Lucas v. Continental Cas. Co., 44749

• Citation: 120 Ga.App. 457,170 S.E.2d 856
• Decision Date: 24 September 1969
• Docket Number: No. 44749,No. 2,44749,2
• Parties: J. V. LUCAS, Sr. v. CONTINENTAL CASUALTY COMPANY et al
• Court: United States Court of Appeals (Georgia)

Page 856

170 S.E.2d 856

120 Ga.App. 457

J. V. LUCAS, Sr. v. CONTINENTAL CASUALTY COMPANY et al.

No. 44749.

Court of Appeals of Georgia, Division No. 2.

Sept. 24, 1969.

Rehearing Denied Oct. 9, 1969.

Certiorari Granted Dec. 4, 1969.

F. Robert Raley, Macon, for appellant.

Jones, Cork, Miller & Benton, James M. Thomas, Macon, for appellees.

Syllabus Opinion by the Court

DEEN, Judge.

1. 'Proof of . . . an admission by a party opponent has a value beyond that of its use for impeachment purposes; it is evidence upon which a verdict may be based.' Sims v. Hoff, 106 Ga.App. 626, 629, 127 S.E.2d 679, 682. The rule applies to admissions in pleadings which, after having been withdrawn or stricken by the pleader, are introduced in evidence by the opposite party. Wood v. Claxton, 199 Ga. 809, 35 S.E.2d 455; Bynes v. Stafford, 106 Ga.App. 406, 408, 127 S.E.2d 159; Bunn v. Atlantic Coast Line R. Co., 18 Ga.App. 66(2), 88 S.E. 798. In the present case Lucas sued Continental Casualty Company for benefits claimed by reason of disability following a heart attack under a certificate of insurance held by him under a master policy issued by the defendant company to 'Associates Investment Company and Subsidiaries including Associates Discount Corp., South Bend, Indiana.' Lucas had purchased the insurance at the time he bought an automobile from Barney A. Smith Motors, Inc., who handled the health and accident insurance certificates for Associates Discount Corp. as creditor insurance, the proceeds being payable to the latter as its interest appeared. The defendant insurance company filed a third party complaint against Barney A. Smith Motors, Inc., alleging that thelatter acted as its agent in writing the certificate of insurance upon which Lucas' case is based; that it was informed at the time by the plaintiff that he was suffering from a heart condition, and that in violation of the limits of its authority as such agent it nevertheless assured him that he was adequately covered by the certificate of insurance; that when an agent exceeds the limitations on his authority and the principal is bound thereby the agent becomes liable over to the principal, and that accordingly Barney A. Smith Motors, Inc., would be liable over to the defendant insurer for any judgment entered against the latter. This pleading was subsequently stricken, but it is nevertheless sufficient, when put in evidence, to create a question of fact on the authority of Barney A. Smith Motors, Inc., to act as agent for the defendant in issuing the insurance certificate.

2. On the defendant's motion for summary judgment it is undisputed that the question of Lucas' heart condition was discussed. Fuller, the car salesman, testified that Lucas told him he had a heart condition and asked if he would still write the insurance. Lucas said he further told him that he had had a heart attack and said 'If I was to get disabled to work I might lose my car and everything I put in it', and the salesman said, 'Oh, we can fix that.' He then talked by telephone to Smith, the employer, who deposed that Fuller 'possibly did mention some existing heart trouble' to him. The plaintiff was then assured of coverage and insurance was purchased and paid for. Neither Lucas nor Fuller ever saw the master policy, which was in South Bend, Indiana, and Lucas testified that he did not fill out any application or see the certificate but that one was mailed to him some time later. Both the policy and the certificate contain a statement: 'Disability resulting from an accident occurring or from a sickness or disease existing prior to the effective date of the policy as to the insured debtor is not covered.' The policy but not the certificate contains the following: 'No agent has authority to change this policy or waive any of its provisions. No change in this policy shall be valid unless approved by an executive officer of the company and such approval be endorsed thereon.' Both the agent and the insured were ignorant of these provisions at the time the insurance was purchased. The plaintiff subsequently became disabled as a result of coronary insufficiency.

