Bankers Fidelity Life Ins. Co. v. Morgan

• Decision Date: 17 November 1961
• Docket Number: No. 39203,No. 3,39203,3
• Citation: 123 S.E.2d 433,104 Ga.App. 894
• Parties: BANKERS FIDELITY LIFE INSURANCE COMPANY v. S. J. MORGAN
• Court: Georgia Court of Appeals

Page 433

123 S.E.2d 433

104 Ga.App. 894

BANKERS FIDELITY LIFE INSURANCE COMPANY

v. S. J. MORGAN.

No. 39203.

Court of Appeals of Georgia, Division No. 3.

Nov. 17, 1961.

Rehearing Denied Nov. 30, 1961.

Syllabus by the Court

1. The petition sufficiently alleged that the fraud of the defendant insurance company for which the plaintiff seeks redress was committed by the defendant by its authorized agents.

2. When an insurance company engaged in the business of selling life insurance policies does actually sell such a contract to the plaintiff, the fact that its agents misrepresented the nature of the contract entered into by denominating it a profit sharing contract rather than a policy of life insurance does not relieve the insurer of its liability resulting from false representations as to the nature, form and character of the policy, as against the contention that what was being purchased was not an insurance policy but some other sort of contract.

3. Under the provisions of former Code § 56-519, a person who has been induced to purchase a contract of insurance because of the false and fraudulent representations of an agent of the insurance company may, within the period of the statute of limitation, bring an action at law against it. Since this section provides a statutory remedy upon proof of the misrepresentations, with a different measure of damages from that applicable to fraud actions generally, it is not necessary for the plaintiff to prove that the statements were sufficient to sustain a common law action for deceit, nor to rescind the contract and tender back any benefits received thereunder before maintaining the action.

4. The allegations of the answer to which the general demurrer was sustained afforded no defense in view of what is here held, and were properly stricken.

The allegations of the petition brought by the plaintiff Sidney J. Morgan against the defendant Bankers Fidelity Insurance Co. are in substance that Bankers Fidelity Insurance Co., acting by and through designated agents of the defendant and another named corporation, made certain representations to the plaintiff with respect to the sale of what was termed a profit sharing contract but which in truth and fact was a twenty payment life insurance policy insuring the life of plaintif with various and sundry options provided therein. It is further alleged that each and all of the representations were made in connection with and as an inducement to persuade the plaintiff to purchase an option on a certain number of shares of the common stock of the defendant company and the purported profit sharing contract to be issued by it, which representations were alleged to be false, fraudulent, material and made with intent to deceive the plaintiff, who relied thereon to his damage in the amount of $400 premium paid on May 6, 1959, and an additional $400 paid on May 6, 1960, together with 7% interest from the date of the respective payments; and $500 was claimed as attorneys fees based upon an allegation that the defendant below had acted in bad faith from the inception of the matters complained of; had been stubbornly litigious; and had caused the plaintiff unnecessary trouble and expense in employing counsel for the purpose of filing and prosecuting the action.

The defendant filed a general demurrer to the petition which was overruled by the court. It also filed an answer denying the material allegations of the petition and by way of further answer alleged that the plaintiff had made written application for the life insurance policy, which policy was delivered to the plaintiff and a written receipt obtained therefor; that the application clearly stated that it was an application for a life insurance policy which was issued and delivered in accordance with the application; that the receipt contained the important conditions of the policy set out in plain, simple English language which in no way referred to the representations set out in the petition. Copies of the application and receipt are attached as exhibits to the answer.

It is alleged that had the plaintiff continued the payment of premiums for the period of twenty years, the policy of insurance would have returned to the plaintiff more money than had been paid into the company, while at the same time providing the minimum of $5000 of life insurance protection throughout the twenty year period, plus benefits from matured coupons left on deposit with the company.

Plaintiff accepted delivery of the policy and retained the same making payment of the first two annual premiums. The following provision appeared in large print on the back page of the policy delivered to the plaintiff:

'The Company shall not be bound by any promise or representation heretofore or hereafter made by or to any agent or person other than as above.'

The answer alleges that by accepting and retaining the policy of insurance the plaintiff ratified any alleged misrepresentations (though defendant denies any misrepresentations were made) and plaintiff is not entitled to recover on the allegations in the petition.

These recited allegations of the answer were demurred to by the plaintiff; the demurrer was sustained and the allegations stricken.

Bankers Fidelity Life Insurance Co., as plaintiff in error, assigns error upon the overruling of its demurrer to the petition and the sustaining of the demurrer to that portion of its answer referred to above.

Sam F. Lowe, Jr., Atlanta, for plaintiff in error.

Hilton & Hilton, L. H. Hilton, sylvania, for defendant in error.

CUSTER, Judge.

1. A plaintiff seeking to hold a defendant liable for the acts of its agent...