Sherberneau v. Metropolitan Life Ins. Co.

• Decision Date: 16 January 1973
• Docket Number: No. 3,Docket No. 12495,3
• Citation: 44 Mich.App. 339,205 N.W.2d 213
• Parties: Elsie A. SHERBERNEAU, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 213

205 N.W.2d 213

44 Mich.App. 339

Elsie A. SHERBERNEAU, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation Defendant-Appellee.

Docket No. 12495.

Court of Appeals of Michigan, Division No. 3.

Jan. 16, 1973.

Released for Publication March 27, 1973.

William M. Davison, Traverse City, for plaintiff-appellant.

Charles H. Menmuir, Traverse City, for defendant-appellee.

Before R. B. BURNS, P.J., and HOLBROOK and DANHOF, JJ.

HOLBROOK, Judge.

Plaintiff, Elsie A. Sherberneau, brought an action for $10,000, the principal amount of an accident and health policy issued by defendant, Metropolitan Life Insurance Company, January 1, 1961, to plaintiff's husband, Owen G. Sherberneau. Mr. Sherberneau was an agent of long standing for the defendant insurance company and wrote the application for the insurance policy in question and serviced the account by collecting premiums as was his duty as agent.

Plaintiff asserted in her complaint Inter alia that on August 3, 1966, Mr. Sherberneau died of accidental causes (carbon monoxide in the garage) and that as beneficiary she was entitled to receive the proceeds from the policy.

The defendant in his answer admitted that policy No. 3--475--682--AH was issued to plaintiff's husband as claimed by plaintiff. The defendant in its answer denied liability on the policy and asserted an affirmative defense that the premium due on the policy on July 1, 1966, had not been paid by that date nor had it been paid through the grace perido of 31 days ending August 1, 1966, and that inasmuch as the death of the insured took place after the policy had lapsed there was no liability.

The defendant offered its office records to prove that the subject premium had not been paid. These records were admitted.

In the trial Mrs. Sherberneau attempted to show that she had paid the premium on July 15, 1966, by handing to Mr. Sherberneau the cash therefor together with the notice of premium due. This testimony was objected to as violative of the Dead Man's Statute, M.C.L.A. § 600.2160; M.S.A. § 27A.2160. The objection was sustained and the testimony was not received.

Thereafter the plaintiff was permitted to make a special separate record of her proffered testimony.

After hearing the testimony and considering the exhibits and briefs of the parties, the trial court found against the plaintiff and in favor of the defendant, no cause of action.

Plaintiff on appeal asserts first that Mr. Sherberneau was an employee of defendant company and was authorized to accept premium payments at the time that she claims she paid the premium on the subject policy of insurance. Plaintiff argues that Mr. Sherberneau was merely performing an administrative act in collecting premiums and, therefore, was acting as an employee of the defendant insurance company. She further asserted that in her complaint she alleged that Mr. Sherberneau was an 'employee' of defendant and that the same was admitted in defendant's answer. However, upon reading the pleadings, the wording in paragraph 1 of the complaint appears as follows:

'That on August 2, 1966, Owen G. Sherberneau, husband of your plaintiff was an employee and a duly authorized agent for the defendant insurance company, assigned to their Traverse City, Michigan office.'

This record discloses that Mr. Sherberneau was 'an employee and a duly authorized agent for the defendant insurance company'.

The record also discloses that Mr. Sherberneau listed his occupation as being an insurance agent on the application for the insurance policy in question. We also find in the record as follows the testimony of the district manager, Bernard C. Brown, as to Mr. Sherberneau's position with the defendant company:

'Q. Now, there is no question but what Mr. Sherberneau was employed for some time as a representative of the Metropolitan Life Insurance Company. What would his official capacity be?

'A. He was an agent at the time of his death for the company.'

On cross-examination by plaintiff's counsel, Mr. Brown testified:

'Q. Now, as an agent of your company could you tell me just briefly what the job description entailed? What did he do for the company?

'A. Yes. An agent is employed as a salesman and he services accounts that are in force in his area. By service I mean collection of premiums due from policy holders that encompass or are included in this agency, sale of new life insurance and representing the company in all matters.'

Mr. Brown also testified on cross-examination:

'Q. Let's confine ourselves to the sale of policies. Did his position allow him to contact with the general public on insurance policies?

'A. Yes, sir. I mean he was licensed in the State of Michigan for the sale--to represent Metropolitan Life Insurance Company.'

