Occidental Life Ins. Co. of Cal. v. Templeton, 22006

• Decision Date: 29 May 1963
• Docket Number: No. 22006,22006
• Citation: 131 S.E.2d 530,219 Ga. 39
• Parties: OCCIDENTAL LIFE INSURANCE COMPANY OF CAL. v. Lurline TEMPLETON, Ex'x, et al.
• Court: Georgia Supreme Court

Page 530

131 S.E.2d 530

219 Ga. 39

OCCIDENTAL LIFE INSURANCE COMPANY OF CAL. v. Lurline TEMPLETON, Ex'x, et al.

No. 22006.

Supreme Court of Georgia.

May 29, 1963.

Fulcher, Fulcher, Hagler & Harper, Augusta, for plaintiff in error.

Randall Evans, Jr., Thomson, Jeff D. Curry, Augusta, for defendants in error.

Syllabus Opinion by the Court

CANDLER, Justice.

On February 15, 1954, Occidental Life Insurance Company of California issued to Dr. Clinton Monroe Templeton a policy on his life for $5,000. About ten months later he assigned the policy to Mrs. Lurline Templeton, his wife, and gave the insurer written notice thereof. On February 15, 1960, the policy had a cash surrender value of $458.75 and Dr. Templeton, as the insured, and Mrs. Templeton, his wife, as assignee of the policy, jointly applied for its cash surrender value on a form furnished them by the insurer which each of them signed in the presence of the number of witnesses required by the insurer. Their application, together with the policy, was mailed to the home office of the insurer in Los Angeles on February 16, 1960, and was received by it on February 22, 1960. The insurer issued and mailed to Dr. Templeton and Mrs. Templeton a check payable to both of them for the full cash surrender value of the policy on February 29, 1960, but Dr. Templeton had suddenly died in his sleep two days prior thereto. The check was returned to the insurer. Later and on March 22, 1960, the insurer issued and forwarded to Mrs. Templeton, as assignee of the policy, a check for its full surrender value. She also returned this check to the insurer and made a demand on it for full payment of the policy. Her demand for payment of the policy was refused. On June 28, 1960, Mrs. Templeton as executrix of the estate of Dr. Templeton and individually as assignee of the policy, filed a suit in the Superior Court in Richmond County against the insurer for the full amount of the policy, namely, $5,000; and also for $1,250 (25% of $5,000) as penalty for the company's alleged bad faith in failing to pay the face amount of the policy after demand therefor and $3,750 as counsel fees. By its answer, the defendant denied that the policy was of force and effect at the time of Dr. Templeton's death and averred that its only liability was for payment of the cash surrender value of the policy since Dr. Templeton and Mrs. Templeton, his wife, had exercised the option which the policy contained to surrender it and demand payment of its cash value. A photostat copy of the application for payment of the cash surrender value of the policy is attached to the defendant's answer as an exhibit and it recites: 'It is agreed that the entire liability of the company under said policy, except for said net cash value, is hereby discharged and terminated.' On the trial, and after the introduction of evidence had closed, the defendant moved for a directed verdict in its favor. Its motion was denied and the jury found in favor of the plaintiff, awarding by its verdict $5,000 'with no interest or penalty' and $1,000 as attorney fees. The defendant timely moved for a judgment in its favor notwithstanding the verdict. It also moved for a new trial. Both motions were overruled. The movant excepted and sued out a writ of error to the Court of Appeals, assigning error on both judgments. That court held, 107 Ga.App. 322, 130 S.E.2d 168, that the verdict for $1,000 as attorney fees could not be sustained since the jury had found that their was no bad faith on the company's part in refusing to pay the face amount of the policy on demand therefor. It also held: 'Assuming, as contended by the defendant that the plaintiff and the insured had executed an application to surrender the policy for its cash value, and had forwarded the same to the defendant before the death of the insured, under the express provisions of the policy (as plead by the defendant), the insurance company had an option of accepting the application to surrender the policy immediately or to defer payment of such cash surrender value for a period of up to six months. The undisputed evidence, including evidence which the insurer contends should have been admitted over the plaintiff's objections, shows that the option given the insurer was not exercised until after the death of the insured. While it is true that the insurer, under the terms of the policy (as shown by the pleading) was required to pay the cash surrender value six months after the application was received at its home office, yet until the application was accepted and the cash surrender value paid the policy was...