Jones v. North Carolina Mut. Life Ins. Co.
| Decision Date | 06 July 1970 |
| Docket Number | No. 44969,44969 |
| Parties | Lexie Mae JONES v. NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY. |
| Court | Georgia Court of Appeals |
Syllabus by the Court
1. In passing on a motion for summary judgment, it must affirmatively appear that there is not genuine issue of fact to be resolved, after giving the party opposing the motion the benefit of all reasonable doubts and construing all the evidence in his favor. McCarty v. National Life & Accident Ins. Co., 107 Ga.App. 178(1), 129 S.E.2d 408 and cit.; Holland v. Sanfax Corp., 106 Ga.App. 1, 126 S.E.2d 442.
2. Where the full first quarterly premium was paid while the insured was in good health the binder became effective according to its terms at the time of completion of the medical examination. The mere fact that a part of the first premium was paid at the time of taking the application and the balance shortly thereafter and prior to the effective date does not, under a reasonable construction of the terminology used, void the applicant's coverage under the binder, although the policy thereafter issued was not in fact delivered prior to the applicant's death.
This is an appeal from the grant of summary judgment to the defendant in an action for life insurance benefits. Roy Jones filled out an application for life insurance dated October 28, 1967, and received a conditional binder receipt dated October 27, 1967. He was fatally injured in an automobile collision on December 1 and died on December 2, prior to the delivery of the policy which was issued by the company under date of December 11, forwarded to the local agent, but of course never delivered. Plaintiff can recover, if at all, only under the terms of the conditional binder which reads as follows: 'If a full first premium in accordance with the published rates of the company for the form of policy applied for has been paid at the time of making such application, and such payment is indicated thereon, the insurance subject to the terms and conditions of the policy contract applied for and in use by the company at this date, shall take effect on the date hereof if non-medical or if medical examination is required, from date of completion of the examination, provided the application is completed as agreed therein and provided the applicant is on this date a risk acceptable to the company under its rules, limits and standards, on the plan, and provided further that the applicant is on this date in good health; otherwise the payment evidenced hereby shall be returned upon demand and surrender of this receipt.' (Emphasis added.) Other pertinent provisions include a statement in the application: 'If the full premium is paid in advance to an authorized agent of the company while the proposed insured is in good health and the receipt on the form attached hereto delivered to the applicant, then the liability of the company shall be as stated in such receipt.' (Emphasis supplied.) And a statement in the policy: 'If the first premium is paid in exchange for a conditional receipt on the date of the application, then this policy will become effective as provided in the conditional receipt.' (Emphasis supplied.)
There is testimony that the signing of the application and issuance of the binder were part of a simultaneous transaction, but whether on October 27 or 28 is uncertain. The application contained four payment options, of which the quarterly payment schedule of $45.40 was checked. At the same time the applicant gave the agent a check for $10.00 and the agent said: 'You're covered now; I'll get the rest later.' The balance of $35.40 was paid by an undated check which was received and cashed by the insurer on November 10.
A medical examination was required, was performed on October 30, 1967, and the insurer's physician signed a certificate of recommended risk on that date. A second urine specimen was requested and the petition alleges that the examination was completed by furnishing the specimen on November 27.
Based on these facts the defendant moved for and was granted summary judgment, and plaintiff appeals.
Charles D. Wheeler, Decatur, for appellant.
Lipshutz, Macey, Zusmann & Sikes, John M. Sikes, Jr., Atlanta, for appellee.
Headnote 1 needs no elaboration. Since the policy although issued was not delivered during the lifetime of the applicant, its provisions are immaterial (Sasser v. Coastal States Life Ins. Co., 113 Ga.App. 17, 19, 147 S.E.2d 5) and the existence of liability must depend on whether the binder was in effect on December 2, the date of death.
It is elementary that the application and the binder receipt must be construed together. Looking at both and giving to them a reasonable construction it is apparent that the insurer intended to be bound if (a) the first full premium was paid in advance (b) the insured was found to be a good risk after a medical examination and (c) that if these conditions were met, coverage would begin on the date of completion of the medical examination.
These conditions were met. The insured elected in his application to pay premiums on a quarterly basis. The company does not deny that a full quarterly premium was received by it prior to the completion of the examination. The company's medical examiner completed his examination on November 30, 1967, his report considering the applicant a 'first class risk.'
Clearly, under the stated terms and contions, the policy took effect on this date and was in effect when the insured was fatally injured on December 1, 1967.
From the record, it is clear that the company's position in offering to return the full premium, was only that the insured was not alive on the date the policy was issued by the company. This provision in the receipt was immaterial and irrelevant since the effective date of the insurance was from the 'date of completion of the examination' where a full first premium had been paid by applicant and received by the company. The company never denied that a first full premium was received prior to the medical examination and that the medical examination was completed and showed applicant an acceptable risk.
While for purposes of this motion it is established that the first full quarterly premium was received prior to the completion of the medical examination on November 27, and that the insured was in good health at that time, it is contended by the insurer that the binder did not become effective because the fact of full payment does not appear thereon. The agent could of course have amended the binder receipt by showing payment of the balance of the first full premium, but he did not in fact do so. The omission, if material, should therefore be charged to the defendant's agent and not to the applicant. But we do not consider this fact material in view of Dunn v. Abrams, 97 Ga. 762, 763, 25 S.E. 766, where it was held: 'The recital of nonpayment in the application is not conclusive as to the fact of payment, and when, as a matter of fact, it ws paid, and the company issued its regular receipt therefor, this was a compliance with the above requirement in the face of the policy and it was not invalid because of such recital in the application.' The recital of partial payment is not conclusive against the plaintiff where the full first premium was in fact paid prior to the effective date of the binder (November 27) and during the good health of the insured. Insurance contracts, like any others, are to be construed according to the manifest intention of the parties, avoiding forfeiture unless absolutely necessary. Penn Mut. Life Ins. Co. v. Childs, 65 Ga.App. 468, 16 S.E.2d 103; Atlas Assur. Co. v. Lies, 70 Ga.App. 162, 27 S.E.2d 791; Royal Exch. Assur. of London v. Thrower, 5 Cir., 240 F. 811. In Guest v. Kennesaw Life and Accident Ins. Co., 97 Ga.App. 840(3), 104 S.E.2d 633, it was held that the binder was effective although an amount less than the full first premium was paid, it being 'sufficient to cover the insured between the acceptance of the risk and delivery of the policy.' Here the full premium had been paid at the time of acceptance of the risk, and the fact that the defendant's agent did not reissue a binder receipt to reflect this fact can not be allowed to work a forfeiture against the plaintiff.
Judgment reversed.
The majority opinion begins by citing as their first authority for denying the motion for summary judgment two cases involving disputes on issues of fact. I see no relevance in these citations. It is true that because of rules governing the burden on a motion of summary judgment, this court has held that the motion is not normally an appropriate remedy in negligence c...
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