North Am. Acc. Ins. Co. v. Watson

• Decision Date: 18 May 1909
• Docket Number: 1,609.
• Citation: 64 S.E. 693,6 Ga.App. 193
• Parties: NORTH AMERICAN ACCIDENT INS. CO. v. WATSON.
• Court: Georgia Court of Appeals

64 S.E. 693

6 Ga.App. 193

NORTH AMERICAN ACCIDENT INS. CO. v. WATSON.

No. 1,609.

Court of Appeals of Georgia

May 18, 1909

Syllabus by the Court.

A condition in a policy of insurance for sick benefits requiring that written notice of the sickness for which the benefit is claimed shall be given to the company within 10 days from the commencement of the sickness under penalty of forfeiture, unless expressly stipulated to be a condition precedent, will be treated as a condition subsequent, and given a liberal construction in favor of the beneficiary of the policy.

[Ed Note.-For other cases, see Insurance, Cent. Dig. §§ 1328-1336; Dec. Dig. § 539. ^[*]]

Where the insured was suddenly stricken with some disease of the brain, which rendered him unconscious, and made it impossible for him to give to the company written notice of his sickness within the time stipulated, this fact was legally sufficient to excuse him from a compliance with this condition of the policy during the existence of such disability.

[Ed Note.-For other cases, see Insurance, Cent. Dig. § 1334; Dec Dig. § 539. ^[*]]

Although the time in which the insured shall give to the company notice of his sickness is fixed by the contract, if his sickness makes a literal compliance impossible, he will be excused for the failure, if he complies with his contract in this respect within a reasonable time after it becomes possible for him to do so, or within the time stipulated after the cause preventing compliance ceases to exist.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. § 1334; Dec. Dig. § 539. ^[*]]

The burden is on the insured to excuse his failure to comply with the plain, unambiguous terms of his contract. In this case the insured did not successfully carry this burden, and the evidence affirmatively shows that he failed to exercise reasonable diligence in complying with the terms of the contract requiring him to give written notice to the insurance company of the commencement of the sickness for which he claimed a benefit.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. § 1666; Dec. Dig. § 646. ^[*]]

Error from Superior Court, Fulton County; W. D. Ellis, Judge.

Action by O. H. Watson against the North American Accident Insurance Company. Judgment for plaintiff, and defendant brings error. Reversed.

Per Russell, J., dissenting.

Tye, Peeples, Bryan & Jordan, for plaintiff in error.

Smith, Hammond & Smith and F. L. Neufville, for defendant in error.

HILL C.J.

Watson sued the North American Insurance Company in a justice's court for $100, claimed as a sick benefit under a policy issued to him by the company. He obtained a judgment for the full amount, and on appeal to the superior court the jury found a verdict in his favor for this amount. The company filed a motion for a new trial, which was overruled. The insurance company defended on the sole ground that the plaintiff had forfeited his right to the sick benefit claimed by him under the policy because of his failure to comply with the following express condition thereof: "Written notice of any injury, fatal or nonfatal, or of any sickness for which claim can be made, shall be given to the company at its home office at Chicago, within ten days of the occurrence of the accident or commencement of the sickness, and failure to give such written notice within ten days from the date when it becomes possible to give such notice of injury, or, in case of sickness, within ten days from date of commencement of sickness, shall invalidate any and all claims under this policy." The company admitted that it had received written notice from the plaintiff of his sickness, but claimed that this notice had not been received by it either at its home office in Chicago or elsewhere within 10 days from the commencement of the plaintiff's sickness as required by this stipulation of the policy. The plaintiff replied to this defense by the allegation that he had been providentially prevented from giving the written notice within the 10 days because of mental and physical incapacity caused by his sickness, and that, after he had recovered sufficiently to give the notice required by this condition of his policy, he did so with all reasonable and proper diligence. By an amendment to his petition he alleged that the company had waived his failure to give the notice within the time stipulated, by sending to him, through its agent, a blank form for the purpose of having him prepare and send the notice to it, which he did as soon as he received the blank. The question for decision arises on the construction of this condition of the contract.