The Insurance Code of 1956 provides:

'Sec. 2220. Any person who shall solicit an application for insurance upon the life of another shall, in any controversy between the insured or his beneficiary and the insurer issuing any policy upon such application, be regarded as the agent of the insurer and not the agent of the insured.' M.C.L.A. § 500.2220; M.S.A. § 24.12220.

Attached to the application for the policy in question, Mr. Sherberneau signed a statement, reading in part as follows:

'STATEMENT OF AGENT

The above application amendment form was signed by OWEN G. SHERBERNEAU in my presence before I delivered the policy on this 23 day of Jan., 1961.

'/s/ Owen G. Sherberneau (Name) Agt. (Title)'

We rule that the evidence was more than sufficient to justify the trial court in finding as a matter of fact that Mr. Sherberneau was acting as an agent of the defendant insurance company in regard to this policy of insurance and the servicing of the policy by collecting premiums thereon.

We now restate the main question raised on appeal: In a cause of action occurring August 3, 1966, by a beneficiary against an insurance company on an accident insurance policy, when testimony of the beneficiary is offered to show that the premium payment was paid by the beneficiary, within the grace period to an agent of the company, and where competent testimony had been properly admitted showing that there was an unexplained overage in the account of the agent which was sufficient to cover the premium due, is the offered testimony inadmissible by reason of the Dead Man's Statute?

The trial court answered this question in the affirmative and cited the Dead Man's Statute that was in effect at the time of the death of the insured. M.C.L.A. § 600.2160; M.S.A. § 27A.2160. The Dead Man's Statute cited by the trial court was repealed by 1967 P.A. 263, effective November 2, 1967. The new Dead Man's Statute, M.C.L.A. § 600.2166; M.S.A. § 27A.2166, became effective November 2, 1967.

It is the claim of plaintiff that the statute in effect at the time of trial (October 17, 1969) was applicable to the instant case. It is true that statutes as a general rule are given prospective effect. 21 Michigan Law & Practice, Statutes, § 105, p. 133. However, there is an exception to this general rule where the statute deals with a rule of evidence.

In the case of Ritter v. Seestedt, 212 Mich. 208, 211, 180 N.W. 412, 413 (1920), a creditor was attacking the conveyance of a theater building by a husband to his wife as being in fraud of his creditors. A statute was passed after conveyance was made, and the statute provided that a prima facie case is made out when a plaintiff testifies as to the judgment, the levies made on the property, and the complained-of conveyance. The defendant argued that the statute did not apply because it was not passed until after the conveyance was made. The Court held for the plaintiff stating:

'The fact that the act was not in effect when the conveyance was made is not of much importance. It being a rule of evidence, it is excepted from the general rules governing the interpretation of retroactive statutes.'

Also see Nash v. Robinson, 226 Mich. 146, 197 N.W. 522 (1924).

The Dead Man's Statute pertains to the admissibility of evidence, is remedial legislation, and has retroactive effect. Therefore, the statute to be applied in the instant case is M.C.L.A. § 600.2166; M.S.A. § 27A.2166, which reads as follows:

'(1) In any action against a person incapable of testifying, a party's own testimony shall not be admissible as to any matter which, if true, must have been equally within the knowledge of the person incapable of testifying, unless some material portion of his testimony is supported by some other material evidence tending to corroborate his claim.

'(2) A 'person incapable of testifying' includes any individual who is incapable of testifying by reason of death or incompetency and his heirs, legal representatives or assigns; and includes any individual, corporation or other entity, or the successors thereof, whose agent, having material knowledge of the matter, is incapable of testifying by reason of death or incompetency. A 'party's own testimony' includes the testimony of his agents, successors, assigns, predecessors or assignors.

'(3) In any such actions, all entries, memoranda and declarations by the individual so incapable of testifying, relevant to the matter, as well as evidence of his acts and habits of dealing tending to disprove or show the improbability of the claims of the adverse party, may be received in evidence.'

Under the new statute the proffered testimony of the plaintiff that she paid the premium due July 1, 1966, during the grace period by giving to the agent of defendant the cash therefor together with the notice of premium due only becomes admissible provided some material portion of her testimony was supported by some other material evidence tending to corroborate her claim.

The trial court did not rule on this aspect of the case because it determined that M.C.L.A. § 600.2160; M.S.A. § 27A.2160, the old statute in effect at the time of the death of Mr. Sherberneau, was controlling. T...