hereafter provided, upon application therefor in writing and payment, at any time within said thirty-one (31) days, of the first premium thereon. Such individual policy shall become effective only upon termination of his insurance under this Policy, and may be on any of the forms customarily issued by the Company (except policies of term insurance and polices with any form of total and permanent disability benefits) for an amount equal to the amount of insurance for which he is insured under this Policy on the date of the discontinuance of his insurance hereunder. The premium for such individual policy shall be at the then current rates of the Company according to the class of risk to which such Employee belongs and at the age attained by him at that time.'

A further clause headed 'Termination of Contributory Insurance,' provides that subject to the extension of death benefit clause, the contributory insurance on the life of the employee shall automatically cease upon the date of cancellation of the policy or upon the date the employee fails to make a contribution when due, whichever date may be the earlier, or thirty-one days after the date of termination of the employee's employment if the termination precedes the date of cancellation of the policy and such default in payment of contribution.

A jury being waived, the case was tried before the court, resulting in a finding and judgment in defendant's favor, from which plaintiff appeals to this court.

Only two points are relied upon by appellant: (1) that the cancellation of the group policy without prior notice to the employee insured did not have the effect of canceling the employee's certificate of insurance, and (2) that the finding of the trial court that the employer was the agent of the insured in collecting monthly premiums was erroneous.

The law is well settled in the case of Crawford v. Metropolitan Life Ins. Co., Mo.App., 167 S.W.2d 915, 924, and in the case of Longley v. Prudential Ins. Co. of America, Mo.App., 161 S.W.2d 27, as well as in several other cases, that a contract of group insurance is one between the insurer and the employer for the benefit of the latter's employees, and that the certificate of insurance which is issued to the individual employee is merely a statement to him that he is insured under the group policy. Therefore, the rights of an employee or his beneficiary are to be determined under the provisions of the contract between the insurer and the employer. The burden is upon the plaintiff beneficiary to show...