Some authorities hold that, where the language is plain and unambiguous and mandatory in its character, its terms cannot be enlarged by judicial construction, but demand strict compliance with the letter of the contract, and that liability cannot in any event survive a failure to comply literally with its requirements in this respect. Gamble v. Accident Assurance Company, 4 Ir. R.C.L. 204; Patton v. Employers' Liability Assurance Corporation, 20 Law Rep. (Ir.) 93. Other authorities take a more liberal view, and hold that stipulations as to time in which notice of injury, loss, or sickness for which indemnity is claimed is required to be given are not necessarily and in every instance to be literally complied with in order to prevent a forfeiture of the policy. Unless these provisions are expressly stipulated to be conditions precedent, they should be treated as conditions subsequent and given a liberal construction in favor of the beneficiary of the policy to prevent a forfeiture. The condition that notice shall be given operates upon the contract of insurance only subsequent to the fact of loss, injury, or sickness, and it should therefore receive a liberal and reasonable construction in favor of the beneficiary under the contract. Niblack on Accident Insurance and Benefit Societies, § 417; Woodmen Accident Association v. Pratt, 62 Neb. 673, 87 N.W. 546, 55 L.R.A. 291, 89 Am.St.Rep. 777. It is settled by an overwhelming weight of authority that where the failure to give prompt notice is not due to the negligence of the insured or beneficiary, but such compliance has been prevented and rendered impossible by an act of God, this would furnish a sufficient legal excuse for the delay in giving the stipulated notice, and this doctrine has been applied in cases in which a specified time for the giving of the notice has been fixed by the contract. The theory of these cases, as stated by Cooley (4 Briefs on the Law of Insurance, 3462), is that "it could not have been in the contemplation of the parties that if the insured, who was required to give the notice, was unable to do so by reason of the very accident against which indemnity was given, he should therefore lose such indemnity through no fault of his own." Reed v. Loyal Protective Association (Mich.) 117 N.W. 600; 37 Insurance Law Journal, 1024; Brown v. Fraternal Accident Association, 18 Utah 265, 55 P. 63; Comstock v. Fraternal Accident Association, 116 Wis. 382, 93 N.W. 22; Hayes v. Continental Casualty Co., 98 Mo.App. 410, 72 S.W. 135; Insurance Company v. Boykin, 12 Wall. 433, 20 L.Ed. 442; Woodmen Accident Association v. Pratt, 62 Neb. 674, 87 N.W. 546, 55 L.R.A. 291, 89 Am.St.Rep. 777. The Supreme Court of Georgia in the case of United Benefit Society v. Freeman, 111 Ga. 355, 36 S.E. 764, in a policy where the condition as to notice to be given was expressly stipulated to be a condition precedent, clearly recognizes that impossibility of performance by the insured would be a sufficient legal excuse for a failure to give the notice within the time required by the terms of the policy. In that case the court holds, however, that the evidence was not sufficient to support the finding that it was impossible for the plaintiff to give the notice to the society within ten days from the date of his injury. We deduce the proposition from the authorities cited that where the insured is suddenly stricken with some disease of the brain which renders him unconscious, and makes it impossible for him to give to the company within the time stipulated written notice of his sickness, this fact is legally sufficient to excuse him from a compliance with this condition of the policy during the existence of such disability. We are also of the opinion that, although the time in which the insured should give to the company written notice of his sickness is fixed, if the sickness itself makes a literal compliance impossible, giving the notice required within a reasonable time after it becomes possible to do so, or within the time stipulated after the cause preventing prior compliance has ceased to exist, would be sufficient to prevent a forfeiture. McFarland v. U.S. Mutual Accident Association, 124 Mo. 204, 27 S.W. 436; Woodmen Accident Association v. Pratt, supra. The questions of the sufficiency of the excuse offered, and the diligence of the beneficiary in giving the notice after the removal of the disability, are generally questions of fact, to be determined by the jury, according to the nature and circumstances of each individual case.

The material facts in the case now under consideration are not controverted. On July 20, 1907, the insured, while walking on the streets in Macon, was suddenly stricken with some disease of the brain which rendered him unconscious. He was taken to a hospital, where he remained under constant treatment for 16 days. During the first five days he was totally unconscious the remainder of the time he had lucid intervals, but, according to the testimony of his physician, during the entire 16 days he was incapable of transacting any business. On August 5th he was sufficiently restored to be removed to his home, some...