Opinion
No. 33022.
February 21, 1938. Suggestion of Error Overruled April 4, 1938.
1. INSURANCE.
An employer has such an insurable interest in his employees' welfare that he may take out insurance to indemnify himself against any loss resulting from his liability for injuries to employees.
2. INSURANCE.
The custom of employers to provide medical attention for injured employees and to provide burial in case of death, regardless of employers' liability for injury or death, gives employers such an insurable interest in their employees that they may take out insurance for injuries to their employees for which they are not liable.
3. INSURANCE.
The question of whether employer who had taken out separate accident policies for each of his employees covering accidents for which he was liable, and also those for which he was not liable, had an insurable interest, could be raised only by insurer, and not by employer in suit for premiums.
APPEAL from the circuit court of Monroe county. HON. THOS. H. JOHNSON, Judge.
Thos. J. Tubb, of West Point, for appellant.
As in the case of contracts generally, it is essential to the creation of a contract of insurance that there be an offer or proposal by one party and an acceptance by the other. The agreement is usually effected by an offer or application by insured and acceptance by the company or else by the tender of a policy by the company and its acceptance by insured.
32 C.J., page 1102, sections 187 and 188; Wheelock v. Clark, 21 Wyo. 300, 131 P. 35, Ann. Cas. 1916A 956.
To constitute an insurance contract, the minds of the parties must meet as to the terms of the contract.
Scottish Union Nat. Life Ins. Co. v. Warren Gee Lbr. Co., 80 So. 9; Ins. Co. v. Lbr. Co., 94 Miss. 159, 47 So. 551; Ins. Co. v. Wylie, 110 Miss. 681, 70 So. 835; Ins. Co. v. Alexander, 12 So. 25; Ins. Co. v. McIntosh, 86 Miss. 236, 38 So. 775.
There is no proof in this record that appellee had authority to bind the association to make substitutions of insureds in the policy issued, although appellee agreed that the association would do this. This made the whole matter merely a proposition from appellant to the association to take the insurance with such a provision as a part of the contract. The agreement of the association to make substitutions was a material part of the offered contract, and which, under the uncontradicted proof here, was never accepted by the association and was not incorporated into the issued policies.
There can be no question but that appellee did not act in good faith in his dealings with the appellant, when he forged or caused to be forged the applications of the employees of appellant for the insurance policies. If the answers in the applications were false, the association would certainly deny liability in case of loss under the policies issued. Because of this fraud, the appellee cannot recover in the case.
Hoke v. National Life Acc. Ins. Co., 103 Miss. 269, 60 So. 218.
The contracts of insurance issued were void as against public policy, the appellant having no insurable interest in his employees and the contract being a wagering contract and there was no consideration for the check in question and appellee cannot recover thereon.
National Life Acc. Ins. Co. v. Ball, 127 So. 268.
In order that an individual employer may have an insurable interest in the life of an employee it must appear that his continued employment is necessary to the profitable operation of the work in which he is engaged and that his death would result in substantial loss to the employer.
37 C.J. 397, sec. 65.
The rule seems to be that the only insurable interest of the appellant in his employees is to take insurance upon his employees to indemnify himself against such loss as he may incur because of his negligence, i.e., losses for which he is legally liable. All insurance upon the employees of appellant in excess of this interest is pure wager or gambling, such that it would be financially beneficial to appellant for his employees to be accidentally injured or killed in the absence of negligence on his part. Therefore, the insurance contract was void and there was no consideration for the check here sued on and appellee cannot recover the amount of said check.
1 C.J. 407, sec. 12.
Watkins Eager, of Jackson, for appellee.
This court, ever since the adoption of the statute now incorporated into the Code of 1930 as Section 5196, but which first appearing in the Code of 1880 as Section 1086, has always held that a general agent such as the appellee, Pigford, was in this particular case, during the negotiations leading up to the consummation of the contract, was the alter ego of the company and could make contracts and bind the company as he saw fit.