The plaintiff did sign a Georgia Security Agreement containing the statement that if 'the credit and health insurance coverage provides that if the insured becomes totally disabled due to an accident occurring or a sickness contracted and commencing during the term of the indebtedness' stated amounts would be paid. Lucas was not disabled at the time of the transaction, and whether a subsequent disabling heart condition 'commenced' and 'was contracted' prior thereto presents at the very least an ambiguity in view of the assurance that notwithstanding his prior heart attack he was covered by the policy. A layman could well understand this language as meaning that such an occurrence would be a sickness 'commencing' after and not before the inception of the policy period.

'Limitations in an insurance policy upon the authority of the agent of the company to waive the conditions of the contract of insurance are to be treated as referring to waivers made subsequently to the issuance of the policy.' Johnson v. Aetna Ins. Co., 123 Ga. 404(2), 51 S.E. 339, and see People's Bank of Mansfield v. Ins. Co. of North America, 146 Ga. 514, 518, 91 S.E. 684, L.R.A.1917D, 868; Mechanics' & Traders' Ins. Co. v. Mutual Real Estate & Building Assn., 98 Ga. 262, 25 S.E. 457; Fireman's Fund Ins. Co. of San Francisco v. Standridge, 103 Ga.App. 442(2), 119 S.E.2d 585; John Hancock Mutual Life Ins. Co. v. Yates, 182 Ga. 213, 185 S.E. 268; Brown v. Globe & Rutgers Fire Ins. Co., 161 Ga. 849, 133 S.E. 260; Ins. Co., of North America v. DeLoach & Co., 3 Ga.App. 807, 61 S.E. 406; Grantham v. Royal Ins. Co., 34 Ga.App. 415, 130 S.E. 589; Rome Ins. Co. v. Thomas, 11 Ga.App. 539, 75 S.E. 894; Bankers Fire & Marine Ins. Co. v. Hopkins, 93 Ga.App. 246(1), 91 S.E.2d 298; Athens Mutual Ins. Co. v. Evans, 132 Ga. 703(5), 64 S.E. 993; Athens Mutual Ins. Co. v. Ledford, 134 Ga. 500(1), 68 S.E. 91; George Washington Life Ins. Co. v. Smith, 90 Ga.App. 459(2), 83 S.E.2d 302; Reserve Life Ins. Co. v. Bearden, 96 Ga.App. 549, 101 S.E.2d 120, affd., 213 Ga. 904, 102 S.E.2d 494; Metropolitan Life Ins. Co. v. Hale, 177 Ga. 632, 170 S.E. 875. Nothing to the contrary is demanded by Southeastern Fidelity Fire Ins. Co. v. State Farm Mutual Automobile Ins. Co., 118 Ga.App. 861, 165 S.E.2d 887. In that case the agency of Neal, who procured the insurance, was not admitted, and the application for the insurance was not even filled out until after the collision had occurred.

The plaintiff's deposition is to the effect that after he questioned Fuller as to whether his prior heart condition would militate against his obtaining adequate insurance, the salesman made a telephone call and then returned and assured to him that it was all right. Accordingly, a jury question exists both as to agency and as to the waiver of the exclusory provision referring to prior illness. The trial court, after first denying the defendant's motion for summary judgment, effed in vacating that judgment and entering a second judgment in favor of the defendant.

Judgment reversed.

BELL, C.J., concurs.

EBERHARDT, J., concurs specially.

EBERHARDT, Judge (concurring specially).

The insured here did not make a written application to the company for the insurance contract, just as was the case in Metropolitan Life Ins. Co. v. Hale, 177 Ga. 632, 170 S.E. 875. Consequently, we have nothing to indicate that Lucas was put on notice of any limitation of authority on the part of the company's soliciting agents-which usually appears in the application-and, as Judge Jenkins said in National Life & Accident Ins. Co. v. Cantrell, 49 Ga.App. 368, 175 S.E. 543, we 'must yield to the authority of the Hale case.'

Running through the decisions in many cases, particularly since New York Life Ins. Co. v. Patten, 151 Ga. 185, 187, 106 S.E. 183, has been an assertion that there is a difference in the treatment to be afforded a situation in which the agent having knowledge which may work a waiver or an estoppel against the company is a mere soliciting agent and in that where the agent has authority to issue the policy, as do fire insurance agents. There are cases in which it was held, in the former situation, that the insured should be held to be on notice of the limitation, if it is in the policy, by his acceptance of the policy, which is the time when the...