Summary
In Aetna Life Ins. Co. v. McCree, 174 Miss. 242, 164 So. 223, the Court stated in substance that the purpose of the statute enabled the insured to determine at any time by inspection of his policy whether there were any errors contained therein through inadvertence or otherwise, and to correct them or to disclose the true facts to the Insurance Company while he was carrying the insurance and before he became uninsurable.
Summary of this case from Moody v. New York Life Insurance CompanyOpinion
No. 31935.
November 25, 1935.
1. INSURANCE.
Statute precluding insurer from denying truth of statements contained in application for policy, unless copy of application is delivered to insured with policy, must be liberally construed for insured's benefit (Code 1930, section 5174).
2. INSURANCE.
Where employee's application for insurance was not delivered to him with insurance certificate, but was attached to master policy delivered to employer, insurer's evidence offered to contradict statements in application held properly excluded (Code 1930, section 5174).
3. INSURANCE.
In action to recover disability benefits provided for in insurance certificate issued to employee covered by master policy obtained by employer, evidence held to sustain findings against insurer.
4. EXECUTORS AND ADMINISTRATORS.
Where recovery under insurance certificate was sought only for disability benefits, right thereto vested in insured on his becoming disabled, and, where no other beneficiary was named at insured's death, his administrator was entitled to recover sum due under policy.
APPEAL from the chancery court of Clarke county; HON. A.B. AMIS, SR., Chancellor.
Jacobson Snow, of Meridian, for appellant.
The provisions of the master policy and those of the independent certificate of insurance should be construed together.
Murray v. Metropolitan Life Ins. Co., 110 So. 660.
A certificate delivered by employer to employee was no part of group insurance contract but contract consisted of policy issued to employer and application therefor.
Thull v. Equitable Life Assurance Society, 178 N.E. 850; Austin v. Metropolitan Life Ins. Co., 142 So. 337; Wann v. Metropolitan Life Ins. Co., 41 S.W.2d 51; Provident Life Accident Ins. Co. v. Nicholson, 160 S.E. 6; Severs v. Metropolitan Life Ins. Co., 230 N.Y.S. 366.
The statute, section 5174, Code of 1930, refers to policies of insurance contracted between the insured and the insurer and where the policy and/or certificate of insurance is delivered to the insured. It has no application to contracts of insurance between an employer and an insurance company with benefits flowing to an employee, where the policy contract between the employer and the insurance company is to be and is held by the employer, but, if the court should not agree with us in this, then, the employer, as in this case, holds the policy for the employee, and as his representative, and when the application is attached to the policy in the hands of the employer, the holding is tantamount to the employee himself holding the policy with the application attached thereto.
Any way this situation is viewed the moment the contract comes into the hands of the insured, an exact copy of the application attached to the policy comes along into the hands of the insured. Without this policy of insurance, with the application attached thereto, no recovery could be had because without the policy no right against appellant existed.
McGee v. Equitable Life Assurance Society, 85 A.L.R. 1457.
McCree had notice his employer had taken out a policy of insurance on his life and that the policy was in the employer's hands, the insurance subject to the terms and conditions of that policy. The statute was satisfied.
A warranty must be literally true whether material or not.
Springfield Fire Marine Ins. Co. v. Nix, 138 So. 598, 162 Miss. 669; Citizens National Life Ins. Co. v. Swords, 68 So. 920; Williams v. New York Life Ins. Co., 96 So. 97; Sovereign Camp, W.O.W., v. Sloan, 101 So. 195.
The appellant offered to prove by the witness, J.M. McCree, by the witness Dr. T.J. Barnes, by the witness, K.D. Turner, by the deposition of J.H. Whorley and by the signed statement of Thomas McCree that McCree had been sick and had been attended professionally for illness by a physician in the year 1929, one year prior to the application.
It was necessary, for the appellee to recover in this case, if recovery should be had in any event, to prove Thomas McCree became totally disabled while working for Ginsburg Kaplan.