Ins. Co. v. Sheffy, 71 Miss. 919; Ins. Co. v. Gibson, 72 Miss. 58; Mitchell v. Miss. Home Ins. Co., 72 Miss. 53; Liverpool, etc., Ins. Co. v. Lbr. Co., 72 Miss. 535; Fire Ins. Co. v. Bank, 73 Miss. 469, 18 So. 931; Western Assurance Co. v. Phelps, 77 Miss. 625; Fire Ins. Co. v. Randle, 81 Miss. 720, 33 So. 500; Home Ins. Co. v. Stevens, 93 Miss. 439, 46 So. 245; Fire Assn. v. Stein, 88 Miss. 499, 41 So. 66; Germania Life Ins. Co. v. Bouldin, 100 Miss. 660, 56 So. 609; Scottish Union Fire Ins. Co. v. Wylie, 110 Miss. 681, 70 So. 835; Franklin Fire Ins. Co. v. Franks, 145 Miss. 494, 111 So. 195; Lamar Life Ins. Co. v. Kemp, 154 Miss. 890, 124 So. 62; Interstate Life Ins. Co. v. Ruble, 160 Miss. 206, 133 So. 223; Capital Paint Glass Co. v. St. Paul Mercury Ind. Co., 176 So. 729.
The appellant in this case can not take advantage of the fact that the applications were filled in by the company's agent, for the reason that the company would have forever been estopped to claim any benefit by reason of any misstatement made in the application. This court has always held that where an agent attempts to fill in the application for insurance himself, that the company is forever estopped to deny the truthfulness of the answer contained in the application.
American Ins. Co. v. Mahoney, 22 L.Ed. 593, 21 Wall. 152, 56 Miss. 180; Mutual Reserve Ins. Co. v. Ogletree, 77 Miss. 7; Fraternal Union v. Whitehead, 125 Miss. 153, 87 So. 452; Fidelity Cas. Co. v. Cross, 131 Miss. 632, 95 So. 631; Home Ins. Co. v. Thornhill, 165 Miss. 787, 144 So. 861.
It is, therefore, apparent that the filling in of the applications by the company's agent did not constitute a fraud on the appellant in any sense of the word, but did forever estop the company from defending any litigation denying any liability because of any misstatement in any application.
Cooperative Oil Co. v. Greenwood Agency Co., 148 Miss. 536, 114 So. 397; Dowling v. White Lbr. Co., 170 Miss. 267, 154 So. 703.
In the first place, no charges of fraud on the part of the appellee were made in the pleadings. Second, the proof is not sufficient in this case to support a charge of fraud; and third, the jury were not of the opinion that any fraud had been perpetrated upon appellant, for their verdict is in favor of the appellee.
Carter v. Eastman-Gardner Co., 48 So. 615, 95 Miss. 651; Willoughby v. Pope, 58 So. 705, 101 Miss. 808; Metropolitan Life Ins. Co. v. Hall, 118 So. 826, 152 Miss. 413; Columbian Life Ins. Co. v. Harrison, 154 So. 722, 170 Miss. 121.
We admit, if Your Honors please, that the question of whether or not an employer has an insurable interest in his employees, who are common laborers, to the extent that he can take out insurance on their lives without their knowledge or consent, is a debatable question, and we find that the authorities are about equally divided on the proposition.
We respectfully submit, however, that the authority cited by appellant, being 1 C.J. 407, supports the contention of the appellee in this case that the appellant had an insurable interest in his employees, not for the purpose necessarily of taking out a life insurance policy, but for the purpose of taking out a policy indemnifying the beneficiary employer against accidents only.
We again call Your Honors' attention, however, to the fact that this contract was approved before being entered into by both the appellant and his attorney, and we ask at this stage what right the appellant has to question the validity of the policy which he and his attorney previously approved and applied for. We respectfully submit that the appellant is estopped to take advantage of the fact, if it be a fact, that appellant had no insurable interest in his employees. In other words, it is the appellee's contention that this is a question which the appellant has no right to raise, but which can only be raised by the Mutual Benefit Health Accident Association or the insurance company, when confronted with a claim.
1 Couch's Cyclopedia of Insurance Law, page 772, sec. 295; Farwell v. Johnson, 201 N.Y.S. 327; Keckley v. Coshocton Glass Co., 99 N.E. 299; Pierce v. Metropolitan Life Ins. Co., 46 Ohio App. 36, 187 N.E. 77.
Jesse P. Stennis, of Macon, for appellee.
