Williams v. Sun Life Assur. Co. of Canada

• Decision Date: 02 December 1940
• Parties: JAMES WESLEY WILLIAMS, APPELLANT, v. SUN LIFE ASSURANCE COMPANY OF CANADA, A CORPORATION, RESPONDENT
• Court: Kansas Court of Appeals

148 S.W.2d 112

235 Mo.App. 741

JAMES WESLEY WILLIAMS, APPELLANT, v. SUN LIFE ASSURANCE COMPANY OF CANADA, A CORPORATION, RESPONDENT

Court of Appeals of Missouri, Kansas City

December 2, 1940

Appeal from Circuit Court of Pettis County.--Hon. Dimmitt Hoffman Judge.

AFFIRMED.

Judgment affirmed.

Montgomery Martin & Montgomery for respondent.

(1) A contract of group insurance, such as is here involved, is a contract between the employer and the insurance company for the benefit of those employees of the employer who see fit to avail themselves of the protection provided. The contracting parties are the employer and the insurer and such rights as the individual employees obtain are merely incidental. Gallagher v. Simmons Hardware Co., 214 Mo.App. 111; Hardy v. Metropolitan Life Ins. Co. (Mo. App.), 7 S.W.2d 746; Steffen v. Equitable Life Assur. Soc. (Mo App.), 64 S.W.2d 302. (2) The contracting parties, the insurer and the employer, may, by mutual agreement between themselves and without the consent of the insured employees, alter or amend the group contract as they may see fit, or even cancel it in its entirety. Butler v. Equitable Life Assur. Soc., 233 Mo.App. 94, 93 S.W.2d 1019; Davis v. Metropolitan Life Ins. Co., 161 Mo. 655, 32 S.W.2d 1034; Carpenter v. Metropolitan Life Ins. Co. (La. App.), 159 So. 467; Stoner v. Equitable Life Assur. Soc. (Pa.), 28 Dauphin Co. Reports 235. (3) However, in the case of a group contract which contemplates that the insured employees shall make contributions toward the cost of their insurance they are regarded as having such a vested interest in the group contract that changes therein which affect their coverage are not binding on them unless they are notified thereof. Butler v. Equitable Life Assur. Soc., 233 Mo.App. 94, 93 S.W.2d 1019. (4) When the railroad company and the respondent amended the group policy on October of 1932 by deleting therefrom the total and permanent disability benefit provisions as to employees who should thereafter become insured or whose insurance should be thereafter reinstated, it was not necessary to notify appellant of such amendment at that time because his insurance was not affected. (5) When the railroad company notified the respondent under date of January 12, 1933, that appellant had ceased to be employed by it as of November 30, 1932, and requested the cancellation of his insurance as of the date last named, and when the respondent accepted such notice and acting thereon did cancel appellant's insurance, he ceased to be insured and the certificate held by him became void and of no further force or effect. No other conclusion is possible in view of the plain and unequivocal language of the group contract. Magee v. Equitable Life Assur. Soc. (N. D.), 244 N.W. 518; Thull v. Equitable Life Assur. Soc. (Ohio App.), 178 N.W. 850; Aetna Life Ins. Co. v. Lembright (Ohio App.), 166 N.E. 586; Curd v. Travelers Ins. Co. (Ga.App.), 180 S.E. 249; Simaski v. Equitable Life Assur. Soc., 277 N.Y.S. 424; Kowalski v. Aetna Life Ins. Co. (Mass.), 165 N.E. 477; Colter v. Travelers Ins. Co. (Mass.), 170 N.E. 407. (6) When the railroad company informed the respondent that appellant had re-entered its employment and requested that he be again insured under the group contract, no insurance against total and permanent disability was then available to him as an employee whose insurance was reinstated. This, by reason of the fact that the policy had been amended. (7) The respondent performed its full duty toward the appellant when it issued and caused to be delivered to him a new certificate correctly outlining his coverage at the time of his reinstatement. (8) If, under the circumstances, notice to the appellant of the amendment to the group contract could be considered essential, the new certificate which was issued to him in and of itself constituted notice of such fact. It was his duty to read the new certificate which he received and, if he found it unsatisfactory, it was his duty to reject it. Steward v. Mutual Life Ins. Co. (Mo. App.), 127 S.W.2d 22; Neuner v. Gove (Mo. App.), 133 S.W.2d 290.

Crawford & Harlan for appellant.

