Appeal, No. 46, March T., 1952, from judgment of Court of Common Pleas of Allegheny County, April T., 1948, No. 3744, in case of Dora P. Hanaieff v. Equitable Life Assurance Society of the United States. Judgment affirmed.
Samuel J. Goldstein, for appellant.
Thomas Lewis Jones, for appellee.
Before Stern, Stearne, Bell, Chidsey and Musmanno, JJ.
OPINION BY MR. CHIEF JUSTICE HORACE STERN
Defendant Insurance Company issued to the United States Steel Corporation a group life insurance policy insuring its employes, and those of its subsidiaries, who elected to be insured thereunder.
Nikita Prewalla was an employe of Carnegie-Illinois Steel Company, a subsidiary of the United States Steel Corporation, and there was issued to him an individual
certificate under the policy, the amount of his coverage being $2,500 in October 1946. The beneficiary named was the plaintiff, Dora P. Hanaieff. On October 19, 1946 Prewalla became ill, was totally and continuously disabled thereafter, and never again resumed work; he died on January 4, 1948.
Under the practice and rules of the employer an employe's monthly contribution toward the insurance premium was deducted from the first pay each month for the premium due the following month; accordingly, the premium due for November, 1946 had been deducted from the first pay due Prewalla in October, 1946. Under these same rules, when an employe had no wages due on the first day from which his contribution could be deducted, he was required, if he wished to continue his insurance coverage, to make his premium contribution in cash before the end of the month for which a premium had already been paid. On November 26, 1946 Prewalla sent a relative, one Evans, to the plant with instructions to pay the premiums due for the months of December, 1946, January and February, 1947. Evans was told by the clerk that only one month's premium could be accepted, so he paid for the month of December, 1946. On December 15 he returned for the purpose of paying the following month's premium, but he was then informed that, because of Prewalla's absence from his active employment for a period in excess of 30 days, it would be necessary that a medical statement in regard to his disability be presented; such a certificate was never furnished. The Carnegie-Illinois Steel Company noted on its records that Prewalla's insurance was terminated as of December 31, 1946 for non-payment of premium contribution, and also that his employment was terminated as of January 9, 1947 because of absence from the plant for over 30 days "for cause unknown".
The group insurance plan of Carnegie-Illinois Steel Company was operated on a "self-accounting" basis whereby the individual records were maintained by the employer, who collected the premium contributions, paid the premiums to the Insurance Company, and maintained the individual records of the employes. The policy provided that "The insurance of any employee shall automatically cease upon the occurrence of any of the following events: ... (b) the cessation of premium payments on account of such employee's insurance hereunder, (c) the thirty-first day following the termination of his employment.... Cessation of active work by an employee shall be deemed to constitute the termination of his employment except that an employee absent from work because of disability due to injury or sickness... will, subject to the continuance of premium payments on account of such employee's insurance, be regarded as still in the employment of the employer during the period of such disability... until the effective date of the discontinuance of such employee's insurance as entered on the employer's records,...." There was a further provision that, although the insurance upon the life of an employe was automatically to cease upon the thirty-first day following the termination of his employment, if the employment ...