Penn Mut. Life Ins. Co v. Blount, (No. 19126.)

• Decision Date: 06 March 1929
• Docket Number: (No. 19126.)
• Citation: 147 S.E. 768,39 Ga.App. 429
• Parties: PENN MUT. LIFE INS. CO. v. BLOUNT et al.
• Court: Georgia Court of Appeals

39 Ga.App. 429

147 S.E. 768

PENN MUT. LIFE INS. CO.

v.BLOUNT et al.

(No. 19126.)

Court of Appeals of Georgia. Division No. 1.

March 6, 1929.

Rehearing Denied April 9, 1929.

(Syllabus by the Court.)

Bloodworth, J., dissenting.

Error from City Court of Waynesboro; G. C. Anderson, Judge.

Action by Hosea Blount and others, trustees, against the Penn Mutual Life Insurance Company. Judgment for plaintiffs, and defendant brings error. Reversed.

Callaway & Howard, of Augusta, and Full-bright & Burney, of Waynesboro, for plaintiff in error.

Fleming & Fleming, of Augusta, for defendants in error.

LUKE, J. In 1923, E. Hosea Blount et al., as trustees, brought their action against the Penn Mutual Life Insurance Company on a $5,000 policy written on the life of Ransom A. Bell. The trial judge overruled the defendant's demurrers to the petition, and it excepted. In 33 Ga. App. 042, 127 S. E. S92, this court affirmed the judgment overruling the general demurrer and certain special demurrers, but reversed the judgment overruling other special demurrers.

When the case was tried the jury rendered a verdict for the plaintiffs. The defendant's motion for a new trial was overruled, and it excepted. The Court of Appeals certified certain questions deemed necessary to the decision of the case, and these questions were answered in 165 Ga. 193, 140 S. E. 496. On February 28, 1928, this court rendered its decision, reported in 37 Ga. App. 756, 142 S. E. 183, reversing the judgment of the trial court refusing a new trial.

The case came on for trial again, and on April 24, 1928, the jury found for the plaintiffs. The insurance company made a motion for a new trial, based upon the general grounds and upon certain special grounds complaining of the charge of the court and its rulings upon the evidence. The court overruled the motion for a new trial, and the case is again here for review.

The crucial question in this case is now reduced to this: Did the insurer ratify its agent's unauthorized delivery of the policy to the insured?

Through their counsel, the parties to the case agreed "that the evidence used in a former trial of this case be read into the record of this case, with the right to either party to introduce said former testimony in whole or in part, with the further right to either party to interpose objections to the introduction of any part of said former testimony and have the court's rulings on such objections entered in the record."

Under the foregoing agreement, the testimony of P. W. Thompson, which was substantially as follows, was offered in evidence: On October 1, 1922, P. W. Thompson, local agent for the insurance company at Waynesboro, Ga., delivered to Ransom A. Bell, the insured a $5,000 life insurance policy dated September 25, 1922, upon condition that the insured would pay Thompson the premium "at a future date." On October 7, 1922, Bell returned the policy to Thompson with a request that the beneficiary be changed; and on the same day Thompson sent the policy in a letter to I. T. Heard, general agent of the insurer. In the letter this language was used: "* * * I am returning the policy for Mr. R. A. Bell so that you can have the beneficiary changed as per his request. * * * On the receipt of this policy with the above correction, he will pay the same. You will note the enclosed paper that he gave me, the same being signed by him."

Mr. I. T. Heard transmitted the policy to the Home Office in a letter dated October 10, 1922, addressed to Harrison S. Gill, supervisor, at Philadelphia. In this letter was a request that the policy be rewritten and made payable to named beneficiaries. That letter also contained the following language: "It seems to us that a simpler way would have been to have the actuary prepare an assignment as above, but we leave the matter to your good judgment. Mr. Bell will pay the first premium as soon as this change is made." On October 10, 1922, I. T. Heard wrote P. W. Thompson as follows: " * * * Policy No. 1030617, Ransom A. Bell, has been sent to our Home Office in order that the Company may make the changes requested in your letter of the 7th, * * *" etc. A letter from Harrison S. Gill, supervisor, of applications and death claims, addressed to I. T. Heard, General Agent at Augusta, Ga., and dated October 22, 1922, acknowledged receipt of said policy "to be rewritten with change of beneficiary, " and stated that a policy was being written as desired.

