Case Name: ROTHERMEL v. ÆTNA LIFE INS. CO.
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1936-04-07
Citations: 275 Mich. 425
Docket Number: Docket No. 78, Calendar No. 38,682
Parties: ROTHERMEL v. ÆTNA LIFE INS. CO.
Judges: North, C. J., and Fead, Wiest, Bushnell, Edward M. Sharpe, Potter, and Toy, JJ., concurred.
Reporter: Michigan Reports
Volume: 275
Pages: 425–429

Head Matter:
ROTHERMEL v. ÆTNA LIFE INS. CO.
1. Insurance — Group Policy Part op Employees’ Contracts.
Terms and conditions of master or group policy between employer and insurer, subject to which certificate of insurance was issued employee are part of contract of insurance which death beneficiary may invoke.
2. Same — Temporary Lay Opp — Evidence.
In action by death beneficiary under certificate of insurance, issued employee subject to group life policy, evidence held, to show employee was temporarily laid off, not discharged, within meaning of clause in master policy as to continuance of insurance.
3. Same — Construction op Policy — Continuance op Coverage— Notice op Cancellation.
Provision of group insurance policy for automatic termination of coverage of an employee at end of month in which premium contribution ceases or employment terminates, excepting where, among other cases, employee is temporarily laid off, insurance shall continue until insurer receives written notice from employer that sueh insurance shall terminate is construed as continuing insurance until end of month during which notice of cancellation was received by insurer.
i. Same — Construction op Policy — Forfeitures.
Contracts of insurance, prepared by insurer, are construed strictly against it and favorably to insured, especially as to provisions involving forfeitures.
5. Same — Burden op Proof — Notice op Cancellation.
Insurer, claiming insurance as to employee to whom certificate had been issued subject to master policy was terminated during month in which notice of cancellation was mailed by employer, has burden of showing that notice was received during that month, where master policy is construed as continuing insurance in force to end of month in which such notice of cancellation is received by insurer.
6. Same — Evidence—Presumption—Mailing.
Supreme Court will not indulge in presumption that employer’s notice of cancellation of group insurance as to employee, mailed on last day of month, reached insurer the same day so as to terminate coverage during month in which employee was temporarily laid off and notice was mailed, in the absence of testimony by defendant as to when it received the notice.
7. Same — Continuance oe Coverage — Notice oe Cancellation— Evidence.
In action by death beneficiary of employee against group insurer, judgment for plaintiff for amount of certificate with interest held, correct, where employee was temporarily laid off in one month, employer mailed notice of cancellation as to the employee to the insurer on the last day of that month, record is silent as to when insurer received such notice, and employee died during the following month, since the certificate, embracing provisions of the master policy, was then in force.
Appeal from Wayne; Campbell (Allan), J.
Submitted January 15, 1936.
(Docket No. 78, Calendar No. 38,682.)
Decided April 7, 1936.
Assumpsit by Orlinda Rotbermel against .¿Etna Life Insurance Company on a group life insurance certificate. Judgment for plaintiff. Defendant appeals.
Affirmed.
8. Baer Keida/n, for plaintiff.
Butsel, Eaman, Long, Oust $ Bills (Harry F. Moll, of counsel), for defendant.

Opinion:
Bttteel, J.
Albert Rotbermel 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 aye part of the contract of insurance and plaintiff may invoke them. All States Life Ins. Co. v. Tillman, 226 Ala. 245 (146 South. 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. Warm (Tex. Civ. App.), 28 S. W. (2d) 196; Lewis v. Metropolitan Life Ins. Co., 17 La. App. 143 (142 South. 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.