Kesler v. Commercial Cas. Ins. Co

• Decision Date: 22 January 1929
• Parties: KESLER . v. COMMERCIAL CASUALTY INS. CO.
• Court: Georgia Court of Appeals

39 Ga.App. 197

146 S.E. 506

KESLER .

v.COMMERCIAL CASUALTY INS. CO.

Court of Appeals of Georgia,

Division No. 2.

Jan. 22, 1929.

(Syllabus by the Court.)

Error from City Court of Atlanta; Hugh M. Dorsey, Judge.

Suit by Mrs. Georgia Anna Kesler against the Commercial Casualty Insurance Company. Judgment for defendant, and plaintiff brings error. Reversed.

Bryant & Middlebrooks and E. B. Everett, Jr., all of Atlanta, for plaintiff in error.

Harold Hirsch and Welborn B. Cody, both of Atlanta, for defendant in error.

BELL, J. Mrs. Georgia Anna Kesler brought suit against Commercial Casualty Insurance Company upon a policy of insurance issued by the defendant to the plaintiff's husband, insuring him against death by accident and naming the plaintiff as the beneficiary. A general demurrer to the petition was sustained by the trial court, and the plaintiff excepted.

The material facts alleged in the petition were as follows: The insured applied for the policy on August 9, 1926, paying in advance $8 to cover the policy fee and the first monthly premium, each amounting to $4. The policy was issued and delivered on August 10, 1926, and contained the following provisions:

"Commercial Casualty Insurance Company, Newark, New Jersey (hereinafter called the company), in consideration of the policy fee of four and 00/100 dollars and the monthly premium of four and 00/100 dollars, and of the statements in the application for this policy, a copy of which is endorsed hereon and made a part of this contract, does hereby insure Philip Joner Kesler, of Miami, Fla., herein referred to as the insured, a carpenter on buildings by occupation, subject to all conditions and limitations hereinafter contained and endorsed hereon, or attached hereto, from 12 o'clock noon, standard time at the place where the insured resides on the day this contract is countersigned, until 12 o'clock noon, such standard time, of the first day of September, 1926, and for such time thereafter as the premiums paid by the insured, as herein agreed, shall maintain this policy in force.

"After two months from date of issue or reinstatement after lapse, and so long thereafter as this policy is maintained in continuous force as provided by its terms, a grace of ten days will be allowed for the payment of monthly premiums, during which ten day period the insurance hereunder, except as to the benefits granted under Part 3, shall continue in force subject otherwise to all of the terms and conditions of this policy.

"If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the company or by any of its duly authorized agents shall reinstate the policy, but only to cover accidental injury thereof sustained and such sickness as may begin more than ten days after the date of such acceptance.

"Any premium paid to the company for any period not covered by this policy will be returned upon request.

"This policy will continue in force, subject to its provisions, as long as the premium shall be paid as agreed herein, unless it is sooner terminated in accordance with its terms.

"Failure to comply with all the terms, conditions and provisions of this policy shall bar the right to recovery for any claim made hereunder."

In addition to the advance payment of $S as above referred to, the insured paid, and the company accepted on account of premiums, $4 on September 4 and $12 on October 1, 1926. The insured died from accidental cause on January 13, 1927.

It is seen from the above statement that the entire amount paid by the insured upon premiums was $20. It is the contention df the plaintiff that this amount kept the policy in force for a period of five months from date of issue, or until January 10, 1927, and that with the ten-day period of grace added the policy was good until January 20, 1927, and that, since the insured died prior to that date, the company was liable. On the other hand, it is contended by the defendant that, under the express terms of the contract, the first premium was intended to pay for insurance only until September 1, 1926, and that, after crediting the four subsequent monthly payments and allowing for the period of grace, the policy expired on January 10, 1927, three days prior to the insured's death. It is thus insisted on the part of the insurer that the policy lapsed before the happening of the event insured against, and hence that liability did not attach.

Under the contentions just stated, the sole question for determination would be whether the first premium, called a monthly premium, was intended to keep the policy in force for a full month, or merely for the space between August 10, the date of issue, and September 1 following, amounting to but twenty-one days.

The only provisions of the policy having reference to the amount of the premiums and the period of time to be covered by each respectively are in the recital of the consideration, coupled with whatever words of limitation may follow in that connection, and, in the stipulation as to grace, in which there is reference to "monthly payments." The reasonable intendment of the policy is that for monthly premiums in a certain sum the insured would be protected from month to month for as long as such premiums would maintain the policy in force. A monthly premium is such an amount as will buy insurance for a month, and, if the payment of the first premium was to cover a period of only twenty-one days, then it was not a monthly premium, and it would be a misnomer to call it such. The insistence of the defendant is in effect that the first premium, amounting to $4, although termed a monthly premium, was not intended to be such in fact. There is nothing in the policy to show that one of the later premiums, any more than the first, should pay for a month's insurance, and yet the parties evidently did not intend that even as between themselves, and for the purposes only of the particular contract, a month should not be of the usual duration, but should be reduced to a period of twenty-one days. If the "monthly" premium paid in October was good for a month's insurance, why should the monthly premium in the same amount paid in August be of a lesser value? Admittedly, for no other reason than that the policy recites that, in consideration of the payment thereof the company insured the holder (from August 10) until September 1. Is this a sufficient reason? We think not. It is noted that the policy does not state in express terms that for the initial payment the insurance was to be in force until September 1, and no longer. Such a construction would be inconsistent with the idea of a monthly payment as otherwise ex-pressed in the policy, and would make the policy self-contradictory.

Aside from the clause just mentioned, there is nothing to indicate a distinction between the value of the first and the other premiums. The period of grace clause contains a reference in general terms to "monthly premiums, " and was to become operative after two months from date of issue. Unquestionably, "two months" was intended here to mean two months, and not a month and twenty-one days; and yet it was hardly...