Bankers Fidelity Life Ins. Co. v. Oliver, 39536

• Court: Georgia Court of Appeals
• Writing for the Court: HALL; BELL; FELTON; HALL; BELL; FELTON
• Citation: Bankers Fidelity Life Ins. Co. v. Oliver, 126 S.E.2d 887, 106 Ga.App. 305 (Ga. App. 1962)
• Decision Date: 13 June 1962
• Docket Number: No. 1,No. 39536,39536,1
• Parties: BANKERS FIDELITY LIFE INSURANCE COMPANY v. Alma K. OLIVER

Page 887

126 S.E.2d 887

106 Ga.App. 305

BANKERS FIDELITY LIFE INSURANCE COMPANY v. Alma K. OLIVER.

No. 39536.

Court of Appeals of Georgia, Division No. 1.

June 13, 1962.

Rehearing Denied July 11, 1962.

Syllabus by the Court

1. The law of the case by the previous decision on appeal is that the plaintiff can recover under former Code § 56-519 insurance premiums paid.

2. The evidence authorized a recovery by plaintiff for premiums paid.

3, 4. Attorneys' fees are not recoverable against a defendant in suit based upon Code § 56-519. However, interest may be allowed the plaintiff from the time the action accrued.

5. In and action for recovery of premiums based on an insurance agent's fraud in the procurement of a policy of insurance, the testimony as to statements made to witnesses other than the plaintiff concerning such policy was admissible.

The plaintiff (defendant in error) sued the defendant (plaintiff in error) for $400 she had paid to it and for which she received a 20-payment life insurance policy. The plaintiff alleged that the defendant's agents represented to her that she would receive for this sum a profit sharing contract under which she would have the right after two years to withdraw all sums deposited by her with interest of not less than 4% per annum on said sums, and with interest possibly as high as 15% per annum. Plaintiff prayed also for attorney's fees of $500, and by amendment increased the amount of attorney's fees prayed for to $1,000, on the ground that the defendant acted in bad faith and was stubbornly litigious.

The trial resulted in a verdict and judgment for a total of $400 for the plaintiff with interest at 5% from the dates she made her payments to the defendant, and $750 attorney's fees. The defendant made a motion for new trial, which it later amended to add several special grounds. The defendant made a motion for judgment notwithstanding the verdict on the grounds stated in its motion for directed verdict made at the conclusion of the evidence, which will be discussed in the opinion.

On the judgments of the court allowing plaintiff's amendment and overruling defendant's motion to strike plaintiff's allegations and prayers respecting attorney's fees; overruling its motion for new trial; and overruling its motion for judgment notwithstanding the verdict, the defendant assigns error.

Sam F. Lowe, Jr., Smith, Field, Ringel, Martin & Carr, Atlanta, for plaintiff in error.

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

Smith, Kilpatrick, Cody, Rogers & McClatchey, Devereaux F. McClatchey, Atlanta, for party at interest not party to record.

HALL, Judge.

1. When this case was previously before this court, it was decided on November 30, 1961, that the plaintiff's petition set out a cause of action under former Code § 56-519 for recovery of insurance premiums based on the agent's fraud in the procurement of the policy of insurance. Bankers Fidelity Life Ins. Co. v. Morgan, 104 Ga.App. 894, 899, 123 S.E.2d 433; Bankers Fidelity Life Ins. Co. v. Harrison, 104 Ga.App. 899, 123 S.E.2d 438; Bankers Fidelity Life Ins. Co. v. Oliver, 104 Ga.App. 902, 123 S.E.2d 440. Defendant's argument that there can be no recovery by the plaintiff under Code § 56-519 after the repeal of the statute, effective January 1, 1961, is without merit. This issue existed at the time of the former appeal; the statute had at that time been repealed. It is the law of the case by the previous decision that the plaintiff can recover as provided by that Code section. Lowe v. City of Atlanta, 194 Ga. 317, 318, 21 S.E.2d 171; Blackwell v. Southland Butane Gas Co., 95 Ga.App. 113, 97 S.E.2d 191; Lankford v. Milhollin, 201 Ga. 594, 601, 602, 40 S.E.2d 376.

The third ground of the motion for judgment notwithstanding the verdict, that the written instruments accepted and signed by the plaintiff show that the plaintiff knew and could not have been under any misapprehension as to what she was getting, was also adjudicated on the former appeal. Bankers Fidelity Life Ins. Co. v. Morgan, supra, 104 Ga.App. p. 896, 899, 123 S.E.2d 433, 437.

