Murray v. Life Ins. Co. of Ga.
| Citation | 130 S.E.2d 767,107 Ga.App. 545 |
| Decision Date | 15 March 1963 |
| Docket Number | No. 39966,No. 1,39966,1 |
| Parties | Julius A. MURRAY v. LIFE INSURANCE COMPANY OF GEORGIA |
| Court | United States Court of Appeals (Georgia) |
Syllabus by the Court
A group creditors insurance policy, covering the balance of indebtedness due on outstanding loans against the death or total disability of the debtor, issued upon application by the creditor, in consideration of the creditor's payment of premiums, the proceeds of the policy being payable to the creditor, was collateral for the plaintiff's debtor's loans, furnished by the plaintiff by paying the premiums to the creditor. The legal and beneficial interest in the insurance contract being vested in the creditor, there was no right of action in the plaintiff against the defendant insurer for failure to pay either the plaintiff or his creditor on a disability claim by the plaintiff under the contract. Accordingly, the trial court did not err in sustaining the general demurrer to the petition and dismissing the action.
Julius A. Murray filed suit in the Civil Court of Fulton County against Life Insurance Company of Georgia, seeking damages allegedly arising from the defendant's failure to pay the plaintiff's claim under a group creditors insurance policy. The petition, as amended, alleged substantially as follows: Prior to December 31, 1960, The Trust Company of Georgia, as agent for the plaintiff, procured from the defendant, in consideration of the payment by plaintiff through the Trust Company of certain insurance premiums, coverage under a group creditors insurance policy, a copy of which was attached to the petition, for the balance due by the plaintiff to the Trust Company on eight notes, four of which were secured and four unsecured. Under the terms of this policy the defendant agreed to pay to the plaintiff an amount sufficient to discharge his indebtedness upon his death or total and permanent disability while thus insured. On December 31, 1960, the plaintiff sustained a bodily injury from an accidental fall at his home, resulting in total and permanent disability within the meaning of the policy. The plaintiff complied with all the conditions of the contract required of him, including notice and proof of loss, but the defendant refused to pay his claim. On August 2, 1961, as a result of the defendant's failure to pay the plaintiff's claim, the Trust Company repossessed its security, the plaintiff's automobile, and sold it under foreclosure, leaving the plaintiff without transportation. The plaintiff made demand of the defendant sixty days prior to commencement of this suit but it refused to pay either the plaintiff or his creditor, the Trust Company. The petition prays for damages of $2,688.23 (the balance due on the notes on December 31, 1960), $7.50 per day from August 2, 1960 for loss of use of the automobile, twenty-five percent penalty for bad faith, and $1,500 attorney's fees. The court sustained the general demurrer and one special demurrer to the petition as amended, dismissing the action, to which judgment the plaintiff excepts.
Smith, Kilpatrick, Cody, Rogers & McClatchey, Miles J. Alexander, Thomas B. Branch, III, Atlanta, for plaintiff in error.
J. Lon Duckworth, Jason B. Gilliland, C. D. Cothran, Jr., Atlanta, for defendant in error.
Assuming that a cause of action against this defendant exists, is there a right of action in the plaintiff against the defendant? Code § 3-108, Ga.L.1949, p. 455, provides: (Emphasis supplied) In whom is the legal interest in the contract vested and for whose benefit was the contract of insurance made? Notwithstanding the allegation of paragraph 3 of the petition as amended that 'under the terms of said policy the defendant agreed to pay to the plaintiff * * *', etc., the copy of the contract, attached as an exhibit to the petition, shows on its face that the agreement was to pay the creditor, not the plaintiff. The opening sentence of the policy begins as follows: 'Life Insurance Company of Georgia (herein called the...
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