Court Opinion

ID: 6744165
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:42:28.913358+00
Date Added: 2024-06-11T16:02:01.803029
License: Public Domain

DISSENTING OPINION
By PUNK, J.
In addition to the facts stated.in the majority opinion, and perhaps in repetition of some of them, it should be noted as follows:
On Dec. 10, 1924, the Aetna Life Insurance Co. issued to the B. P. Goodrich Co. what is known as a group policy of life insurance, by the terms of which and the application therefor, the insurance company insured the lives of such employees of the Goodrich Co. as made application for such insurance and were accepted by the insurance company.
The applications of such employees were made and sent through the Goodrich Co. to the insurance company after they had worked for the Goodrich Co. a certain period of time. A certificate was then issued to each employee that was accepted by the insurance company, showing, among other things, the amount for which such employee was insured and the name of his beneficiary. The premiums were systematically paid monthly by the Goodrich Co. to the insurance company, a part of which were retained each month from the amount due each employee.
Under the terms of the policy as originally written, if the employment of such employee was terminated during the policy month, the insurance continued to the end of that policy month within which the employment terminated.
Plaintiff’s assured was killed in an automobile accident within the policy month after he ceased to be in the employ of said Goodrich Co.
The undisputed evidence as shown by the record is that on Aug. 10, 1926, it was mutually agreed, orally, between the insurance company and the Goodrich Co., that the insurance on the life of any employee should automatically cease upon the termination of his employment, instead of at the end of that policy month in which the employment terminated, and from that time until after this action was commenced, said oral modification of the master policy was acted upon and carried out as a part of said master policy, and the Goodrich Co. paid premiums and received credits for its employees, including plaintiff’s assured, upon the basis .of that oral modification, although it was not reduced to writing and attached as a rider to the policy until Nov. 4, 1931, which was some months after the suit herein was started in the Common Pleas Court.
It thus clearly appears that the Goodrich Co. paid premiums to the insurance company for its employees according to said oral modification of the master policy for more than 2% years before the insured herein, Raymond Muncy, under the name of Edd Logan, made application for and received .his certificate of insurance, which certificate definitely stated on its face that his insurance terminated whenever he for any reason whatever ceased to be in the employ of said Goodrich Co. There is no claim that there was ever any representation to this employee or anyone else that he was insured until the end of the policy month in which his employment terminated.
It should be further noted that at the trial, plaintiff (Muncy’s beneficiary) offered in evidence the original master policy of insurance which was held by the Goodrich Co., together with all riders attached thereto, including the one dated Nov. 4, 1931,. which is in the nature of a nunc pro tunc affair, setting forth in writing the oral agreement made on Aug. 10, 1926; all of which were admitted in evidence without objection.
During 'the progress of the trial, the insurance company offered evidence to show who was present and what was said and done on Aug. 10, 1926, between the insurance company and the Goodrich Co., to make said oral modification of the master policy — to which counsel for plaintiff objected, and upon the suggestion of the court that the policy was the best evidence, the objection was sustained. The rider of Nov. 4, 1931, was thus left to stand uncontradicted, without objection, as the agreement made on Aug. 10, 1920, modifying the master policy.
Whether or not the insurance company had a right to show, by oral testimony, any oral agreement between it and the Goodrich Co. to modify the policy, or show an oral waiver of any of the written provisions of the policy, was unimportant after the rider was admitted, without objection, as the contract that had been entered into orally on Aug. 10, 1926.
The rule is well established that a written agreement may be modified by an oral agreement, and even the agreement that *396a written contract can be modified only in a particular manner, can be changed by a parol agreement.
22 O. Jur., “Insurance,” §161, pp. 316-317.
1 Couch on Insurance, §§29 and 78.
50 Oh St 549, Machine Co. v Ins Co.
22 Oh Ap 129, at p. 136, (4 Abs 767), Central Casualty Co. v Fleming.
32 Oh Ap 316, Royal Indemnity Co. v Goodman.
29 Oh St 59, Abbott, etc. v Inskip.
20 Oh St 68, Lefferson v Dallas.
3 Williston on Contracts, §1828, pp. 3147-3149.
Moreover, the right of a third person for whose benefit a promise is made, is affected with all the infirmities of the contract as between the parties to the agreement.
55 A.L.R. 1231, Myerson v New Idea Hosiery Co.
It is a recognized rule that a contract for the benefit of a third person may be modified or cancelled at any time before such third person does something in reliance upon the benefits given him by the contract. There is no claim that plaintiff or her assured did anything during his lifetime in reliance upon the terms of the master policy as originally written in contravention of its oral modification, or that he or plantiff ever knew anything about the terms of the master policy until long after his death, other than the information contained in the certificate issued to him, which is in exact accord with the terms of the oral modification of the master policy. It is fundamental that, when a contract is made for the benefit of another, he can have no greater rights under such contract than it provides.
40 Oh Ap 486 (U Abs 496) Thull v Equitable L. Assurance Society.
127 Oh St 26, Union Sav. & Loan Co. v Cook.
If the situation in the instant case had been the reverse of what it is, and the master policy had originally provided that the insurance should cease on the termination of the employment, and then orally modified by providing that it should continue- to the end of the policy month and the increased premiums had been paid and credits given on that basis for 2% years before decedent was insured under said policy, it would hardly be claimed that the insurance company would not be held liable under such oral modification to the end of the policy month; and I see no reason why the converse should not be true, in a case where the evidence is clear and undispqtgd and admitted without objection, and, as in this case, there is no claim or evidence of fraud or bad faith.
It should be further noted that it is settled that in group policies such as the one in the instant case, the contract is between the insurance company and the employer, and is sometimes designated as the master policy; that the master policy is held by the employer and that it controls as between the employee and the insurance company; that the employer holds the master policy not for but against the insurer; that the certificate issued to the employee is not a part of the contract of insurance but is only in the nature of a participating certificate or membership card, the only purpose of which is to give the employee .notice of his rights under the group policy and to furnish him evidence of such policy; and that the employer pays the premiums, and it is immaterial to the insurance company when or how or how much, if any, of the premium is collected from the employee by the employer. The policy is regarded as a favor or kindness bestowed upon the employee by the employer. Some employers do not charge the employee anything'. In the instant case the employee paid only $1 per month for $2,000 insurance. It might also be noted that the interests of the employer are with the employee and against the insurance company, and that the insurer is not responsible for the manner in which the employer imparts information concerning the policy to the employee for whom the employer is acting; and if the employer fails to do his duty and properly inform and protect the employee as to his rights under the master policy, the employee might have a cause of action against his unfaithful representative, but none against the insurance company, as such neglect is not chargeable to the insurer.
50 A.L.R. 1276, at p. 1282 et seq., Duval v Metropolitan Life Ins. Co., and annotations.
55 A.L.R. 1237, Thompson v Pacific Mills, and annotations.
63 A.L.R. 1030, Kowalski v Aetna Life Ins Co., and annotations.
Thull v Equitable L. Assurance Society, supra.
I am therefore inclined to the opinion that, applying the established rules governing group policies to the facts in the instant case, the assured and his beneficiary are bound by the oral modification of the master policy, and I thus find myself unable to concur in the judgment.