Court Opinion

ID: 5652812
Source: CourtListenerOpinion
Date Created: 2022-01-11 23:25:06.900596+00
Date Added: 2024-06-11T08:38:40.322697
License: Public Domain

SPENCE, J., Dissenting.
I dissent. The effect of the trial court’s ruling on the motion for new trial and of the majority opinion sustaining that ruling, is to declare that the evidence was insufficient to go to the jury on the issue of estoppel. I cannot agree with that declaration.
The present case differs from the ordinary case involving a single assured and a fixed premium. The action was brought upon a certificate issued under a so-called “Group Policy” and under this form of insurance the real assured, the employee, deals solely with his employer in making his contributions to the premium paid. The employee’s contributions are deducted from his salary and the premium, which is paid by the employer, varies with each payment de*270pending upon the number of employees then employed as well as other factors. It further appears that the “Group Policy” under discussion differs from the ordinary group policy in that the employees of more than one company were insured thereunder.
The evidence showed that while the original application was signed only by the Mullin-Acton Company, both the Mullin-Acton Company and the Mullin-Johnson Company were named therein as separate but affiliated corporations. At the time of making said application the Mullin-Acton Company and the Mullin-Johnson Company separately executed requests for group insurance upon the lives of their respective employees. Only one policy was issued and the original was lost. The copy first furnished by the insurer upon request showed that both companies were named as policyholders in the group policy, but the copy supplied by the insurer on the trial named only the Mullin-Acton Company as the policyholder. Nevertheless, separate statements were made out each month calculating the premiums upon the employees of each company separately and the total amount due was computed each month by adding the amount due from MullinActon Company and the amount due from the Mullin-Johnson Company. Furthermore the certificate issued to Johnson recited that the group policy had been “issued and delivered to Mullin-Johnson Company”, his employer. The evidence was therefore ample to support a finding that the original group policy named both the Mullin-Johnson Company and the Mullin-Acton Company as the policyholders.
It is conceded that the monthly premiums were paid up to the premium which fell due on January 19, 1932. It is further conceded that the last-mentioned premium was not paid and that Johnson died on February 24, 1932, being five days after the expiration of the thirty-one day period of grace allowed for payment by the terms of the policy. The insurer denied liability in the following terms: “Since the monthly premium due under this group contract as of January 19, 1932, was not paid on or before February 19, 1932, the last day of grace for its payment, the contract lapsed and became null and void in accordance with its terms.” It defended upon the same ground. The sole issue presented by this appeal is whether there was sufficient evidence to go to the jury upon the claim that the insurer was estopped to *271declare a forfeiture of the policy as to the employees of Mullin-Johnson Company.
In addition to the foregoing there was evidence to show that the total premium due on January 19, 1932, from both companies was calculated at $69.72 and that the usual statements were forwarded at that time; that Mullin-Acton Company had been in financial difficulty and was adjudicated a bankrupt on January 22, 1932; that the Mullin-Johnson Company continued to operate until some time after the death of Johnson on February 24, 1932, and that neither the employment of Johnson nor of any other employee of the MullinJohnson Company had terminated prior to Johnson’s death; that the insurer sent notices to the former employees of Mullin-Acton Company stating that their insurance was “no longer in effect” and advising them to see a representative of the insurer regarding their conversion privileges but the insurer sent no similar notices to the employees of the Mullin-Johnson Company; that Mr. Cranmer was the manager of the group insurance department of the insurer charged with the duty of writing new group insurance and “the conservation thereof”; that Mr. Benjamin was Mr. Cranmer’s assistant; that said representatives had handled the writing of the original policy and also the previous difficulty regarding the collection of a premium; that on February 9, 1932, Mr. Mullin discussed with Mr. Benjamin the question of the premium due on account of the employees of the Mullin-Johnson Company and tendered to him the sum which appeared to be due as the premium on account of the employees of that company; that Mr. Benjamin declined to accept this tender, stating that “he could not tell what the premium would be until he got the correct amount from the home office”. He further stated, “it would be necessary for them to recalculate the premiums—because the number of people that were then employed by Mullin-Johnson Company were not—did not equal the original number that were employed by both MullinActon Company and Mullin-Johnson Company”; that “the matter would have to be taken up with the home office in Sacramento” and that Mr. Mullin “would hear from him then within a short period of time”; that thereafter Mr. Mullin tried almost daily without success to reach Mr. Benjamin and Mr. Cranmer by telephone; that between February 15th, and February 17th, he reached Mr. Benjamin and asked for news from Sacramento; that Mr. Benjamin advised him *272that he had not heard from Mr. Cranmer; that the home office was upset because of the merger of Western States Life and California States Life; that Mr. Cranmer was spending most of his time in Sacramento and that the policy would be kept in force. That after the conversation with Mr. Benjamin, no new statement regarding the premium was sent to the Mullin-Johnson Company and no notice of any kind was sent to any of its employees; that Mullin-Johnson Company was at all times ready, willing and able to pay the amount due when that.amount was ascertained.
