Watts v. Equitable Life Assur. Soc. of United States

• Decision Date: 08 December 1942
• Docket Number: C. C. No. 660
• Citation: 23 S.E.2d 923,125 W.Va. 209
• Parties: WATTS v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.
• Court: West Virginia Supreme Court

23 S.E.2d 923

125 W.Va. 209

WATTS v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.

C. C. No. 660

Supreme Court of West Virginia.

Dec. 8, 1942

Rehearing Denied Feb. 15, 1943.

R. D Heironimus, of Davis, for plaintiff.

Tusca Morris and Robert C. Morris, both of Fairmont, for defendant.

FOX President.

On June 1, 1929, the Consolidation Coal Company, then a Maryland corporation, obtained from the Equitable Life Assurance Society of the United States a group life insurance policy, insuring the lives of its employees, and a certificate was issued by the insurer and delivered to George L. Watts, then an employee of the coal company, which, in effect, advised him that the coal company had contracted to insure his life in the sum of two thousand dollars, and the plaintiff, referred to in said certificate as "Glen B Watts", was named beneficiary therein. The certificate reads as follows: "The Equitable Life Assurance Company of the United States hereby certifies that the Consolidation Coal Company, Inc., New York (hereinafter called the employer) has contracted to insure the life of George L Watts (hereinafter called the employee) for the sum of two thousand dollars with the Equitable Life Assurance society of the United States, by a policy of group insurance. Subject to the terms and conditions of the policy the insurance is to be payable to the beneficiary upon receipt of due proof death of employee occurring while insured thereunder. Beneficiary Glen B. Watts. ***."

On the back of the certificate certain provisions were made with respect to the termination and conversion under the provisions of the policy under which the certificate was issued, and it is further provided that "This individual certificate is furnished in accordance with the terms of the Equitable group insurance policy, which, together with the employer's application therefor, constitutes the entire contract between the parties." George L. Watts died on or about the 11th day of September, 1939, and on May 26 1940, an action of assumpsit was instituted by Glenn D. Watts, beneficiary named in the certificate aforesaid, and process therein made returnable to May rules, 1940. On February 14, 1942, by leave of court, plaintiff filed an amended declaration, and the action proceeded thereon. The body of the amended declaration is in the words and figures following: "Glenn D. Watts, he being the same person named beneficiary in the hereinafter referred to policy of insurance as Glenn B. Watts, Plaintiff, complains of The Equitable Life Assurance Society of the United States, a corporation, defendant, who has been summoned to answer this: For that the defendant by virtue of the policy of insurance, a copy of which is herewith filed, owes two thousand ($2,000) dollars to the plaintiff, because of the death of George Lee Watts, whose life was insured by said policy, and who died on or about the 11th day of September, in the year nineteen hundred and thirty-nine at Fairmont, West Virginia."

There was filed with this declaration a photostatic copy of the certificate mentioned above, No. 3028-10677, as the "policy of insurance" referred to in the declaration. The group policy issued by the defendant, and to which the certificate aforesaid refers, was not filed.

The defendant demurred to the amended declaration. The substance of the demurrer was that the certificate referred to in the declaration did not constitute a contract upon which the plaintiff could recover; and that if the plaintiff elected to employ the statutory form of declaration, he could only proceed by filing with the declaration a copy of the group policy referred to in the certificate; that under the terms of the certificate itself, the group insurance policy issued by the defendant, together with the employer's application therefor, constituted the entire contract of insurance between the parties. At the same time, the defendant filed its specification of defense, in which it sets up certain provisions of the group insurance policy and amendments thereto, which it contended barred any recovery by the plaintiff in his action, and the plaintiff then interposed his demurrer thereto. There was also filed what is termed a statutory issue plea and a general issue plea.

The court overruled defendant's demurrer to the amended declaration, and also the demurrer of the plaintiff to the specification of defense; so that the status of the action in the circuit court is this: Plaintiff's declaration and the specification of defense thereto are upheld, the result of which is that the defendant has the same right to make defense to the action, on the grounds growing out of the provisions of group insurance policy, to the same extent that he would have had such right had the group insurance policy, or a copy thereof, been filed as a part of the plaintiff's declaration.

However, neither party to the action was satisfied with this situation, the defendant contending that, by reason of the failure to file with the amended declaration the group policy, or a copy thereof, its demurrer thereto should have been sustained; while the plaintiff, being satisfied with the action of the court in overruling the demurrer to his declaration, contends that the court's action in overruling his demurrer to the specification of defense was inconsistent with its action in overruling the demurrer to the declaration, and was erroneous. Therefore, the circuit court, on the joint application of the parties, certified its action to this court.

It is obvious that a decision on one question will determine this case. That question is whether the demurrer to the plaintiff's amended declaration should have been sustained by reason of the failure to file therewith the group insurance policy, or a copy thereof.

Code, 56-4-17, provides the form of declaration which may be used in actions for recovery on a policy of insurance. The form is a simple one, but it contemplates that the insurance policy, or a copy thereof, upon which recovery is sought, shall be filed therewith. The question here presented is whether the certificate, which the plaintiff filed with his declaration, may be treated as the policy of insurance on which he may seek a recovery. A policy of insurance is, ordinarily, the contract between the parties, and it cannot be disputed that if recovery is sought thereon, it must, in some way, come into the case. Under the statutory practice in relation to actions on insurance policies, the policy which ordinarily evidences the contract between the parties may be introduced by filing the same, or a copy thereof, with the declaration, and, if a plaintiff elects to use the statutory form of declaration, we do not think he can proceed with his action until the policy upon which he relies for recovery, or a copy thereof, is so filed. When so filed, the policy becomes a part of the declaration. Staats v. Georgia Home Ins. Co., 57 W.Va. 571, 50 S.E. 815, 4 Ann.Cas. 541; Hubbard v. Equitable Life Assur. Soc., 81 W.Va. 663, 95 S.E. 811, 4 A.L.R. 886; Bowling v. Continental Insur. Co., 86 W.Va. 164, 103 S.E. 285, 17 A.L.R. 376.

We think it clear that the group insurance policy, sometimes referred to as the master policy, is, ordinarily, and in this case certainly, the real contract of insurance upon which plaintiff must rely for recovery. In Crawford and Harlan on Group Insurance, section 15, page 31, it is stated:

"*** the master policy issued and delivered to the employer is the real contract of insurance under the group plan, or, as it is frequently said, the primary contract. This is true because it is the basis of the certificate issued to the employee. It is the foundation of the insurance provided for the employee's benefit. It contains the terms and conditions of the insurance agreement, and in practically every instance the certificate by its own provisions states that it is issued in accord with the terms and conditions of the group policy to which it refers.

"The certificate is not a contract between the employer and the employee. It contains no promise on the part of the employer to indemnify anyone against loss. It is merely a statement where issued by the employer, that he has taken out a group policy of insurance upon the lives of his employees, and that under and subject to the terms and conditions of the policy, the named employee is insured as therein outlined. This same construction prevails where the certificate is issued by the insurer to the employee. Nor, as a general rule, does the certificate constitute...