A.G.S. Railway v. Shannon, 68 So. 165; 22 C.J. 451, par. 543.
McCree ceased to work for Ginsburg Kaplan on March 1, 1931. He went to Quitman on or about April 5, 1931, and was then ill. The intervening time was unaccounted for by the appellee.
The trial court held the surrender of the policy and the relinquishment by McCree of his rights was an attempt at rescission. In this the court erred. McCree had made a claim against appellant, but appellant denied the claim.
This suit could not be maintained by Thomas McCree's representatives. The policy does not contemplate that the benefits thereof should go to the personal or legal representative of the deceased, or to his estate, but, under the paragraph by which this claim is sought to be established, "Benefit In Event Of Permanent Total Disability Before Age 60," it is said the company "will pay the sum insured hereunder at the time such disability commenced to the insured, if living; otherwise to the beneficiary." The proof showed the beneficiary under the policy was living at the time this suit was tried and that McCree was dead. McCree's personal representative was not the proper party to bring the suit, but, if anyone was entitled to recover, it was the beneficiary.
The court states, in its opinion, that a certificate of insurance in the amount of one thousand dollars was issued and delivered to Thomas McCree. That finding of fact is not supported by the proof, but the chancellor simply held the notice, which was sent to Thomas McCree, to be a contract of insurance. This holding was erroneous. The certificate sent Thomas McCree was simply a certificate to the effect that an insurance policy had been issued covering Thomas McCree's life and the policy delivered to Ginsburg Kaplan. The certificate was not a contract of insurance and it has been so held in the following cases:
Thull v. Equitable Life Assurance Society, 178 N.E. 850; Austin v. Metropolitan Life Ins. Co., 142 So. 348; Wann v. Metropolitan Life Ins. Co., 41 S.W.2d 50; McGee v. Equitable Life Assurance Society, 85 A.L.R. 1457; Severs v. Metropolitan Life Ins. Co., 230 N.Y.S. 366.
H.F. Case, of Quitman, for appellee.
The appellant seeks by this appeal to have this court nullify section 5174 of the Code of 1930 of Mississippi or to engraft thereon some unwarranted exception or exemption to it and to reverse the prior decisions of this court with reference thereto. We submit that to reverse the chancellor in this case would mean that, nothing more or less.
This section of the code creates a rule of substantive law in fixing the rights of the parties under a policy which has been delivered to the insured without a copy of the application therefor attached thereto.
Sovereign Camp, W.O.W., v. Farmer, 77 So. 655, 116 Miss. 626.
The court in that case held that the insurer could not deny any of the statements made in the application for the insurance.
National Life Accident Ins. Co. v. Prather, 153 So. 881.
Appellant's argument based upon the foreign decisions cited by him is wholly inapplicable for the perfectly obvious reason that the Mississippi statute, section 5174, nor any similar state statute was involved in those cases.
We made the contention that the certificate or the instrument delivered to the insured evidencing the fact that his health and life was insured was such contract as was within the provisions of section 5174 of the Mississippi Code of 1930. The court sustained us in that contention, which we submit in all earnestness was eminently correct.
Appellant tries to put the learned chancellor trying this case in error for enforcing the Mississippi statute, section 5174. And insists that it had a right to go in the face of, and rough shod over, said law and undertake to establish the falsity of the statements of Thomas McCree in his application for insurance. The learned chancellor's ruling in this matter is eminently correct as we submit and clear and logical. There was no necessity for any exception to be entered to it and appellant had preserved and saved the point to it for review in this court.
Griffith's Chancery Practice, sec. 580.
It is not necessary to cite any authority that the law is that the finding of a chancellor on the disputed question of facts is equivalent to a jury verdict and will not be disturbed unless manifestly erroneous.
The chancellor having heard and considered all of the proof and being fully advised held that Thomas McCree, the insured, had been overreached, and in delivering up his certificate of insurance to appellant's agents at a time when he was sick and confined to his home with a fatal malady, from which he shortly thereafter died. That he acted in ignorance of his legal rights. That his action in surrendering the policy was induced by the false representations of appellant's agents as to his rights and therefore a court of equity would not uphold the contention of the appellant that the contract of insurance had been thereby rescinded.
