Life & Cas. Co. Of Tenn. v. Jordan
| Decision Date | 17 February 1943 |
| Docket Number | No. 29763.,29763. |
| Citation | 25 S.E.2d 103 |
| Parties | LIFE & CASUALTY CO. OF TENNESSEE v. JORDAN. |
| Court | Georgia Court of Appeals |
1. The limitation of authority of an insurance agent, which is contained in the policy only, refers to matters which occur subsequently to the issuance and delivery of the policy.
2. The test for the payment of damages and attorney's fees, under the provisions of Code, § 56-706, is whether the refusal is frivolous and unfounded.
Error from City Court of Savannah; Alex R. MacDonell, Judge.
Suit by Alice B. Jordan against the Life and Casualty Insurance Company of Tennessee, to recover on a life insurance policy. Judgment for plaintiff and defendant brings error.
Affirmed on condition of remittitur.
This is a suit on a life insurance policy. A verdict was returned in favor of the beneficiary, the widow of the insured, for the principal amount of the policy, less $1.74 balance on the first premium, together with $250 penalty and $333.33 for attorney's fees. The defendant's motion for new trial was overruled and it excepted. To the petition general and special demurrers were filed. Several amendments were offered and allowed, after which the demurrers were overruled. To this judgment exceptions pendente lite were filed and error is assigned thereon in the bill of exceptions.
Boiled down, the essence of the allegations of the petition are as follows: An agent of the insurer solicited and procured from the deceased, Oris M. Jordan, a life insurance application for $1,000, generally known as "travelers and pedestrians" insurance. At the time of the application the agent obtained 10 cents as a binder to put the policy in force. A few days subsequently, on May 13, 1941, the agent returned and requested an additional 66 cents, which the wife paid. The agent stated that this additional amount was necessary to be paid, and a receipt for 76 cents was signed by the agent therefor, made out to the insured. A few days thereafter the agent returned with the policy and handed it to the wife, whereupon she went to get the balance of the premium to pay the remainder of the first premium. She stated to the agent that she had the money and would get it and pay him. The agent replied that she need not do that, that he would go and return within a week, on Saturday, and collect the balance of the premium. He delivered the policy to the wife, who in turn delivered it to her husband on his return from work that evening. On Friday before the Saturday night at which time the agent was to return, the insured received an injury from which he died on the following Monday. The cause of the death was within the provisions of the policy. The amended petition does not allege the payment of the first premium in cash, but relies on part payment and a tender of the balance. Recovery is sought for the face of the policy, attorney's fees and penalty for bad faith. The petition had attached to it only the "face" of the policy.
The amended answer denied the material allegations of the petition as to the right of recovery, and further set up the following provisions of the policy as to payment of premium:
The amended answer further alleged that on May 13, 1941, the agent of the insurer took the application on the life of Oris M. Jordan in which his wife was named as beneficiary. Thereafter, the insurer executed and forwarded to its agent in Savannah a policy to be delivered to the insured on payment in cash, as provided in said policy, of the premium of $2.50 on or before the delivery of the policy to Oris M. Jordan; the payment of said premium being a condition precedent to said policy becoming effective. Neither the Savannah office of the defendant nor the agent of defendant had any right or authority to deliver the policy before payment in full, in cash, of the premium of $2.50. The agent of defendant carried said policy to the residence of the insured in Savannah for the purpose of delivering same to the insured on the payment in cash of the premium, the consideration of the policy. The beneficiary was then at home. She stated that her husband was not at home and she could not pay the premium. The agent stated to the beneficiary that he would bring the policy back later, but she requested him to leave the policy with her so that her husband could examine it. The agent left the policy with Mrs. Jordan so the insured could examine it, but for no other purpose. The agent did this although he knew it was contrary to the rules of the defendant and that he had no authority to do so. The agent retained the official premium receipt which was to be given the insured on payment of the premium. A few days thereafter the insured died without having paid the premium specified in the policy. The premium had never been paid to the defendant. Although the agent left the policy with Mrs. Jordan so that the insured might examine it and for no other purpose, the insurer was not notified that said policy was acceptable to the said insured.
The evidence for the plaintiff substantiated the allegations of the petition. The evidence for the defendant sustained the answer. Further, the insurer submitted testimony to the effect that the payment of the 76 cents was for another policy, on the life of the father of the beneficiary, and that this last policy was a different kind of policy, the premium on which was 38 cents per week. This policy on the life of the father of the beneficiary was applied for by the insured, the 76 cents paid for two weeks, and the policy was issued by the insurer, and forwarded to the soliciting agent who failed to deliver it.
William L. Clay, of Savannah, for plaintiff in error.
Anderson Ulmer and Aaron Kravitch, both of Savannah, for defendant in error.
1. The demurrers, general and special, the objections to evidence, the alleged errors of omission and commission regarding the charge of the court, and also the assignments of error in the general grounds of the motion for new trial, all crystallize in two issues: (a) Under the pleadings and the facts was the verdict authorized under the law? (b) If so, under the pleadings and the evidence was that portion of the verdict for the penalty and attorney's fees warranted as a matter of law?
(a) We should keep in mind that the application was not made a part of the policy. It is also well to note that the application contained no stipulation with reference to the payment of premiums or the kind of receipt to be issued, as was contained in the policy and pleaded as a defense by the insurer. This court said in Life & Casualty Ins. Co. v. Brockett, 67 Ga.App. 837, 843, 21 S.E.2d 510, 513:
While it is true that the above cases deal with imputation of knowledge to the insurance company through its soliciting agent, we feel that the same reasoning is with equal force applicable to the situation presented under the facts of this case, at least to the extent of refusing a tender of the first premium, and the kind of receipt required in the policy, and delivering the policy by the soliciting agent. In such event we do not think that the insured, in paying the first premium to the soliciting agent simultaneously with the delivery of the policy, should be held to a strict compliance contained in the policy with reference to the payment of premiums, any more so than an insurance company, by a stipulation in the policy, could relieve itself of knowledge which the agent obtained in theinception of the contract as dealt with in the cases hereinbefore cited.
Under the facts of this case, without a stipulation to the contrary in an application, the agent was authorized to deliver the policy while the insured was in good health and receive the payment of the first premium without issuing a receipt with all the formalities as prescribed in the policy only. As to subsequent premiums, the rule might be different. Therefore, if in the instant case the agent was authorized to receive the premium and deliver the policy, was he authorized to bind the insurer by a proper tender and refusal of tender of the premium? We think so.
The petition alleged that a tender was made. The answer denied it. The answer contended that the policy was left with the insured for his examination only. The jury resolved the issue in favor of the plaintiff. The court, in its charge, fairly and fully presented this issue. Let us next inquire whether there is any authority of law to sustain the validity of such tender. In Southern Life Insurance Co. v. Kemp-ton, 56 Ga. 339(3), the Supreme Court said: "The court did not err on the facts hereinbefore stated in declining to charge: 'That after the deceased had become seriously ill, it was too late for him to bind the...
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