Shears v. All States Life Ins. Co., 7 Div. 652.

• Decision Date: 22 January 1942
• Docket Number: 7 Div. 652.
• Citation: 5 So.2d 808,242 Ala. 249
• Parties: SHEARS v. ALL STATES LIFE INS. CO.
• Court: Alabama Supreme Court

5 So.2d 808

242 Ala. 249

SHEARS v. ALL STATES LIFE INS. CO.

7 Div. 652.

Supreme Court of Alabama

January 22, 1942

Appeal from Circuit Court, Calhoun County; Lamar Field Judge.

Chas. F. Douglass, of Anniston, and Horace C Wilkinson, of Birmingham, for appellant.

Knox Liles, Jones & Blackmon, of Anniston, for appellee.

LIVINGSTON, Justice.

This action is to recover total and permanent disability benefits claimed to be due under a group policy of insurance and certificate issued by appellee, defendant in the court below on April 1, 1929, upon the life of appellant, N.C. Shears, plaintiff in the court below, and other employees of the Southern Manganese Corporation, and kept in force by its successor corporations, including the Monsanto Chemical Company, by whom appellant was employed at the time he allegedly became permanently and totally disabled.

The master or group policy is referred to as master policy No. 103-G. A certificate numbered 273, insuring the life of appellant for $1,000, under the terms of the master policy, was issued and delivered to appellant on April 1, 1929, and a rider was afterwards issued and attached to the master policy and certificate numbered 273, increasing appellant's insurance to $2,000, as of April 1, 1928. The master policy and certificate contained a provision for "permanent total disability benefits," as hereinafter indicated.

Appellant rested its defense upon the theory that appellant's employment by the Monsanto Chemical Company, hereinafter called the employer, terminated either on June 15, 1938, or August 31, 1938, or that the policy and certificate sued on were cancelled as of June 30, 1938, by an agreement between appellee and employer, entered into on July 1, 1938; and that the appellant failed to furnish appellee with due proof of his disability before the policy was cancelled or before the termination of his employment.

The trial court gave the general affirmative charge, without hypothesis, for the appellee.

The pertinent provisions of the policy are:

"Employees Insured--Employees are automatically insured in accordance with the terms of the plan of insurance above, subject to the terms of this policy.

"The employer shall furnish the company with the names of all employees as they become eligible for insurance hereunder, with the information as to each, necessary to determine the age, the amount of insurance, and the effective date of the insurance.

"Unintentional neglect on the part of the employer to furnish the name of any employee eligible for insurance hereunder shall not invalidate the insurance on the life of such employee.

"Termination of Insurance--The insurance on any employee shall cease upon the termination of his employment, except as hereinafter provided. If an employee is disabled, given leave of absence, or temporarily laid off, the employment need not be considered terminated, provided the insurance is continued on all absent employees under like conditions.

"The employer shall notify the company of all employees whose employment shall terminate and also the dates of the terminations of their employment.

"Premiums--All premiums are payable in advance at the home office of the company, but may be paid to an authorized agent of the company upon delivery of a receipt signed by the president or secretary, and countersigned by said agent. If any premium shall not be paid when due, this policy shall terminate except as hereinafter provided.

"In addition to the advance premium there shall be due:

"1. To the company--

"(a) The balance, if any, of the first premium as determined by the amount of insurance on the employees initially insured hereunder, such balance to be due when determined.

"(b) A prorata premium for any additional or increased insurance computed to the next date on which premium shall be due, following the date such insurance is effective.

