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Patterson v. John Hancock Mut. Life Ins. Co.

SEPTEMBER 17, 1960.




Appeal from the County Court of Winnebago county; the Hon. FRED J. KULLBERG, Judge, presiding. Judgment affirmed.


The John Hancock Mutual Life Insurance Company issued its group insurance policy to the National Lock Company of Rockford on August 8, 1940. By the provisions of this policy the employees of the Lock Company were insured in accordance with a scheduled amount of insurance set forth in the policy and the policy also provided certain benefits to an employee if the employee became totally and permanently disabled while the insurance was in effect. Thereafter the employer, National Lock Company delivered to Eugene Patterson, an employee, two certificates effective January 1, 1951. Each certified that under and subject to the terms and conditions of the Group Policy the John Hancock Mutual Life Insurance Company insured the life of Eugene Patterson. One of these certificates, designated non-contributory, evidenced that the life of Eugene Patterson was insured for the sum of $500.00 payable to Juanita Patterson, the wife of the insured. The other certificate was identical except it was designated as contributory, and the amount of insurance was $1500.00.

On August 5, 1959 the instant two count complaint was filed by Juanita Patterson seeking to recover $2000.00 under the provisions of the group policy and the certificates issued thereunder. The complaint alleged the issuance of the policy and certificates and averred that on June 20, 1956, the insured was involved in an automobile accident and as a result thereof was totally and permanently disabled while said policy was in full force and effect. Copies of the certificates issued by the Insurance Company were attached to and made a part of the complaint. By its answer the defendant denied any liability on the ground that it was not given any notice by plaintiff or by Eugene Patterson in his lifetime, that he, the insured, had became wholly disabled by bodily injury or by disease, as required by the provisions of the policy issued by the defendant. The issues made by the pleadings were submitted to the court for determination resulting in a judgment in favor of the plaintiff and against the defendant for $2000.00 and defendant appeals.

The Group Policy contained this provision:

"Permanent Total Disability Benefit. If any employee shall furnish the company with due proof that while insured under this policy and before having attained the age of 60, he has become wholly disabled by bodily injuries or disease and will be permanently, continuously and wholly prevented thereby for life from engaging in any occupation or employment for wage or profit the company will waive further payment of premium as to such employee and pay in full settlement of all obligations to him under this policy the amount of insurance in force hereunder upon his life at the time of the receipt of due proofs of such disability, in a fixed number of installments chosen by the employer from the table contained in the provision entitled `Modes of Settlement of Claims' contained on page two of said policy, the first installment to be paid immediately upon receipt of due proofs of such disability. Any installments remaining unpaid at the death of the employee shall be payable as they become due to the beneficiary designated by such employee."

The Group Policy also provided that the company would issue to the employer for delivery to each employee an individual certificate setting forth the benefits to which such employee is entitled under the Group Policy and containing the name of the beneficiary but that such certificate should not constitute a part of the Group Policy. The certificates so issued by appellant and delivered to decedent by his employer, the Lock Company contained this provision:

"Permanent Total Disability. Any employee who shall furnish the company with due proof that he has become totally disabled by injuries, sickness or disease and has been continuously prevented thereby from performing any and every duty pertaining to his occupation and presumably will during his lifetime be prevented from pursuing any occupation for wages or profit, or if he has suffered the entire and irrecoverable loss of the sight of both eyes or of the use of both hands, or of both feet, or of one hand and one foot, he shall be deemed to be totally and permanently disabled and the insurance hereunder will become available, provided such disability or loss has been sustained before attaining the age of 60."

An amendment to the group policy also provided that the insurance of any employee should automatically cease when he failed to make the required contribution for his insurance to his employer and in case of the termination of an employee's employment the death benefit should continue for a period of thirty days following the termination of employment. This paragraph stated, however, that nothing contained therein should limit or extend the Permanent Total Disability Benefit to which an employee shall become entitled under the policy.

There is no dispute about the facts in this case. Eugene Patterson, the insured, was first employed by the National Lock Company on February 2, 1948 and continued as its faithful employee until he received injuries in an automobile accident on June 20, 1956 which rendered him permanently and totally disabled. He never returned to work after the automobile accident and from that time until his death on November 16, 1957 he was unable physically and mentally to do any work of any kind or character. At the time of his death he was 56 years of age.

Immediately following the accident he was hospitalized and then confined to his home until his death. The Lock Company knew of his disability, granted him numerous leaves of absence and paid to appellant the premiums on Patterson's certificates of insurance to and including July 5, 1957. On June 28, 1957 the Lock Company terminated his employment. On that date Mr. Goding, assistant factory superintendent of the Lock Company wrote Patterson stating that the records of the company disclosed that due to an automobile accident, Patterson had been absent from his work since June 20, 1956; that during the past year Patterson's supervisor, the personnel director, and also the writer of the letter had all called upon Patterson at his home and that the company now (June 28, 1957) assumed that he was unable to return to work and that it was necessary to remove him from the payroll. With this letter a vacation pay check was enclosed.

Counsel for appellant state that the evidence discloses that Patterson ceased to be an employee of the Lock Company on June 28, 1957, that appellant's liability was limited to the insurance in force upon the life of Patterson at the time of the receipt of due proofs of such liability; that appellant never received any notice from Patterson or from anyone for him of Patterson's disability and therefore any benefits which accrued to him under the group policy ceased on June 28, 1957. Counsel insists that notice of the total and permanent disability of Patterson was a condition precedent to the recovery of any disability benefits under the group policy and that such notice was required to be given appellant by the insured during the time the insurance coverage was in effect.

Counsel for appellee insist that there is no requirement in the policy directing where notice was to be given appellant or when it was to be given and that the policy merely states that the insured must become permanently disabled while the policy is in effect and before the insured reaches the age of 60. In support of this contention counsel for appellee cite and rely upon Mosby v. Mut. Life Ins. Co. of New York, 405 Ill. 599, 92 N.E.2d 103, and insist that notice to appellant was merely a condition to enforcing payment.

The Mosby case was an action brought to recover disability income under two policies of insurance issued to the plaintiff by the ...

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