Carruth v. Ætna Life Insurance , 157 Ga. 608 ( 1924 )

Husserl, 0. J.

(After stating the foregoing facts.) In considering the general demurrer the first question presented is whether this plaintiff can maintain the action, and the answer to this question must depend upon the relation of Ethel Harmon, the plaintiff’s decedent, to the contract. We will first review the nature of the contract. In brief, it is an agreement on the part of the .¿Etna Life Insurance Company, for a named consideration, to insure for one year a group of employees working in the mills of the Lanett Cotton Mills, whose identity is to be determined by the possession of one of a large number of “certificates” at the time that the policy may be matured by death. The policy provides for the payment of the policy to the Lanett Cotton Mills as beneficiary. But by the terms of the certificate the Lanett Cotton Mills in turn assumes the obligation to pay the full amount of the insurance to the husband or wife, father or mother, or child of the person whose life is insured, or, in default of these ndar relations, to pay such sum to her estate. What relation does the certificate bear to the policy? It cannot be assumed but that the obligation of the certificate was in the contemplation of both of the parties to the contract of insurance. The policy refers to the certificate, and the certificate refers to the policy as the basis of its issuance. In no event is any payment to be made except to the holder of a certificate. The policy and the certificate are interlocked like the Siamese twins. Contemporaneous instruments, each affecting and controlling the same subject-matter, to wit, insurance of the life of an employee of the Lanett Cotton Mills by the iEtna Life Insurance Company, the two writings may be considered as essential, indivisible parts of one contract. United it stands, divided it falls. Thus construing the rights as applicable to the plaintiff’s decedent (and all of those insured with her), the contract could not be upheld, and indeed would be void, unless it be held that all of the insured, including Ethel Harmon, had a beneficial interest in the contract between the Lanett Cotton Mills and the .¿Etna Life Insurance Company. While the Lanett Cotton Mills is named as beneficiary in the policy, Ethel Harmon (upon certain conditions which will be hereafter referred to) and, after her death, her estate, is the beneficiary in the certificate. The Lanett Cotton Mills of itself has no insurable interest in the life of Ethel Harmon, and an attempt to insure her life for its benefit would be a mere wager — a gaming contract and void and unenforceable. The insurance company promises to pay upon the life of any one of those embraced in group policy number 379 the particular sum indicated by the certificate held by the person insured. The payment is to be made to the Lanett Cotton Mills. The use of the two following words “as beneficiary” has no significance beyond a narrow technical meaning, when considered in connection with the certificate; for the certificate confines the possession of the fund to the mere duty of paying the money over to the holder of the certificate in return for the certificate, with the duty on the part of the Lanett Mills to convey this certificate to the insurance company for cancellation.

To use the language of Chief Justice Bleckley in Mobile Insurance Co. v. Coleman, 58 Ga. 251, 255, “Insurance is business, and not elaborate and expensive trifling;” and it has been held in every jurisdiction in this country that a contract of insurance prepared and proposed by an insurer, if of at all doubtful construction, is to 'be construed most strongly against the insurer. Construing the contract as a whole, it seems clear that the iEtna Life Insurance Company, subject to the conditions in the policy, undertook to insure the life of Ethel Harmon and her fellow employees, merely using the name of the Lanett Cotton Mills as beneficiary in order to protect itself, by such conditions precedent and warranties as are contained in the application, from liability where it would not have been legally bound under these warranties; and using the services of the Lanett Cotton Mills as an agency to see that the insurance money is paid to the proper persons, and that in all cases the canceled certificate, which indicated a decrease of the insurer’s risk, should be returned to the insurance company.

The legal representative of Ethel Harmon is not deprived of the right to bring this action by reason of the fact that the premium was paid by the Lanett Cotton Mills. Section 4249 of the Civil Code declares: “If there be a valid consideration for the promise, it matters not from whom it is moved; the promisee may sustain his action, though a stranger to the consideration.” . Ethel Harmon in her lifetime was the real party in interest. According to the terms of the certificate and the reasons therein stated by the Lanett Cotton Mills, there was a valid consideration for the promise. The proposal of the certificate was to insure its holder, free of cost, in return for loyal co-operation and faithful service and the continuance of that service to the Lanett Cotton Mills. The acceptance of the certificate by Ethel Harmon was acceptance of the proposal, and therefrom arose a contract capable of being enforced.

Tbe remaining assignments of error are sufficiently dealt with in the headnotes. The court erred in sustaining the demurrers and dismissing the petition.

Judgment reversed.

All the Justices concur.