Arnold v. Empire Mut. Annuity & Life Ins. Co.
| Docket Number | 481. |
| Decision Date | 24 February 1908 |
| Citation | 60 S.E. 470,3 Ga.App. 685 |
| Parties | ARNOLD v. EMPIRE MUT. ANNUITY & LIFE INS. CO. |
| Court | Georgia Court of Appeals |
Syllabus by the Court.
Policies of insurance will be liberally construed in favor of the object to be accomplished, and conditions and provisos of every contract of insurance will be strictly construed against the insurer who prepares and proposes the contract. If a policy of insurance is capable of being construed in two ways, that interpretation should be placed upon it which is most favorable to the insured; and forfeitures, not being favored, the court should be "prompt to seize hold of any circumstance that indicates an election to waive a forfeiture or an agreement to do so."
[Ed Note.-For cases in point, see Cent. Dig. vol. 28, Insurance § 295.]
(a) The payment of a premium on a policy of insurance in cash may be waived by the proper officers of the insurance company, and a note or other obligation may be accepted by its duly authorized officers in lieu of a cash payment.
[Ed Note.-For cases in point, see Cent. Dig. vol. 28, Insurance § 398.]
The power to forfeit an insurance policy must be "nominated in the bond." The failure to pay a promissory note, taken in payment of an insurance policy (although it is stipulated in the note that the nonpayment of the same at maturity will avoid the policy), will not forfeit the policy where there is no condition in the policy itself providing for its forfeiture for the nonpayment of notes.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 28, Insurance, § 897.]
(a) A provision for interest in a note taken in lieu of the payment of a premium in cash supplies consideration for the delay in payment of the premium, and is to be considered as a circumstance in determining the intention of the parties.
(b) The payment of the first premium renders the contract of insurance complete. A contract of life insurance is generally a continuing contract, either during the life of the insured or for a term of years, and the payment of the annual premium (after the first premium is paid) is a condition subsequent, "the nonperformance of which may or may not, according to circumstances, work a forfeiture of the policy."
[Ed. Note.-For cases in point, see Cent. Dig. vol. 28, Insurance, §§ 231, 891-904.]
(c) Where an insurance company accepts a note for the premium, the policy will be continued of force for the same length of time as if the amount represented by the note had been paid in cash, unless the contract of insurance contains an express stipulation to the contrary, or unless, in the event of nonpayment of the note at maturity, the insurer asks a surrender of the policy and offers to surrender the note.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 28, Insurance, § 897.]
The beneficiary of an insurance policy has a vested right in the contract of insurance which cannot be diminished or affected by subsequent agreements between the insurer and the insured, which are not stipulated or provided for in the original contract. The vested right of the beneficiary is subject to be divested only in accordance with express provisions of the contract permitting a change of the beneficiary.
[Ed. Note.-or cases in point, see Cent. Dig. vol. 28, Insurance, § 1461.]
An insurance company may be estopped by the course of dealings between itself and the insured from denying the payment of a premium.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 28, Insurance, § 1057.]
A formal tender is unnecessary where express declarations are made by the party to whom money is payable that he will not accept it if tendered. The law takes one who makes such a statement at his word, and does not thereafter require the doing of a vain thing.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 45, Tender, § 6.]
Tender may be made by an agent or friend at the instance of an interested party.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 45, Tender, § 8.]
A note accepted in payment of a premium is a separate and independent transaction-an independent contract-and has no relation to the contract of insurance except as stipulated in such policy of insurance.
Error from City Court of Atlanta; H. M. Reid, Judge.
Action by Z. B. Arnold against the Empire Mutual Annuity & Life Insurance Company. Judgment for defendant, and plaintiff brings error. Reversed.
Green, Tilson & McKinney, for plaintiff in error.
Chas. A. Read and Tye, Peeples, Bryan & Jordan, for defendant in error.
The plaintiff in error brought an action on a contract of insurance issued by the defendant company on the life of her husband, Walter B. Arnold. The defendant demurred to certain portions of the petition, and its demurrer was sustained by the lower court, and exceptions pendente lite were filed to the judgment sustaining the demurrer. The case was then submitted to the judge without the intervention of a jury upon an agreed statement of facts, and a judgment was rendered finding the company not liable on the contract of insurance. Exception is taken also to this judgment.
Plaintiff's petition set out that on the 29th day of January, 1901, the Empire Mutual Annuity & Life Insurance Company issued and delivered to her husband a policy of insurance upon his life whereby said company insured the life of said Arnold for an annuity of $600, and promised upon receipt and acceptance of satisfactory proof of death of the insured to pay petitioner, during the continuance of her widowhood, said annuity of $600, and at her death or remarriage to pay the said annuity to her minor children until they may die or reach the age of 21 years. It was further alleged in the petition that the premiums, according to the terms of the policy, are payable, $187.50 cash, payable one-fourth on the 29th day of January, April, July, and October of each year, and that the policy further provides that "a grace of thirty days will be allowed in the payment of premiums hereafter due on this policy." The petition further alleged that the full annual premiums for the years 1901 and 1902 had been paid in full to the company; that on the 22d of May, 1903, the company took a note from petitioner's husband for the balance then due for the 1903 premium, the note being for $181.50, and maturing October 15, 1903, and that there had been paid upon the note on March 7, 1904, the sum of $50. It was further alleged that on the 7th of March, 1904, the company accepted from said Walter B. Arnold a note for the balance of the 1904 premium, to wit, the sum of $168.50, maturing October 1, 1904. Copies of the insurance policy and of the notes above mentioned were attached to the petition. In the tenth paragraph the petition alleged that Walter B. Arnold, the insured, was taken to his bed with typhoid fever on September 5, 1904, and was totally and permanently disabled from that date, and died October 28, 1904. The eleventh, twelfth, and thirteenth paragraphs of the petition are as follows: (11) "That after the 1st day of October, 1904, and before the death of said Arnold, a friend and neighbor of said Arnold, while said Arnold was confined to his bed and too sick to know of or attend to any business (as he was practically ill all of the time from October 1, 1904, until the date of his death), offered to pay to Wm. W. Reid, the secretary of said insurance company, all of the unpaid premiums due by said Arnold upon said policy, but the said Reid, after a conference with the other officers of said company, refused to accept the premiums on said policy." (12) "That when said above-mentioned note for $168.50 matured on October 1, 1904, said Walter B. Arnold was extremely ill, and had been forbidden by his physicians to attempt to attend to any business, and said Arnold did not know of the maturity of said note, as he was not in full possession of his mental faculties at that time or at any time from October 1, 1904, until the date of his death, by reason of said disease." (13) "That one Watterson, an employé in the cotton oil mills of which said Arnold was superintendent, knowing that said Arnold had outstanding a note or notes, for the premium upon said policy of insurance, but not knowing when said notes matured, and knowing that said Arnold's mental condition was such that he could not attend to said note and could not remember the maturity of the same, called upon one Thomas M. Calloway, an agent of said insurance company in the city of Atlanta, Georgia, authorized by said company to collect premiums for said company upon its policies of insurance, and told said Calloway of said Arnold's condition before the maturity of said note for $168.50 on October 1, 1904, and requested said Calloway to ascertain when said note matured, which the said Calloway agreed to do, and also promised the said Watterson that he would call him [Watterson] up, and notify him when said note matured, as he had agreed to do, and said Watterson was thus prevented from paying said note for said Arnold, as he would have done, had said Calloway informed him of the date of the maturity." The fourteenth paragraph stated that the petitioner was the widow of said Arnold, deceased. The fifteenth paragraph is in the following words: "Petitioner stands ready and now...
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