We submit that as to whether or not appellee agreed to furnish appellant clerical help or an adjustor is immaterial and irrelevant for the reason that appellant, so far as the record is concerned, never had any need for such clerical help or adjustor, but, on the contrary, stated himself that he had never had any claims to arise under the policies, and, this being true, the question as to whether or not appellee agreed to furnish such help is immaterial and irrevelant and the exclusion by the court of testimony pertaining to such agreement constitutes harmless error.
3 Am. Jurisprudence page 587, sec. 1031; Jackson v. Jackson, 28 Miss. 683.
Appellant's contention that appellee cannot recover because there were no formal applications signed by appellant's employees insured under the 191 policies is without merit. The applications were for the benefit of the insurance company, and if the company through its state manager, Harry Carlisle, saw fit to waive the filing of a formal application, appellant cannot complain thereof. If any fraud was practiced in the filing of the application, and we respectfully submit that there was none, the fraud was perpetrated by the insurance company's own state manager in the insurance company's state office at Jackson, Mississippi, and did not effect the interests of either appellant or his 191 employees.
Appellant's defense in the lower court, where he was defendant, and his defense in this court have been entirely technical. He never objected to the form of the insurance, but, on the contrary, he and his attorney both approved the insurance policies, after having read and considered them for several days, and we respectfully submit that the appellant had every opportunity to decline this insurance before it was actually put into force and effect by appellee, Pigford; and in the lower court appellant was given every opportunity to present his defense before a jury of his own choosing in his own home county, and this jury, by its verdict, has said that appellant's defense was not a fair and just one, and we respectfully submit that the judgment of the lower court should be sustained.
In view of the verdict upon the issues of fact, we find that the only question requiring discussion is whether appellant had such an insurable interest in his employees as would make the policies here in issue valid. Appellant employed 191 workmen, and, instead of the ordinary plan of indemnity insurance against liability for injuries to them, appellant took 191 separate accident insurance policies, one for each of said employees, the policies being payable to appellant and not to the respective employees. Appellant paid, or rather agreed to pay, all the premiums.
Appellant says that these policies secured payments to him whether he was liable for the injuries or not; that, although a death or injury occurred by accident without any negligence whatever on the part of the employer, so that he would not be liable therefor, nevertheless the employer would receive the insurance money, and that it would be to the interest of the employer that accidents should occur rather than that they should not. Wherefore appellant says that he had no insurable interest as to accidents for which he was not legally liable and that such policies are void as against public policy; and that, being void, the premium for which he is sued by the assignee insurance agent is not a valid obligation.
It is conceded that an employer who is liable to an employee, in the event of injury to the latter, has such an insurable interest in the welfare of the employee as enables the employer to take out insurance to indemnify himself from any loss through such liability; and the remaining question is, therefore, whether he has any such interest in an ordinary employee as to enable him to take out insurance for injuries to such employees for which he is not liable. It is further conceded in the argument that the question last stated is debatable and that the authorities are divided upon it.
Under conditions and practices which appertained in former days, the question would perhaps have been answered by most of the courts in the negative. But in this day and under modern and more enlightened practices, employers do not throw injured employees to the dogs when the employer has no liability for the injury. Employers do not first stop to inquire whether they are legally liable for the injury, but, at their own expense, or largely so, they take the injured employee to a hospital, or otherwise furnish all necessary and suitable care and attention, for such reasonable time as is required, and, if death results, a decent burial is provided — all this although the employer is not legally liable at all. This is sufficient as a foundation for an insurable interest, aside from the consideration, as to which we express no opinion whether sufficient or not, that the employer has a substantial interest in keeping all his workmen together without the disruption which follows upon injuries even to the most humble of them. If a particular insured employer does not follow the custom or practice above mentioned, or in a particular case neglects or refuses, the insurer can raise for decision the point of want of insurable interest, since, according to the authorities, that point is available only to the insurer, and not to other parties. 1 Couch's Cyclopedia of Insurance Law, p. 772, sec. 295; 32 C.J., p. 1112; Farwell v. Johnson, 121 Misc. 556, 201 N.Y.S. 327, 330; Keckley v. Coshocton Glass Co., 86 Ohio St. 213, 99 N.E. 299, Ann. Cas. 1913d 607; Chicago Title Trust Co. v. Haxtun, 129 Ill. App.? 626; Langford v. Freeman, 60 Ind. 46, 55.
Affirmed.