Summary
In Rothermel v. Aetna Life Ins. Co., 275 Mich. 425, 266 N.W. 404, the certificate of insurance issued to the employee provided that his insurance would cease upon termination of the employment, but the master policy, after providing that the insurance of any employee should automatically cease at the end of the policy month in which employment terminated, further provided as an exception thereto that "if any employee is * * * temporarily laid off * * * his insurance shall continue until the company receives written notice from the employer that such insurance shall terminate.
Summary of this case from Elmhorst v. Prudential Ins. Co.Opinion
Docket No. 78, Calendar No. 38,682.
Submitted January 15, 1936.
Decided April 7, 1936.
Appeal from Wayne; Campbell (Allan), J. Submitted January 15, 1936. (Docket No. 78, Calendar No. 38,682.) Decided April 7, 1936.
Assumpsit by Orlinda Rothermel against AETNA Life Insurance Company on a group life insurance certificate. Judgment for plaintiff. Defendant appeals. Affirmed.
S. Baer Keidan, for plaintiff.
Butzel, Eaman, Long, Gust Bills ( Harry F. Moll, of counsel), for defendant.
Albert Rothermel was employed by the Packard Motor Car Company which took out group insurance policies on certain of its employees with defendant and made a deduction from their pay every two weeks to apply on the premiums. Rothermel received a certificate from defendant showing that under and subject to the terms and conditions of such master policies he was entitled to disability and life insurance, the latter being in the sum of $2,000 payable, in the event of Rothermel's death, to his wife, plaintiff herein. On April 6, 1932, Rothermel was "laid off." Deductions were made from Rothermel's pay for premiums up to the end of April, 1932. He died on the 20th day of May, 1932. The certificate received by him provided that the life insurance benefits of the policy should cease upon the termination of employment or failure to pay premium contributions. He never took advantage of the conversion provisions in the policy which permitted him to take out insurance for the amount of the policy without further evidence of insurability if an application was made within 31 days after termination of employment. The crux of the instant case lies, however, not in the certificate, but in the provision found in the master policy, which reads as follows:
"The insurance of any employee shall automatically cease at the end of the policy month in which premium contribution ceases or employment terminates; except that if any employee is absent on account of sickness, or injury or is temporarily laid off, granted leave of absence, pensioned or retired, his insurance shall continue until the company receives written notice from the employer that such insurance shall terminate."
Defendant contends that the insured's rights are limited to the provisions in the certificate and that plaintiff may not rely on provisions in the group policy as they only concern defendant and motor car company. The certificate, however, as it states, was issued under and subject to the terms and conditions of the master policy. The provisions in the master policy are part of the contract of insurance and plaintiff may invoke them. All States Life Ins. Co. v. Tillman, 226 Ala. 245 ( 146 So. 393); Hardie v. Metropolitan Life Ins. Co. (Mo.App.), 7 S.W.2d 746; Thull v. Equitable Life Assurance Society, 40 Ohio App. 486 ( 178 N.E. 850); Metropolitan Life Ins. Co. v. Wann (Tex.Civ.App.), 28 S.W.2d 196; Lewis v. Metropolitan Life Ins. Co., 17 La. App. 143 ( 142 So. 721).
The insured was "temporarily laid off," within the meaning of the above quoted provision in the master policy. The evidence is positive that when Rothermel was "laid off," he was not discharged, but was only temporarily out of employment for lack of work and when the motor company had new work for him he was to come back. Under date of April 29, 1932, the motor company prepared a notice of cancellation as to a large number of employees, including Rothermel. This notice was not sent until April 30, 1932. Defendant claims Rothermel's insurance terminated on April 30, 1932, when the notice was sent to the company. However, by virtue of the above quoted provision, if the insurance company did not receive notice until the beginning of May, 1932, the insurance would remain in force until the end of such policy month. Contracts of insurance prepared by the insurance company are construed strictly against it and favorably to the insured ( Utter v. Travelers' Ins. Co., 65 Mich. 545 [8 Am. St. Rep. 913]; Ruddock v. Detroit Life Ins. Co., 209 Mich. 638) and especially so when the provisions involve forfeitures ( Lyon v. Travelers' Ins. Co. of Hartford, Conn., 55 Mich. 141, 146 [54 Am. Rep. 354]; Smith v. Independent Order of Foresters, 245 Mich. 128). The burden of proof was upon defendant to show that it received notice of cancellation in the month of April, 1932. Travelers' Ins. Co. v. Conine, 37 Ga. App. 500 ( 140 S.E. 784). In the ordinary course of business, a notice mailed on April 30, 1932, would not be delivered prior to May 1, 1932. We cannot presume that notice sent by mail on April 30th would reach defendant the same day. Defendant was in full possession of the facts, but did not see fit to produce testimony as to when it received the notice. The record is silent as to the method by which the notice was sent to defendant, the home office of which is in Hartford, Connecticut. Defendant contends that the notice may have been sent to the Detroit office of the company, but the record does not show that the company had a Detroit office. We therefore hold that Rothermel's insurance was in force during the month of May, and that the trial court was correct in rendering a judgment against defendant insurance company for the amount of the certificate with interest.
The judgment is affirmed, with costs to the plaintiff.
NORTH, C.J., and FEAD, WIEST, BUSHNELL, EDWARD M. SHARPE, POTTER, and TOY, JJ., concurred.