Burks v. Colonial Life & Accident Ins. Co.

• Decision Date: 30 November 1951
• Docket Number: No. 13713.,13713.
• Citation: 192 F.2d 643
• Parties: BURKS v. COLONIAL LIFE & ACCIDENT INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

192 F.2d 643 (1951)

BURKS v. COLONIAL LIFE & ACCIDENT INS. CO.

No. 13713.

United States Court of Appeals Fifth Circuit.

November 30, 1951.

Wallace Miller, Jr., Macon, Ga., John J. Flynt, Jr., Griffin, Ga., for appellant.

S. Augustus Black, Columbia, S. C., R. Lanier Anderson, Jr., Macon, Ga., for appellee.

Before HUTCHESON, Chief Judge, and BORAH, and RUSSELL, Circuit Judges.

RUSSELL, Circuit Judge.

In the trial Court both the appellant, the plaintiff, and the appellee, the defendant moved for summary judgments. In a well considered opinion, set forth in the margin,¹ the trial judge fully and fairly stated the material facts which had been developed by affidavits for the purpose of the respective motions of the parties, and, reviewing and applying the controlling law, sustained the motion of the defendant. Upon our consideration of the claims of error urged upon this appeal our conclusions both as to the controlling issues involved in Counts I, II and IV of the complaint, and as to the decisions of the Court of Appeals and the Supreme Court of Georgia which in point and principle control the decision of such issues adversely to the contentions of the appellant coincide in all material respects with those expressed by the trial court. There is consequently no necessity for any other or further exposition why the judgment of the trial Court upon these counts is correct. However, as to that portion of the opinion discussing and ruling upon the merits of the Third Count of the petition we refrain from any expression of approval or disapproval, since we find this to be unnecessary in the present case. The allegations of this count of the complaint, together with the facts, when considered in the light of the law already held properly applicable to the transaction now under review, are necessarily confined in material substance to the claim of negligence in failing to act with reasonable promptness in either accepting or rejecting the application and in notifying the plaintiff of its action. While we fully recognize and give obedience to the fundamental principle that the existence of negligence and the determination of what constitutes a "reasonable time" are generally for determination as questions of fact upon consideration of pertinent circumstances, we are nevertheless of the firm opinion that under the precise facts and circumstances of this case a finding of negligence based upon reasonable delay would not be legally supportable. The minds of reasonable men could not differ on these facts. We are therefore not required to determine, or to express it more accurately, declare, the law of Georgia which would be applicable if a factual basis for such finding existed. The Georgia Courts do not appear to have passed upon the question and, since we find at the beginning of our consideration of it the existence of an insurmountable bar to any recovery by the complainant a discussion of the legal merits, otherwise, of this claim could be only academic. We therefore refrain and, setting forth the trial Court's opinion upon this feature of the case only for the purpose of completeness of quotation, place our decision of affirmance of the ruling of the trial Court upon the third count of the complaint upon the grounds which we have stated.

Judgment affirmed.

1 "The undisputed facts of this case, as disclosed by the pleadings and the affidavits filed in connection with the motions for summary judgment here under consideration, are, as follows:

"On November 15, 1949, David Halsey Burks filed an application for an accident insurance policy with G. C. Pool, general agent of the Colonial Life and Accident Insurance Company, defendant herein, and gave said Pool a check in the amount of the first monthly premium. The application, which was signed by Burks and Pool, named the applicant's wife, plaintiff herein, as beneficiary, and it contained the following provision:

"`I further agree that this insurance shall not be in force until the application is accepted and Policy issued by the Company nor until Policy is delivered to and accepted by the applicant while in sound health and free from injury.'

"This application reached the Home Office of the Defendant Company in Columbia, S. C. on November 21. The check of the applicant was deposited to the account of the Defendant on November 25. On November 29, the application was tentatively disapproved by an employee of the Company in its Home Office. This action was reversed on November 30 or December 1 by the Vice-President and Treasurer of the Defendant Company, who placed on the application the letters `OK', followed by his initials.