The second ground of the motion for judgment notwithstanding the verdict is: The evidence fails to show that the defendant's agents were authorized to make the alleged misrepresentation, and the defendant could not be liable therefor; but on the contrary the evidence shows that the agents were employed by the defendant under a written agreement only, which specifically provided that the agents had no authority to alter the terms of the company's policies, and that the agent shall not do any illegal act or violate any state insurance law. On the former appeal this court held that the purpose of former Code § 56-519 was to make the insurance companies directly liable for statements of their agents declared therein to be unlawful. 'The company cannot, merely by inserting in its contract a provision that it is not to be bound by the acts of such agents, relieve itself from the effect of the law, * * *. The petition set out a cause of action for recovery of premiums based on the agent's fraud in the procurement of the policy of insurance, * * *.' (Emphasis supplied).

2. The plaintiff's own testimony is sufficient to authorize a finding that the defendant's agents made 'false representations as to the form, nature, and character of the policy' sold to plaintiff, which is the essence of plaintiff's cause of action. Whether or not there was proof of the specific representation alleged by plaintiff, that after two years plaintiff could withdraw all sums deposited by her with interest, the evidence authorized a recovery by plaintiff for premiums paid. The first ground of defendant's motion for judgment notwithstanding the verdict, that the evidence did not prove the case presented in plaintiff's petition, and the general grounds of the motion for new trial are without merit.

3. The question whether the plaintiff can recover attorney's fees is raised by several of the assignments of error. Unless the recovery of attorney's fees is expressly authorized by a special statutory provision, the cases in which they can be recovered in this state are those within the meaning of Code § 20-1404, which provides: 'The expenses of litigation are not generally allowed as a part of the damages; but if the defendant has acted in bad faith, or has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.' The damages allowed under this code section are compensatory, not punitive or vindictive. Bowman v. Poole, 212 Ga. 261, 91 S.E.2d 770.

While on the former appeal this court stated in its opinion that Code § 56-519 'provides a statutory remedy by imposing a statutory penalty' (Bankers Fidelity Life Ins. Co. v. Morgan, supra, 104 Ga.App. p. 897, 123 S.E.2d 433), the action is in reality a 'statutory liability' and not a 'penalty' since it creates a liability in favor of individuals instead of for the public generally. Neal v. Moultrie, 12 Ga. 104, 113; John V. Farwell Co. v. Jackson Stores, 137 Ga. 174(3), 73 S.E. 13; Ham v. Robinson Co., 146 Ga. 442, 446-447, 91 S.E. 483. Attorney's fees are not recoverable against a defendant in suit based upon a 'statutory liability'. John V. Farwell Co. v. Jackson Stores, supra, 137 Ga. p. 176, 73 S.E. 13.

The plaintiff argues that by the former decision it is the law of the case that attorney's fees are recoverable, and that Code Ann. § 24-3362 (Rule 62 of the Superior Court) precludes consideration of this question at this stage of the case. This rule provides that, 'After a decision upon one or more grounds [of a motion, objection or exception], no others afterwards urged shall be heard by the court.' The decision on the general demurrer, as we have stated in Division 1, is the law of the case only as to any grounds that could have been raised against the sufficiency of the petition as a whole to state a cause of action for relief of any kind. The defendant's motion to strike plaintiff's allegations and prayers respecting attorney's fees did not go to the sufficiency of the petition as a whole to state a cause of action for relief of any kind.

The trial court erred in overruling defendant's motion to strike plaintiff's allegations and prayers and in allowing plaintiff's amendment respecting attorney's fees, in overruling grounds 2 and 4 of the motion for new trial, and in overruling the fifth ground of the motion for judgment notwithstanding the verdict. A decision on the fourth ground of the motion for judgment notwithstanding the verdict therefore becomes unnecessary.

4. Special ground 3 of the motion for new trial complains of an instruction to the jury permitting them to award interest on the premiums paid by the plaintiff, on the ground that Code § 56-519 does not provide for interest. On the former appeal this court held that the petition sets out 'a cause of action for recovery of premiums based on the agent's fraud in the procurement of the policy of insurance * * *.' Bankers Fidelity Life Ins. Co. v. Morgan, supra, 104 Ga.App. p. 899, 123 S.E.2d...