"2. To the employer--

"A refund of any unearned premium paid for any employee insured hereunder, whose insurance has terminated for any reason, other than death or permanent and total disability. * * *

"Renewal Privilege--This policy may be renewed from year to year for a further term of one year at the option of the employer, upon payment within the days of grace of the premium for the amount of insurance as renewed, as determined by the schedule of rates embodied herein. * *

"The Individual Certificates Furnished the Employees as Hereinafter Provided Shall Contain the Following Provision:

"Permanent Total Disability Benefits--'Upon due proof that since the payment of the initial premium upon this contract, before a default in the payment of any subsequent premium, and before the anniversary of this contract nearest the sixtieth anniversary of the date of birth, the insured has become wholly disabled by bodily injuries or disease and will be continuously and wholly prevented thereby for life from engaging in any occupation or employment for wage or profit, the company will waive the payment of any premiums which may fall due on this contract for such employee during such disability and will pay in full settlement for such employee under this contract the amount of insurance in force hereunder at the time of the receipt of due proof of such disability in a fixed number of installments chosen by the insured from the following table, the first installment to be paid immediately upon receipt of due proof of such disability. * * *

"Individual Certificate of Insurance and Conversion Privilege--The company will issue to the employer for delivery to each employee whose life is insured under this policy, an individual certificate setting forth a statement as to the insurance protection to which he is entitled and to whom payable. Any employee of the employer covered under this group policy shall, in case of the termination of employment for any reason whatsoever, be entitled to have issued to him by the company, without evidence of insurability, upon application to the company made within thirty-one days after such termination and upon the payment of the premium applicable to the class of risks to which he belongs and to the form and amount of the policy at his then attained age, a policy of life insurance in any one of the forms customarily issued by the company, except term insurance in an amount equal to the amount of protection under such group insurance policy at the time of such termination. * *

"Incontestability--This policy shall be incontestable after one year from its date of issue, except for nonpayment of premiums. * * *

"Entire Contract--This policy, together with the application of the employer, and the individual applications, if any, of the employees insured hereunder, shall constitute the entire contract between the parties hereto. All statements made by the employer or by the individual employees shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall be used in defense of a claim under the policy unless it is contained in the written application therefor."

On May 15, 1938, the employer paid to appellee the annual premium on master policy No. 103-G, subject to adjustments provided for in the policy, for the year beginning April 1, 1938, and ending March 31, 1939, listing all employees covered as of April 1, 1938, including appellant.

On July 1, 1938, at the request of the employer, the appellee cancelled the master policy (No. 103-G) as of midnight June 30, 1938. The record is silent as to whether or not appellant was notified of the intended cancellation, but it does appear that the trial court rejected an offer of proof that he received no such notice from either the appellee or employer, and there is no evidence that he consented to it.

Appellant testified that on June 15, 1938, Mr. O'Neal, employer's superintendent, called appellant to the superintendent's office and advised him, "I have got to lay you off awhile. On the conditions of the plant and all, although you would make us a good man down on the lower end at No. 10 furnace, but you are not able to do that work. I am going to pay you * * * we are going to pay you for July and August your salary." Appellant further testified "I worked until I was laid off. They told me they were going to lay me off awhile. * * * I have never been back to work for Monsanto Chemical Company. They have never called me back to work. * * The Monsanto Chemical Company did not at any time notify me that I had been discharged. They did not tell me I had been discharged: the word 'discharge' was not used in any of the conversations with the chemical company." And further, that "After I received the certificate I paid premiums on the insurance: they taken it out of my pay: they told me they would take sixty percent of it and they would pay forty: in other words, I paid sixty percent of the premium and the company paid forty. That was the arrangement when it started in April 1929, and that arrangement continued until I left there. The sixty percent amounted to $1.20 the last policies."

Clearly the evidence presented a question for the jury as to whether or not appellant was, prior to June 30, 1938, wholly disabled by bodily injury or disease, and will be continuously and wholly prevented thereby for life from engaging in any occupation or employment for wage or profit, within the meaning of the policy, and the decisions of this court. See Mutual Life Ins. Co. of New York v. Clyde Danley, Ala.Sup., 5 So.2d 743; United States Casualty Co. v. Perryman, 203 Ala. 212, 82 So. 462; Travelers' Ins. Co. v. Plaster, 210 Ala. 607, 98 So. 909; New York Life Ins. Co. v. McLean, 218 Ala. 401, 118 So. 753; Metropolitan Life Ins. Co. v. Blue, 222 Ala. 665, 133 So. 707, 79 A.L.R. 852; New...