Alexander v. Prudential Insurance Co. of America , 293 Mich. 522 ( 1940 )

This appeal in the nature of certiorari is from an order of the trial court of Wayne county denying motions to dismiss plaintiff's declaration.

The principal facts are not in dispute. In 1932, the Great Lakes Steel Corporation entered into an agreement with the Prudential Insurance Company of America whereby the employees of Great Lakes Steel Corporation were permitted to carry insurance under what is known as a group insurance policy. In October, 1936, Robert Alexander, an employee of the Great Lakes Steel Corporation, applied for and there was issued to him a $2,000 certificate of participation in the group policy of insurance then in force. The beneficiary named in the certificate was "Rita Alexander, wife of said employee."

July 5, 1937, Robert Alexander was killed in an automobile accident and at the time of his death all premiums had been paid and conditions named in the policy had been performed. July 8, 1937, the death benefit of $2,000 was paid by the Great Lakes Steel Corporation to Rita Alexander, the beneficiary named in the certificate, but who was not the wife of Robert Alexander.

Plaintiff, Eileen Alexander, filed an action in the circuit court of Wayne county against defendants. In December, 1938, she filed a second amended declaration in two counts: One count in assumpsit in which it is alleged that the death benefit was paid to the wrong party; and that the insurance company did not make proper inquiry and investigation as to the identity of the party to whom it paid the money. Count two of the declaration was in trespass and it was alleged that the death benefit was paid to the wrong party by the Great Lakes Steel Corporation as the agent of the Prudential Insurance Company; that the Great Lakes Steel Corporation was an agent of the insured; that the steel corporation, as agent of the insured, violated its duty as such agent; and that plaintiff suffered damages from breach of agency by the steel corporation as agent of the insured.

In March, 1939, defendants filed separate motions to dismiss plaintiff's second amended declaration upon the ground that the declaration does not state a cause of action against them. Defendant steel corporation claims there is no cause against it because, as appears in the original group contract and certificate of participation, this defendant never promised or became obligated to pay to the plaintiff any sums whatsoever, and was named as the employer and not as the insurer in the contracts. Defendant insurance company claims no cause of action against it because the action is based upon the certificate of participation in the amount of $2,000 and the group policy of insurance and defendant insurance company's liability thereunder and the claims of all persons thereunder including the beneficiary named therein have been satisfied and released. The trial court denied the motions to dismiss, and defendants appeal.

Citation of authority is unnecessary to establish the rule that when defendants filed a motion to dismiss plaintiff's declaration, the material facts alleged in said declaration are conceded to be true. An examination of the declaration discloses that the plaintiff, Eileen Alexander, is the beneficiary named in the policy of insurance issued to the deceased Robert Alexander; that the defendant insurance company issued a master group life policy to the Great Lakes Steel Corporation, employer of the deceased, said group policy bearing No. G-3706 and the certificate covering said Robert Alexander being No. 6620; that said certificate No. 6620 was for the sum of $2,000; that said certificate was payable to plaintiff, wife of decedent; that upon the death of Robert Alexander, the policy of insurance was in force; that on July 8, 1937, the insurance company paid the death benefit of $2,000 to one Rita Sutherland who was not the wife of decedent; and that said death benefit was not paid to the wife of Robert Alexander as designated in the insurance policy.

Stripped of all verbiage, the conclusion is inevitable that plaintiff's declaration is based upon the certificate of insurance No. 6620 issued to Robert Alexander and if plaintiff is to recover, it must be because of her rights under said certificate. Under such circumstances, recourse may be had to the full text of the certificate from which we find that the beneficiary named in the certificate was "Rita Alexander, wife of said employee;" and that the obligation of the insurance company was to pay $2,000 to "Beneficiary: — Rita Alexander, wife of said employee."

The general rule is that a contract must be sued upon as written; and if it does not express the true intentions of the parties a court of equity may reform it. In Van Wie v. FidelityTrust Co., 254 Mich. 108, plaintiff brought suit upon an option. In that case plaintiff was the owner of 50 shares of stock of the Stinson Aircraft Corporation and by mistake signed an option to take stock in another corporation rather than receive cash for her stock as she could have done. Plaintiff had judgment in the lower court and upon appeal we said:

"The judgment against the aircraft company cannot be sustained. The option, signed by plaintiff, called for stock and not money. The judgment calls for money and not stock. The suit is upon an obligation to pay money. The proof shows an obligation to deliver shares of stock. The option signed by plaintiff controls as long as it stands, and it stands unless and until reformed by decree in equity. Plaintiff could not sue upon the option, and, notwithstanding the option, have judgment to the contrary.

"The law court cannot reform instruments or ignore written agreements. The option had to be in writing. If the option signed by plaintiff is ignored, then no valid option was executed. If there was no valid option executed, then plaintiff has received no promise of money for her shares of stock."

Plaintiff's claim against the Great Lakes Steel Corporation is upon the theory that it was acting as agent of the beneficiary in paying the benefits to the wrong person. The only duty owing by the Great Lakes Steel Corporation was to the beneficiary named in the policy, namely, "Rita Alexander." It owed no duty to Eileen Alexander and it follows that there could be no breach of duty to plaintiff.

The contract of the insurance company was an agreement to pay Rita Alexander, wife of Robert Alexander, the sum of $2,000 upon the death of Robert Alexander. The only obligation of the insurance company was to pay the beneficiary named therein. Until the contract was reformed defendant insurance company was liable to no one other than Rita Alexander.

The motions to dismiss the declaration should have been granted. The judgment should be reversed, with costs to defendants.