Mayes v. Wash. Nat. Ins. Co

• Decision Date: 09 June 1948
• Docket Number: No. 31961.,31961.
• Parties: MAYES. v. WASHINGTON NAT. INS. CO.
• Court: Georgia Court of Appeals

49 S.E.2d 123

MAYES.

v.WASHINGTON NAT. INS. CO.

No. 31961.

Court of Appeals of Georgia,

Division No. 2.

June 9, 1948.

Rehearing Denied July 31, 1948.

Syllabus by the Court.

1. The effect of reinstatement of an insurance policy by the acceptance of past-due premiums in accordance with the terms thereof is to revive the old policy in all its vigor as if the lapse had never occurred and the new policy is merely a continuation of the old coverage, especially when the terms and conditions are the same, when a new contract is not issued, and when it is for the benefit of the policy holder that the premiums paid at reinstatement relate back to the date of lapse to preserve the continuity of reserves, loan values, increases in benefit and the like.

2. However, if, in the case of an accident policy with no continuity requirement for increase of benefits involved, the policy provides that the insurance company shall not be responsible for accidents occurring during, or illness arising out of, the period of lapse, the court will not presume that the insured paid for coverage which he did not receive and will give the reinstatement prospective effect from its date, extending the period of coverage from the date of reinstatement over the entire term for which the insured gave value in premiums, but will not make it retroactive to include injury, disability, or death occurring during the period of default.

3. On the other hand, where there are no provisions in such an accident policy that the effect of reinstatement is to makea new policy and break the period of continuity, a provision for increase of benefits in case of continuity will be held to dominate over (but not to obviate) the provision that the company is not liable for accident or illness arising during the period of lapse; and the effect of the provision for increase of benefits is to bring the policy back into the general rule and the policy is reinstated and renewed in all its original vigor as if the lapse had never occurred (except for accident and illness arising during the period of lapse which is expressly excepted by the terms of the policy), thus giving the policy holder consideration for the full premium which he paid by enforcing the increase of benefits provision, but preventing the insurance company from being liable for the extended term from the date of reinstatement.

4. The trial judge erred in directing a verdict for the insurance company, and in refusing a new trial.

Error from Civil Court of Fulton County; Robert Carpenter, Judge.

Action by Jennie Mayes, as beneficiary under an accident policy issued to her son, Jimmy Mayes, against the Washington National Insurance Company to recover accumulated benefits. To review a judgment denying her motion for a new trial after a directed verdict for defendant, plaintiff brings error.

Judgment reversed.

Lucian J. Endicott, of Atlanta, for plaintiff in error.

J. Lon Duckworth, of Atlanta, for defendant in error.

MacINTYRE, Presiding Judge.

Upon the trial of the within cause in the court below, at the conclusion of the evidence of the plaintiff, Jennie Mayes, here plaintiff in error, the defendant, Washington National Insurance Company, moved for a directed verdict in its favor against the plaintiff and the same was directed by the trial judge. The plaintiff assigns error on the overruling of her motion for a new trial.

The admissions of the defendant in its answer and the brief of evidence on the trial, which evidence is uncontested at this stage of the proceedings, show the following facts: That on September 2, 1941, the defendant issued an accident insurance policy in the principal sum of $300 to Jimmie Mayes, son of the plaintiff, on his own life, and the plaintiff was named as beneficiary; that the portions of the policy considered material to this court's consideration of the case were as follows:

"For each period of twelve consecutive months immediately preceding the date of the accident that this Policy shall have been maintained in continuous force, Ten Per Cent will be added to the Original Principal Sum, but all such additions shall never exceed Fifty Per Cent of the Original Principal Sum.

"The Principal Sum, as used herein, shall be the Original Principal Sum plus any additions that may have accrued under the provisions of Paragraph (B) ^ra at the time of the occurrence of any loss for which the Principal Sum is payable.

"A period of five days of grace is allowed for the payment of any renewal premium, during which period this Policy shall remain in full force and effect in accordance with its terms, but if the payment of any renewal premium is not made by twelve o'clock noon on the final day of grace the Policy shall expire and the insurance effected by Policy terminated; however, the Insured, at the option of the Company, may reinstate the Policy by paying the premium due with the distinct understanding that there shall be no liability for death, disability or other loss resulting from such injury due to accident occurring between the date of expiration and the day following such reinstatement, nor for death, disability or other loss resulting from such disease or illness contracted or having its beginning before the tenth day after such reinstatement. Failure to pay any renewal premium shall void this Policy.

"It is distinctly understood and agreed that the acceptance of any premium after same has become delinquent shall not be deemed a waiver on the part of the Company of any of the provisions, terms orconditions contained in this Policy."; that Jimmie Mayes was accidentally killed on April 8, 1947; that the policy receipt book of Jimmie Mayes was turned over to the defendant and showed that the policy lapsed for non-payment of premiums on several occasions, but was automatically revived by the payment of premiums as provided for under the terms of the policy, that the last time immediately preceding the date of the death of the insured on which the policy lapsed for non-payment of premiums was in February, 1946, being approximately fourteen consecutive months prior to the...