Cherokee Credit Life Ins. Co. v. Baker
| Decision Date | 24 April 1969 |
| Docket Number | No. 44401,No. 2,44401,2 |
| Citation | 119 Ga.App. 579,168 S.E.2d 171 |
| Parties | CHEROKEE CREDIT LIFE INSURANCE COMPANY v. Mrs. J. W. BAKER, Sr., Administratrix |
| Court | Georgia Court of Appeals |
Syllabus by the Court
1. (a) Insurance, including group insurance, is a matter of contract, and the language used is to be construed by giving the usual and ordinary meaning to it in arriving at the intention of the parties. If there is no ambiguity it must be construed to mean what it says.
(b) A contract of group insurance is made up of the master group policy and the certificate, which must be construed together. The certificate holder is bound by the provisions of the group policy, the certificate being evidence of coverage thereunder.
2. Contracts, including insurance policies, even when ambiguous, are for construction by the court unless, after applying all pertinent rules of construction the ambiguity remains.
3. Where the master group policy provided that the maximum liability of the company as to any one certificate holder between the ages of 61 and 65 years at the time of issue should be $5,000, the amount of its liability was not increased beyond that amount by the issuance to a man 62 years of age of certificates for a total of $10,000 insurance. The only liability of the company in connection with the excessive amount was for a return of the premiums paid therefor.
4. Where a provision appears in the master group policy that all agreements of the company must be signed by its president or secretary and that no other person could waive or alter the policy provisions, issuance by an agent of certificates in excess of the company liability under the specific terms of the policy could not increase the liability of the company beyond that provided in the policy.
On March 30, 1964, Cherokee Credit Life Insurance Company issued to the Bank of Lenox a master group credit insurance policy by and under which certificates of insurance might be issued to borrowers from the bank insuring their lives in connection with the making of loans, and which provided, inter alia:
'(a) On a level loan basis (indebtedness repayable in one sum at maturity), the insurance shall equal the amount of such loan and shall be in force for the number of months for which premiums are paid but shall not, on the effective date for the nearest birthday ages between * * * 61 and 65 years, exceed 36 months, and the amount of $5,000 for any one insured debtor * * *'
'General Provisions.
On October 20, 1967, while the master group policy was in force, J. W. Baker, Sr. negotiated a loan from the Bank of Lenox, executing to it his promissory note for $8,000, and in connection with that transaction the bank issued to him a group credit life insurance certificate in the amount of $9,000. On October 28, 1967, he negotiated another loan from the bank in the amount of $7,000, and in connection with that transaction the bank issued to him a group credit life insurance certificate in the amount of $1,000. Each of the certificates was issued under and pursuant to the master group policy and each provided, inter alia, as follows:
'Conditions of Coverage.
'Cherokee Credit Life Insurance Company hereby certifies that under and subject to the terms of a master group credit insurance policy issued to the creditor named on the reverse side (Bank of Lenox) the debtor, if he is in insurable health at the time this certificate is written, is insured for one or more of the coverages listed below, provided, however:
Applications for the certificates, signed by Mr. Baker, listed his age as being 62. These were sent in to the company, and on November 10, 1967, a communication was directed by it to the Bank of Lenox calling attention to the fact that at age 62 Mr. Baker was entitled to no more than $5,000 coverage, and a refund was enclosed for the excess premium.
Mr. Baker was killed in an automobile accident November 1, 1967, and proof of death and claim under the certificates was sent in by the bank to the company, crossing in the mail with the notification of excess coverage and premium refund.
The company issued its check for $5,000 to the bank and denied liability for any further sum. The bank accepted the $5,000 for crediting on Mr. Baker's indebtedness to it, and his widow, as temporary administratrix of his estate, made claim for an additional $5,000. When the company refused to pay, under a provision in the policy that any coverage in excess of the debt should be paid to the beneficiary or the insured's estate, and under a similar provision of Code Ann. § 56-3306(2), the administratrix filed suit to recover the additional $5,000 claimed.
After defensive pleadings were filed, both plaintiff and defendant moved for summary judgment, the plaintiff relying upon the pleadings and exhibits (the policy and certificates) and the defendant presenting additionally the deposition of Roby H. Robinson, Sr., President of the Bank of Lenox, and affidavits of Roby H. Robinson, Jr., and Mrs. Sandra Rountree, employees of the bank, and of Don K. Miller, a vice-president of the company.
Plaintiff's motion was granted and summary judgment for the $5,000 was entered in her favor, and the motion of defendant was denied. From these rulings defendant appeals.
Harris, Russell & Watkins, T. Reese Watkins, Macon, for appellant.
Reinhardt, Ireland, Whitley & Sims, Tyron Elliott, Tifton, for appellee.
1. Insurance is a matter of contract, and the language used is to be accorded its general ordinary meaning, bearing in mind that the contract is to be construed in accordance with the intention and understanding of the parties, and in construing it the court cannot go further than a fair construction of the language used will permit. North British Mercantile Ins. Co. v. Tye, 1 Ga.App. 380, 389, 58 S.E. 110. 'The contract must be construed by the words, unless there be some reason for taking the case out of this first great rule for the construction of contracts.' Roberts v. Willink, 21 Ga. 97, 103. Clay v. Phoenix Ins. Co., 97 Ga. 44, 53, 25 S.E. 417, 420. Where the contract is unambiguous, it must be construed to mean what it says. This rule applies to language limiting coverage. State Farm Mut. Auto Ins. Co. v. Sewell, 223 Ga. 31, 153 S.E.2d 432.
In construing a contract of group insurance we are to apply, additionally, the rule that the master group policy and the certificate of insurance must be construed together, for it takes both to make the contract. ...
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