9 C.J. 1169, par. 22; Powell v. Plant, 23 So. 399; Caulk v. Bert, 75 So. 369, 114 Miss. 487; Nabours v. Cocke, 24 Miss. 44; Lyon v. Sanders, 23 Miss. 530; Allen v. Luckett, 48 So. 186, 94 Miss. 868; 21 C.J. 93, par. 69; Madison Trust Co. v. Helleckson, 96 A.L.R. 1001; United Commercial Travelers v. McAdams, 125 F. 358; Inter-Southern Life Ins. Co. v. Stephenson, 246 Ky. 694, 56 S.W.2d 332; Titus v. Rochester German Ins. Co., 97 Ky. 567, 31 S.W. 127, 28 L.R.A. 478, 53 Am. St. Rep. 426; Palmeter v. Court of Honor, 212 Ill. App. 565; Henry v. Imperial Council, O.U.F., 52 N.J. Eq. 770, 29 A. 508; Mutual Life Loan Assn. v. Jackson, 76 S.W.2d 547; Berry v. American Central Ins. Co., 132 N.Y. 49, 30 N.E. 254, 28 Am. St. Rep. 548, 5 Silv. Sup. Ct. 242, 8 N.Y.S. 762.
Argued orally by H.F. Case, for appellee.
The appellee was complainant in the court below and filed a bill in the chancery court of Clarke county alleging that he was duly appointed and qualified as the administrator of the estate of Thomas McCree, deceased; that the deceased, during his lifetime, took out, with the appellant, a policy of insurance providing for the payment of one thousand dollars upon his becoming totally and permanently disabled; that said policy was issued, as appellee believes, in December, 1929, and payments thereon were all paid until October, 1931. The bill further alleged that on or about the ____ day of March, 1931, the deceased became afflicted with active pulmonary tuberculosis of the bone; that from then until the death of the deceased, on June 8, 1932, he was totally and permanently disabled, and, under the terms of the policy, he was entitled to the benefits for disability thereunder, including a payment of one thousand dollars in cash; that the appellee and the deceased complied with all the requirements of the policy, and that the appellant wholly refused to pay said sum or to perform the policy in any manner. The bill alleged that on or about October —, 1931, the appellant refused to receive further premiums from the deceased and refused to pay him the disability benefits under the policy; that on or about said date the appellant's agent Lee L. Young, while acting within the scope of his employment, entered the house of the deceased while he was weak and unable, physically and mentally, to protect his own interest, and requested to see the policy; that thereupon said agent of the appellant carried the policy away with him despite the protests of the deceased, and at a time when the appellee was not present, leaving with the deceased five dollars, which the deceased returned in the form of a post office money order, which money order appellant refused to accept and returned it to the deceased.
The appellant in its answer set up that the policy issued was issued to Thomas McCree together with a lot of other employees of a firm styled Ginsburg Kaplan by whom said Thomas McCree was employed, and the policy provided that it should not continue in force after Thomas McCree abandoned the employment of Ginsburg Kaplan, and that Thomas McCree had abandoned said employment, and that, under its terms, the policy had lapsed. It also denied the allegations in reference to its agent taking up the certificate of insurance, as alleged in the bill, but contended that Thomas McCree had in his application for insurance, misrepresented material facts which voided the policy; that, among the misrepresentations was that he had not had medical treatment within three years prior to the application, and that he was in good health.
Thomas McCree was furnished with a certificate showing that he was insured by the appellant company in the sum of one thousand dollars, and showing the rate of premiums, and quoting certain provisions of the policy. The policy, itself, was not delivered to the insured, but was placed with Ginsburg Kaplan, and is what is called a "Master Policy." A copy of the application signed by Thomas McCree was not delivered to him with the certificate showing his insurance, but a copy was attached to the "Master Policy" in the possession of Ginsburg Kaplan.
