Merritt v. The Cotton States Life Ins. Co.

• Decision Date: 31 July 1875
• Citation: 55 Ga. 103
• Parties: Thomas M. Merritt, administrator, plaintiff in error. v. The Cotton States Life Insurance Company, defendant in error.
• Court: Georgia Supreme Court

55 Ga. 103

Thomas M. Merritt, administrator, plaintiff in error. v. The Cotton States Life Insurance Company, defendant in error.

Supreme Court of the State of Georgia

(Atlanta, July Term, 1875.)

[Bleckley, Judge, having been of counsel, did not preside in this case.]

New trial. Practice in the Superior Court. Insurance. Jurisdiction. Venue. Administrators and executors. Waiver. Evidence. Insanity. Suicide. Before Judge Clark. Sumter County. At Chambers, February 5th, 1875.

On March 24th, 1874, Thomas H. Merritt, as administrator upon the estate of Wade H. Merritt, deceased, brought complaint against the Cotton States Life Insurance Company, for $10,000 00, alleged to be due on a policy of insurance covering the life of said deceased. The declaration also contained a count for $4,000 00, it being four-tenths of the face of said policy, under a stipulation contained therein, four annual premiums only having been paid. A count for twenty-five per cent. damages, and for $1,000 00 counsel fees, was also added alleging that the payment was in bad faith.

The action was brought in the county of Sumter where the defendant had an agent at the time the policy was issued. The principal office of the company was in Bibb county. Relying on these facts, the defendant filed a plea to the jurisdiction. The issue thus formed was submitted to the court without the intervention of a jury. The plea was overruled and the defendant excepted.

The defendant further pleaded that the defendant died by his own hand. Also, that if anything was due on the policy, it was $2,734 42, it being four-tenths of the sum insured, with a divi-dend added, deducting the amount due by deceased to defendant. Other pleas were also filed, not material here.

The evidence for the plaintiff made the following case:

Wade H. Merritt died on January 20th, 1874. The policy was, in substance, as follows:

It bears date the 20th day of December, 1869; is numbered six hundred and seventy-two, and purports to have been made in consideration of representations made in the application therefor, and an annual premium of $576 30 to be paid on orbefore the 20th day of December, for ten years next succeeding *the date of the policy, or during its continuance, premiums to be paid by an annual loan of $288 00, and a cash premium (annual) of $288 30, on the 20th day of December, subject to the conditions thereinafter named.

The policy agrees to pay, if it shall not be previously terminated, $10,000 00 (the balance of the years' premiums, if any, and all other notes or credits for premiums thereon, and other indebtedness of the insured to the company being first deducted,) to the insured or his executors, administrators or assigns, on the 20th day of December, 1919, or if the insured should die previously thereto, then within sixty days after due proof of his death is received by the company: provided, always, that this policy is issued by the company, and accepted by the insured, on the following express conditions:

If the premiums due are not paid as stipulated; if the interest due on one note or credit for premium is not paid annually in advance; if the insured should die by his own hand; if the declarations or any of the statements made in the application for this policy are fraudulent or untrue, then, and in each of these several cases, this policy shall terminate and become void and of no effect, and all premiums paid, and all interest in the funds of the company, shall be forfeited. But if, however, this policy shall be terminated by the non-payment of premiums and for no other cause, after two years' premiums shall have been paid this policy shall still be valid for as many tenth parts of the sum insured as there shall have been premiums paid. The policy was not to take effect until it was countersigned by George F. Fry, agent at Americus. Fry countersigned 22d day of December, 1869.

It was conceded that the insured had paid four annual premiums previous to his death.

On February 20th, 1874, the secretary of the defendant wrote to the plaintiff as follows: "Yours of the 17th instant, informing me of the death of your brother, Wade H. Merritt, is at hand.

The premium due December 20th. 1873, was not paid, the policy was not in force from that date; even *though payment had been made, the manner of his death would have rendered it void."

Reasonable fees, on the basis of a recovery of $10,000 00 were shown to be $1,000 00; on the basis of a recovery of $4,000 00, $500 00.

Here the plaintiff rested his case.

The defendant moved for a non-suit on the following grounds:

1st. Because the plaintiff had failed to show that he was the administrator of Wade H. Merritt, deceased.

2d. Because he had failed to show any proof of death, as required by the policy, or refusal to pay, as required by law.

3d. Because the defendant was not liable to suit until the expiration of sixty days from proof of death, whilst this action was brought within thirty-three days after the so-called refusal.

The motion was overruled, and the defendant" excepted.

Much evidence was introduced by the defendant tending to show that the insured died by his own hand. This was replied to by the plaintiff by proof to show the insanity of the insured at the time of his death.

The court charged the jury, amongst other things, as follows:

1st. "By the terms of the policy, if Merritt continued to pay the premiums for ten years, he was entitled, at the end of ten years, to a paid up policy for $10,000 00, payable in 1919, or at his death if he should die sooner. This contract of insurance is subject to certain conditions, one of which, among others, is, that if the insured died by his own hand, or, in the language of the Code, committed suicide, then the policy of insurance is void. It is stipulated in the policy that if two premiums are paid the whole policy is not avoided by the non-payment of other premiums, but the insured is entitled to as many tenths of the ten thousand as he has paid annual premiums. In other words, after the payment of two premiums and a failure to pay more, he is entitled to a paid up policy for as many tenths as he had paid premiums. But he *is not released from the other conditions and limitations of the policy. The view of the plaintiff's counsel that he gets a paid up policy subject to no conditions or limitations is erroneous. If he should get a paid up policy he is as much bound by the conditions of the original policy as if he had not forfeited a right to the remainder. The company is largely interested in the continuance of the life of the insured, and if he should commit suicide after being entitled to a paid up policy for the whole or a fractional part thereof, the original policy is void and the company is not liable.

2d. "If the company agreed with Merritt to let him have thirty days within which to pay, after the time when the premiums were due, and he died, except by his own hand, within thirty days' time, the company is liable for the whole $10,000 00; if he died after the thirty days the company is not liable for the whole amount. In this case the premium was due on the 20th day of December, 1873, and it was agreed that Merritt died...