Canal Ins. Co. v. Lawson
| Decision Date | 04 February 1971 |
| Docket Number | No. 1,No. 45824,45824,1 |
| Parties | CANAL INSURANCE COMPANY v. Mrs. Mary LAWSON |
| Court | Georgia Court of Appeals |
Syllabus by the Court
1. Where the insurer had received a total net yearly premium on the insured's policy from its general agent, who in turn had extended credit to an independent broker who had received from the insured an amount she erroneously advised the latter was the full yearly premium, the insurer's attempt to cancel the insurance for nonpayment of premium was ineffective.
2. Issues abandoned in the trial court will not be considered in this court.
3. The insured was not entitled to recover attorney fees under the provisions of Code § 20-1404.
The plaintiff in this declaratory judgment action, Mrs. Lawson, had for several years placed her insurance with or through the broker Crabb Insurance Agency, which in turn had placed the automobile liability coverage through W. K. Stringer Co., which represented several companies, leaving it to Stringer to select the insurer. Miss Crabb had for several years handled her liability insurance in this manner, and Stringer extended credit directly to her, billing her for totals of all unpaid premiums and crediting payments against her account without any attempt to allocate premium payments to individual insureds. Stringer, who was a general agent for the defendant, Canal Insurance Company, itself paid the yearly premium less all commissions on the Lawson policy to Canal and issued an automobile liability policy to Mrs. Lawson, dated July 15, 1968. Lawson had paid Miss Crabb $85.00 which was understood by both of them to be the full yearly premium, the same as the year before, but the charge entered against Miss Crabb was in fact $182.00 and she agreed to extend credit to the Lawsons on their promise to reimburse her any coverage. Miss Crabb deposited the check in her general business account from which she made periodic payments to Stringer of somewhat over $1,000 between July 15 and October. Her overall account was delinquent, and on September 26, Stringer Company sent out cancellation notices to various insureds, including Lawson, effective October 11, and demanded a $5.00 reinstatement fee. Lawson took the notice to Miss Crabb, who assured him that the mistake was her fault, that she had already sent the premium money in, and that they were covered by the insurance.
On January 3, 1969, Mrs. Lawson was involved in a collision in regard to which suit was subsequently filed against her. On the trial of this action which seeks to establish the validity of the policy, both sides moved for directed verdict. The court directed a verdict to the effect that the attempted cancellation of the policy was not effective, that the policy was in effect for the time stated therein, and submitted to the jury the issue of attorney fees sought by the plaintiff against the defendant on the ground of bad faith. The jury returned a verdict in accordance with the direction of the court and for $1,000 as attorney fees. The appellant insurer enumerates error on the overruling of its motions for directed verdict, judgment notwithstanding the verdict, and new trial on general and special grounds.
Rogers, Magruder & Hoyt, J. Clinton Sumner, Jr., Rome, for appellant.
Marson G. Dunaway, Jr., Rockmart, for appellee.
1. There is no dispute but that Miss Crabb first assured the Lawsons their total premium for the automobile liability insurance policy was $85.00, and that she thereafter either assumed the balance of payment herself because of the error or extended credit to them, and that she told them the total premium money had been sent in. If she is to be assumed as an independent broker to be the agent of the insured rather than the insurer, as seems necessary under Code Ann. § 56-801b(5), the case turns on her relations with Stringer & Company, the general agent of Canal Insurance Company. It is further undisputed that Stringer extended credit to Crabb and not to any of her insured clients, since its ledger sheet shows that amounts owing as well as amounts paid were kept only as totals with no effort to distinguish between the various policyholders, who appeared only as a charge or a credit on the Crabb account. But Stringer & Company went further than this-it advanced the money owing by the Crabb agency as net premiums on the various accounts. The testimony of the defendant's witness was...
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