Hipp v. Fidelity Mut. Life Ins. Co.

• Decision Date: 14 June 1907
• Citation: 57 S.E. 892,128 Ga. 491
• Parties: HIPP v. FIDELITY MUT. LIFE INS. CO.
• Court: Georgia Supreme Court

57 S.E. 892

128 Ga. 491

HIPP v. FIDELITY MUT. LIFE INS. CO.

Supreme Court of Georgia

June 14, 1907

Syllabus by the Court.

Where a policy of life insurance provided that the contract should not be operative or binding until the actual payment of the initial premium and delivery of the policy, the company could have insisted upon this; but if, instead, it delivered the policy, took notes for the initial premium, payable one each month for six months, and gave to the insured a receipt for the premium payable in advance, containing the clause "The above premium settled by note," this was a waiver of the payment in cash in advance, and an acceptance of the notes in lieu thereof, and the policy took effect.

Where the policy and each of the notes so taken provided that, if any obligation given for premiums should be dishonored or not paid when due, the policy should be void until duly reinstated during the lifetime and good health of the insured, in the manner prescribed, upon the failure to pay a note given for a premium the policy became void, and, if not reinstated before the death of the insured, no right of recovery upon it existed.

Although at the time when a premium note fell due the insured was sick and unable to attend business, and so remained until he died this would not prevent the policy from being forfeited from nonpayment in accordance with the express terms contained in it and in the premium note.

Where such a note was not on its face payable or to be negotiated at bank, but it was in fact sent through a bank for collection, the insured would be entitled to the entire day of maturity in which to make payment, without a forfeiture resulting from default in payment; and his right to pay would not be terminated at the close of banking hours.

Where a note on its face was made payable in a named city, and the maker added to his signature a certain address in that city presentation of the note at the address so given, in the absence of any change of address and notice thereof to the payee or holder, would be sufficient, although the maker was on that day absent from the city.

Where a brother of the insured, after banking hours, heard that such note was in the bank and went there, but found it closed, and also went to the office of the local agent of the company but found it likewise closed, such a voluntary act on his part, not as the agent of the insured, did not prevent a forfeiture, although he testified that his intention was to pay the note for the insured.

Nor would a voluntary inquiry by the brother of the insured, made at the bank several days after the maturity of the note, and after it had been dishonored and returned to the company, and an offer to then pay the local agent, suffice to reinstate the policy or prevent a forfeiture.

Where a "rider" attached to a life policy provided that upon acceptance by the company of due and satisfactory proof of the total and permanent blindness or deafness of the insured, of that he had become totally and permanently incapacitated, either by accident or bodily or mental disorder, in lieu of other benefits and advantages under the policy he should be entitled to either one of two options, but it did not appear that any such proof had been received or accepted by the company, or that either of the options had been exercised, this was not sufficient to show that the terms of the original policy had been changed and the benefits provided under either of such options had become of force.

Where one of such options was to the effect that from the date of such proof the premiums payable for the remaining years should cease or be remitted during the continuance of the incapacity, and that the insurance should be paid as an endowment at the age of 80, or at death if before that age, the fact that the insured was sick with typhoid fever when one of the premium notes fell due, and that he so remained until his death some weeks thereafter, was not alone sufficient to make the option take effect.

Where the notes given in lieu of the prepayment of the cash premium provided that if any of them was not paid at maturity, without grace, the policy should be forfeited, and there was no question as to the identity of the notes so given, or of any fraudulent purpose, the mere insertion of a pencil memorandum of the number of the policy in a blank in each of the notes left for that purpose, such insertion being made in pencil by an agent of the company after the notes were signed, did not prevent them from being introduced in evidence, or the condition for forfeiture from being enforced.

Error from Superior Court, Muscogee County; Wm. A. Little, Judge.

Action by J. M. Hipp, administrator, against the Fidelity Mutual Life Insurance Company. Judgment for defendant, and plaintiff brings error. Affirmed.

Where notes given in lieu of cash premium provided that, if any one of them was not paid at maturity, without grace, the policy should be forfeited, and there was no question as to the identity of the notes, the mere insertion of a pencil memorandum of the number of the policy in a blank in each of the notes left for that purpose, such insertion being made by an agent of the company after the notes were signed, did not prevent them from being introduced in evidence, or the condition for forfeiture from being enforced.

On May 17, 1904, the Fidelity Mutual Life Insurance Company issued a policy of insurance upon the life of Glenn H. Hipp, recited to be of Macon, Bibb county, Ga. It was made payable to his mother, or, if he survived her, to his administrators, executors, or assigns. It was declared that the contract was made for the term of six years, and renewable thereafter at the option of the insured, in consideration of the written application and the payment in advance of $67.40 upon the delivery of the policy, and the same amount thereafter at the company's head office in the city of Philadelphia upon the 17th day of May in every year until the premiums for five years had been paid, and thereafter at $100.50 each year during the continuance of the contract. One of the conditions of the policy provided that the contract should not be operative or binding until the actual payment of the initial premium and delivery of the policy during the lifetime and good health of the insured, and that "if any premium be not paid when due, or if any obligation given for premium be dishonored or not paid when due, this policy shall be void until duly reinstated during the lifetime and good health of the insured, *** or if any obligation given for the premium be dishonored or not paid when due, without grace, this policy shall be absolutely void, except as provided in the nonforfeiture clause," and "it can only be revived, if the insured be in good health, upon presentation of a reinstatement certificate signed by said insured, and upon the approval of the same by the president or vice president and medical director, but not otherwise." Attached to the policy, and forming a part thereof, was what was termed "an ordinary life elective-life rider." One of the provisions of this was as follows: "That at any time, upon acceptance of due and satisfactory proof of the total and permanent blindness or deafness of the insured thereunder, or that said insured has become totally and permanently incapacitated, either by accident or bodily or mental disorder, the said insured, in lieu of all other benefits and advantages accruing under said policy, or under its nonforfeiture provisions as modified above, shall be entitled to either of the following options: (a) From the date of said proof the premiums payable, if any, for the remaining years, shall cease or be remitted during the continuance of the incapacity, and the insurance shall be payable as an endowment at the age of 80, or at death if prior, unless extended insurance shall have previously been put in force under the nonforfeiture provisions as set forth in the first section thereof." The other option allowed was the exchange of the policy for a life annuity. the insured did not pay any premium in cash, but the policy was delivered to him, together with a receipt for such premium, and notes were given by him therefor (except that there was a slight inaccuracy in the amount). They were made payable to the maker's own order, and indorsed by him, and were payable monthly at Macon, Ga., the first falling due on June 15, 1904. These notes contained the following clause: "If this is not paid at maturity, policy No. 155,254 issued by the Fidelity Mutual Life Insurance Company of Philadelphia, for which it is given, shall be ipso facto null and void, without notice to the maker hereof, and without any act on the part of the company, and shall remain so until restored as provided by its terms." Appended to the signature to the notes was the following: "c/o M. & B. Ry." The receipt given to the insured provided that "it is understood and agreed that a protested check or past-due note or obligation of any kind is not payment, and that any obligation given in exchange for this receipt, when dishonored or not paid at maturity, shall render this receipt and policy absolutely void." When the notes were given by the insured for the premium on the policy, the number of the policy was not written in the blank space provided in the form for such number. It was inserted in pencil by one of the company's agents at its head office at the time they were received and entered of record.

The insured was taken sick about the last of May or 1st of June with typhoid fever, and died on August 7, 1904, at the home of his brother in Greenville, where he had been staying during his sickness. His mother died before he did. On June 15th, when the first note fell due, he was...