"The application then went to the policy-issuing department of the Defendant Company on Friday, December 2, or Monday, December 5. The policy-issuing department does not work on Saturday or Sunday. On December 3, the applicant was killed by accidental means within the coverage of the type of policy for which he had applied. On December 5, the policy applied for was prepared, dated and countersigned. Before mailing said policy, the Defendant was informed of the applicant's death, and the policy was retained in the Home Office. On that same date, December 5, Defendant refunded to applicant's estate the sum of $10, that being the amount of the check previously deposited by the Defendant. This check was later returned to the Defendant, who has made a continuing tender of this amount. The policy, as finally prepared on December 5, did not contain a copy of the application nor seek to incorporate said application by reference thereto. Said policy contained no condition requiring delivery or acceptance but stated that the Defendant insured the applicant `from Noon, Standard Time, — of the day this policy is dated.' The policy was dated December 5, 1949.

"In addition to those undisputed facts, Plaintiff alleges and Defendant denies that G. C. Pool, general agent of the Defendant, advised the applicant, at the time of his application `that if the home office cashed check dated November 15, 1949, it would mean the company had accepted him, and his policy would be forthcoming and would be dated November 15, 1949.'

"It is further alleged that it was agreed between Pool and Burks that the check which the Defendant later deposited was payment of the policy premium for the period November 15 to December 15, and that if accepted, he would be covered during that period. Plaintiff further alleges that, prior to his death, the applicant learned that his check had been cashed, and this is not denied.

"Plaintiff, wife of the applicant, was named as beneficiary in the application. She filed this suit in four counts against the Defendant Company after Defendant refused to pay her the face amount of the policy. Defendant filed its motion for summary judgment on all counts, together with supporting affidavits. Plaintiff filed her motion for summary judgment on Counts I and IV.

"Since the aforementioned allegations concerning the representations of Pool are in dispute, should they be material to the issues involved, the pleadings and affidavits would then present a jury question.

"Count I of the Plaintiff's petition seeks specific performance of an alleged contract between Burks and the Defendant Company. Count II seeks the recovery of damages for breach of the alleged contract. Count IV asks reformation of the policy which was prepared after Burks' death, by changing the date thereof to a date prior to Burks' death, thereby making the policy effective prior to the death of the applicant. Count III seeks damages for negligence of the Defendant and, being based on an entirely different theory, it will be treated separately.

"While Counts I, II and IV differ as to remedy, all are based on an alleged contract or agreement. They can best be treated by discussing them together.

"It is a basic principle of contracts law that a contract must be based upon an offer and an acceptance thereof. The acceptance of the offer may consist of words or acts, but it must be an acceptance of the offer as made. Any acceptance on terms which do not conform with the offer is but a counter offer and itself must then be accepted before it can ripen into a contract. Maddox v. Life and Casualty Ins. Co. of Tenn., 79 Ga.App. 164, 172, 53 S.E.2d 235.

"In deciding these motions, we must first determine whether or not there could be a contract and, if so, what were the terms of the contract.

"The facts of this case reveal but one offer by the applicant, Burks. That offer is contained in his written application for a policy of insurance. If there was a contract between the parties, it must, therefore, be based upon this offer and an acceptance of it. The offer by Burks was in fact a conditional one. He offered to buy a policy of insurance upon the express condition that such policy should not be binding upon either party until issued by the Company and accepted by him while in life and good health. If this offer was ever accepted by the defendant (and the Plaintiff contends that it was accepted either by cashing of Burks' check, or by placing OK upon the application), it would give rise only to a conditional contract. Liability on such contract would, by its own terms, be conditioned upon the condition precedent stated in the applicant's own application, namely issuance of the policy and acceptance thereof by Burks while in life and good health. Reserve Loan Life Ins. Co. v. Phillips, Admr., 156 Ga. 372, 378 119 S.E. 315. At the time of the death of Burks, this condition precedent had not been satisfied. Thus, neither party was unconditionally bound by any agreement at that time. Certainly nothing happening subsequent to the death of Burks could create a contract where there was none. At the time of Burks' death the policy had not been issued or accepted. Where an application contains a condition precedent, that condition must be performed before the application can ripen into an...