The foregoing evidence was ample to go to the jury on the issue of estoppel and, if believed by the jury as it apparently was, it was sufficient to create an estoppel against the insurer. . It will be noted that the insurer recognized the fact that it was not entitled to the full premium as it had declared that the insurance of the Mullin-Acton employees under the group policy was no longer in force by reason of the termination of their employment on January 22d. It will be further noted that the insurer recognized that the employment of the employees of the Mullin-Johnson Company had not terminated and that their insurance under the group policy remained in force as it sent no notices to said employees similar to those sent to the Mullin-Acton employees. The Mullin-Johnson Company employees had regularly made their contributions on account of the premium to their employer and said employer made a tender during the grace period of the amount which it believed to be due on account of the premium which became payable on January 19th. This tender was refused with the statement that the premium would have to be recalculated because of the changed conditions and that a corrected statement would be sent. The insurer failed to recalculate the premium or send a corrected statement within the grace period or prior to Johnson’s death. The acts and omissions of the insurer and of its representative, Mr. Benjamin, as shown by the evidence set forth, were such as to warrant the belief on the part of Mullin-Johnson Company and its employees that the insurance would be treated as in force as to said employees pending the recalculation of the premium and the sending of a corrected statement and the insurer should not be permitted to defend upon the claim that the policy was forfeited as to said employees by nonpayment of said premium. We are not here dealing with the question of the authority of a representative to waive pay*273ment or extend the time for payment of a premium, but are dealing rather with the question of what acts and omissions on the part of an insurer and its representatives will give rise to an estoppel to declare a forfeiture on the ground of nonpayment of a premium within the time provided by the policy. While no authority directly in point has been cited, the following tend to support the views expressed herein: Baumann v. Metropolitan Life Ins. Co., 144 Wis. 206 [128 N. W. 864] ; Continental Casualty Co. v. Bridges, (Tex. Civ. App.) 114 S. W. 170; United States Life Ins. Co. v. Lesser, 126 Ala. 568 [28 So. 646] ; Hawkins v. Washington Fidelity Nat. Ins. Co., 230 Mo. App. 882 [78 S. W. (2d) 543] ; Reid v. Northern Assur. Co., 63 Cal. App. 114 [218 Pac. 290] ; 10 Cal. Jur. 625 et seq.
The majority opinion proceeds upon the theory that Johnson’s employment terminated on January 22, 1932, the date when the Mullin-Aeton Company was adjudicated a bankrupt, and that thereafter Johnson was only entitled to exercise a conversion privilege which he did not do. But Johnson was not an employee of the Mullin-Acton Company. He was an employee of the Mullin-Johnson Company and that company continued to operate and Johnson continued in its employ up to the time of his death. He could not therefore have exercised the conversion privilege provided in the policy as that privilege could only be exercised “within 31 days after the actual date of termination of employment”.
The motion for new trial was granted “upon the sole ground that the court erred in denying defendant’s motion for directed verdict”. I am of the opinion that the order granting a new trial should be reversed as it cannot be sustained upon the ground which was expressly declared to be the sole ground for the granting thereof.