Washington National Insurance Co. v. Ollie and Conway

• Decision Date: 08 July 1940
• Docket Number: 4-6024,4-6027
• Citation: 142 S.W.2d 226,200 Ark. 1001
• Parties: WASHINGTON NATIONAL INSURANCE COMPANY v. OLLIE AND CONWAY
• Court: Arkansas Supreme Court

142 S.W.2d 226

200 Ark. 1001

WASHINGTON NATIONAL INSURANCE COMPANY v. OLLIE AND CONWAY

Nos. 4-6024, 4-6027

Supreme Court of Arkansas

July 8, 1940

Appeals from Ashley and Dallas Circuit Courts; DuVal L Purkins, Judge; reversed.

Judgments reversed and causes dismissed.

R J. Wetterlund, Compere & Compere and Rose, Loughborough, Dobyns & House, for appellant.

L. Weems Trussell, Ovid T. Switzer and Clinton J. Campbell, for appellee.

MCHANEY J. HUMPHREYS and MEHAFFY, JJ., dissent.

OPINION

MCHANEY, J.

On March 1, 1937, appellant issued its group insurance policy No. J 169-C to the Crossett Lumber Company and affiliated companies. At the same time it issued certificate No. 575 to Chester Ollie, an employee of the Crossett Chemical Company, and certificate No. 144 to Roy Conway, an employee of the Crossett Lumber Company. Appellee, D. A. Ollie, is the mother of Chester Ollie and beneficiary named in his certificate. Appellee, Olivia Conway, is the widow of Roy Conway and beneficiary named in his certificate.

The master policy, as also the certificates, contained provisions for disability benefits to the certificate holders, and a supplement thereto issued at the same time provided for death benefits to such holders in this language: "Upon receipt of due proof of the death, during the continuance of this Supplement to Group Accident and Health Policy No. J 169-C, or any renewal thereof, of any insured employee, the company agrees to pay," etc. Another provision is: "This policy may be renewed for successive periods of one year with the consent of the employer and at the option of the company."

By agreement between the employer and appellant, the policy was canceled as of February 28, 1939, at which time both Chester Ollie and Roy Conway were disabled by disease and were receiving weekly disability benefits, said Ollie having become ill of pulmonary tuberculosis on February 7, 1939, and said Conway having become ill of the same disease on December 29, 1938. Disability benefits were paid to each of them from said dates until their respective deaths, Ollie having died on May 19, 1939, and Conway on June 15, 1939. Their respective beneficiaries demanded payment of the death benefits provided in said supplement, which was refused, and they brought separate actions to recover. Trials to the court sitting as a jury resulted in a judgment in each case against appellant for $ 500, penalty and attorney's fee, from which is this appeal.

The facts are not in dispute, but are stipulated. On February 28 1939, the employer canceled the group insurance contract in accordance with the clause therein, above quoted. Thereafter, appellant continued to make disability payments to Ollie and Conway, and refused to accept premium payments tendered by the employer on the lives of those of its employees who were disabled on the date of cancellation, the amount of such premiums so tendered being at the rate payable for...