It appeared from the proof of the appellees that, after Thomas McCree became totally disabled, and presumably about the time the agent of the appellant took the certificate from said Thomas McCree, the "Master Policy" had been returned to the appellant by Ginsburg Kaplan, and that while the policy was in force, the said Thomas McCree had become unable to work and remained so until his death. It also appeared from the proof of the appellees that, while the father of Thomas McCree was away from home, the said Thomas McCree then being in his home confined to his bed, the agent of the appellant came to the home where Thomas McCree was living, and when no one was there except a sixteen year old boy left to wait upon said Thomas McCree, and said agent represented that there was an error in the application, and that they would get another application for Thomas McCree to sign; that said agent then took with him said certificate and left a five dollar bill on the bed where Thomas McCree was lying. When the appellee, the father of Thomas McCree, returned home and was informed as to what had taken place, he went to the sheriff and sought to have the agent arrested, but failed to accomplish that purpose, the agent having left the community. He then went to his attorneys for advice, and acting on their advice wrote to the insurance company at its New Orleans office, demanding the return of the certificate, and sending them a money order for the five dollars left with Thomas McCree.
The particular agent who visited the home of Thomas McCree had an office in Jackson, Mississippi, and this letter was forwarded to him, and he returned the money order to the appellee. Thereupon, suit was brought for the recovery of benefits under the policy.
The agent of the appellant who took up the certificate of insurance told a different story. He stated that at first Thomas McCree refused to deliver the certificate, but when they explained to him that on account of misrepresentations in the application for insurance he would have no interest under it, that he agreed to accept a return of premiums paid, which amounted to four dollars and ninety cents; that Thomas McCree was not confined to his bed, but was up, and was sitting upon the front porch and discussed the matter with him. The appellant offered proof to show that there had been a misrepresentation of facts, and as to the condition of the health of Thomas McCree; and that he had been attended and treated by physicians within the period of three years prior to the application, and also that under the disability benefit clause of another policy he had collected, within said period, certain sums for different weeks.
The court refused to admit the evidence of the insurance company as to these misrepresentations because the copy of the application was not attached to the certificate delivered to Thomas McCree, holding that it was not sufficient for a copy of the application to be left with the "Master Policy" held by Ginsburg Kaplan.
Section 5174, Code 1930, reads as follows: "All life insurance companies doing business in the state of Mississippi shall deliver to the insured with the policy, certificate or contract of insurance in any form a copy of the insured's application, and in default thereof said life insurance company shall not be permitted in any court of this state to deny that any of the statements in said application are true."
The chancellor held, and we think correctly, that it was the duty of the insurance company to deliver to the insured, Thomas McCree, with the certificate furnished him, a copy of his application for such insurance, to enable the insured to determine, at any time, by an inspection of his application whether there were any errors contained therein, through inadvertence or otherwise, and to correct them, or to disclose the true facts while he was carrying the insurance and before he became uninsurable. This section should be liberally construed for the benefit of the insured, and we are of the opinion that the quoted section requires the delivery of a copy of the application to the insured, and not to some third person. Therefore, there was no error on the part of the court below in refusing to admit the evidence of the insurance company contradicting statements as to the application for insurance.
There was conflict in the evidence, and the chancellor was authorized to find the facts as he did find them. We think, too, that there was sufficient evidence to support the findings of fact. The chancellor rendered a judgment for one thousand dollars and interest from date of the disability of Thomas McCree, and we think he was correct in so doing.
There was something said in the answer about the right under the policy after the death of the mother of Thomas McCree, she being the main beneficiary and dying before he did. The main beneficiary having predeceased Thomas McCree, the right under the policy accrued to him or to his administrator. In fact, however, the main beneficiary would have had no interest in the recovery herein, as it was vested in Thomas McCree on his becoming disabled, and no other beneficiary being named at his death, his administrator is entitled to recover the sum due under the policy.
We find no error in the judgment of the court below, and it is affirmed.
Affirmed.