(1) Plaintiff's coverage, under the group policy, insuring against total and permanent disability could not be cancelled or altered without his consent, as he had a vested interest therein. Prudential Ins. Co. v. Ferguson, 51 Ga.App. 341, 180 S.E. 503; Hinkler v. Equit. Life Assur. Soc. (Ohio), 22 N.E.2d 451. (2) Plaintiff's coverage could not be cancelled or altered without notice to him before the cancellation or alteration became effective. Butler v. Equit. Life Assur. Soc. (Mo. App.), 93 S.W.2d 1019; Prudential Ins. Co. v. Ferguson, 51 Ga.App. 341, 180 S.E. 503; Voris v. Aetna Life Ins. Co., 26 F.Supp. 722; Leavens v. Metrop. Life Ins. Co. (Me.), 197 A. 309; Emerick v. Conn. Gen. Life Ins. Co. (Conn.), 179 A. 335. (3) Plaintiff, by retaining the second certificate which in no way indicated that it was in lieu of the first, cannot be said, as a matter of law. (a) To have had notice of the cancellation or alteration of his disability coverage. Butler v. Equit. Life Assur. Soc. (Mo. App.), 93 S.W.2d 1019; Dubinsky v. Hartford Fire Ins. Co. (Mo. App.), 196 S.W. 1045; Wilson et al. v. National Ben Franklin Fire Ins. Co. (Mo. App.), 226 S.W. 338; Gardner & Sons v. Sandard Ins. Co., 58 Mo.App. 611. (b) To have consented to or acquiesced in its cancellation or alteration. Hinkler v. Equit. Life Assur. Soc. (Ohio), 22 N.E.2d 451; Garnsky v. Metrop. Life Ins. Co. (Wis.), 287 N.W. 731; Gillen v. N. Y. Life Ins. Co., 178 Mo.App. 89, 161 S.W. 667; Head v. N. Y. Life Ins. Co. (Mo.), 147 S.W.2d 827. (4) A question of fact was made for the jury whether the plaintiff had notice of, or had consented to, or acquiesced in the alteration of his coverage, that is, whether his total disability insurance was in effect when he became so disabled. Butler v. Equit. Life Assur. Soc. (Mo. App.), 93 S.W.2d 1019. (5) Plaintiff's coverage could be terminated only when he ceased to be an employee, and at no time did he ever cease to be an employee, there being a difference between termination of employment and ceasing to work. Porter v. Equit. Life Assur. Soc. (Mo. App.), 71 S.W.2d 766; John Hancock Mut. Life Ins. Co. v. Pappageorgu (Ind.), 24 N.E.2d 428; Leavens v. Metrop. Life Ins. Co. (Me.), 197 A. 309; Ambrose v. Metrop. Life Ins. Co. (N.J.), 10 A.2d 479. (6) Even if plaintiff consented to the cancellation of his disability coverage, it was ineffective, since there was no consideration to support the cancellation. Hinkler v. Equit. Life Assur. Soc. (Ohio), 22 N.E.2d 451. (7) The employer is, and was the agent for the insurer under the group insurance set-up. Consequently, the employer acted for the insurer, and the knowledge of the employer cannot be imputed to the employee (plaintiff). Voris v. Aetna Life Ins. Co., 26 F.Supp. 722; Sullivan v. John Hancock Mut. L. Ins. Co. (Mo. App.), 110 S.W.2d 870; Emerick v. Conn. Gen. L. Ins. Co. (Conn.), 179 A. 335; Sec. 5733, R. S. Mo. 1929.

SPERRY, C. Campbell, C., concurs.

OPINION

SPERRY, C.

--James Wesley Williams, plaintiff below, sued Sun Life Assurance Company, defendant, on an insurance contract. There was a directed verdict for defendant and plaintiff appeals.

Plaintiff, on and prior to October 5, 1931, was an employee of Missouri Pacific Railroad Company, hereinafter referred to as employer. He was permanently and totally disabled while so employed in 1936.

Effective as of October 5, 1931, defendant issued to employer its policy of group insurance numbered 1682-G. As initially issued this group policy contained a provision insuring the employees covered, including plaintiff, against total and permanent disability and provided benefits in the amount of $ 18 per month for sixty months for each thousand dollars of life insurance provided, upon the happening of such contingency. The policy as written ran for the term of one year with the right in the employer to renew said policy for additional terms of one year from the anniversary date thereof. It was issued in consideration of the payment in advance by the employer of certain specified monthly premiums. However, an arrangement existed between the said railroad company and its employees whereby the employees insured under such group contract contributed toward the premium paid by the employer. Such contributions were deducted from plaintiff's monthly pay check.

The policy provided that employees of such employer, within certain specified classes, upon making written application therefor, would be entitled to insurance under such group contract. As to the termination of any individual employee's insurance the contract provided:

"The assurance on each employee covered hereunder shall, while this policy remains in force, continue until written notice shall have been given to the company by the employer, on the form supplied by the company for the purpose, to the effect that the said employee is no longer in the service of the employer and requesting discontinuance of said assurance. . . . No employee shall be deemed to be assured hereunder after the company has received written notice from employer that such employee has left its service."

Provision was made for the reinstatement of any employee's coverage which had been cancelled through notice given by the employer. Under Provision V of the group contract the employer was obligated to furnish respondent with the names of employees who should leave the service or be dismissed therefrom, giving the date of termination of service, and provision was made for the refund of any unearned premium which had been paid as to any such employee to carry his insurance beyond the date of the termination of his employment as...