Under date of October 25, 1922, Thompson wrote Heard as follows: "* * * Mr. Ransom A. Bell, insured under policy No. 1030617, died on Saturday night, October 21, 1922, and we have been requested by Mr. E. H. Blount, trustee, to make request for forms so that we can send in proof of death. Please give this your prompt attention. * * *" A letter from I. T. Heard, general agent, to Harrison S. Gill, supervisor, dated September 23, 1922, contained the following language: '* * * Enclosed find application of Ransom A. Bell, of Waynesboro, Georgia, for $5,000 on the five year T. A-0 to O. L. We are informed that the applicant is a good reliable planter and can well afford to pay for this protection. His habits are good, he enjoys the best of health, and is happily married, and should make us a safe and persisting member. * * *"

The rules of the insurer did not permit a policy to be left with an applicant for inspection in advance of the payment of the premium, unless he signed a written form stating that the policy was so delivered. Thompson, the local agent, did not take such writing when he delivered the policy to the insured. The premium was never paid on the policy. The trustees for the beneficiaries in the policy called on Thompson before the insured died, and offered to pay the premium, but he refused it on the ground that Bell was not then in good health. (Bell had suffered burns from which he afterwards died.) The trustees then asked Thompson if he considered the policy delivered, and he replied that he did, "with the exception of the premium." Thompson testified: "I don't think that I had any correspondence with the Company at Philadelphia directly, nor that they ever communicated or corresponded with me directly. As far as I remember, my communications in connection with this business were with Mr. Heard, and were either in writing or by conversation."

When Heard received the new policy with change of beneficiaries, ready for delivery to the insured, Thompson talked over the entire matter with Heard, beginning with his delivery of the first policy to the insured, telling him, among other things, of his refusal to accept the premium from the trustees after the insured had been burned. During this conversation Thompson told Heard, in reply to Heard's question as to the circumstances under which the first policy had been delivered, that it was delivered to Bell on condition that he would pay for it on the 14th or 15th, but that he had not done so. This conversation was after these dates Heard requested Thompson to write him a letter setting out the facts connected with the delivery of the policy, and he wrote that letter on November 7, 1922. The said conversation with Heard while the insured was sick was the first statement made by Thompson of the delivery of the policy to the insured, and the said letter written to Heard at request was the second. The insured was injured on October 19, 1922, and died on the night of October 21, 1922. Thompson did not know the conditions of the policy, and thought he had a right to deliver the first policy as he did. The second policy was never delivered. It was dated September 25, 1922, which was the date of the original policy. Thompson did not know that the contract of insurance contained this provision: "The contract of insurance shall not be enforced unless the first premium thereon is actually paid during the lifetime and good health of the insured." Thompson testified in this language: "The premium rate for this policy was fixed according to the rules of the Company, which require that the rate of premium charged will be that corresponding to the age of insured nearest to the premium date of the policy, which in this case was September 25, 1922; the nearest birthday of the applicant being October 22, 1922."

Besides the foregoing evidence, the plaintiffs introduced policy No. 1030617, issued by the Penn Mutual Life Insurance Company on the life of Ransom A. Bell for $5,000 and dated September 25, 1922, together with the attached written application for the policy.

The following testimony of Pierre Heard was also offered by the plaintiffs: "It is a custom with us, under our practice and rules, to make delivery of a policy by taking a check. We would take a check on New York, New York exchange, when the party is considered good. As to how many days it takes to get a report that the check has been paid, I deposit it and get credit for it the next morning. I would not send it through any mails to New York. It would be deposited in Augusta. I have been doing this for a great many years. Of course, some of the agents know about our accepting a check on premiums. The agents know that we take checks, notes and cash."

The defendant introduced certain documentary evidence, the first paper being a letter from Harrison S. Gill, supervisor of applications and death claims, to I. T. Heard, dated September 25, 1922, and reading as follows: "* * * The papers in case of Ransom

A. Bell have been approved and policy for $5,000. It is going forward to you promptly. * * * I trust policy will be satisfactory and that you will have no difficulty in effecting its delivery." The inclosure referred to in the foregoing letter was as follows: " * * * We herewith transmit, together with first receipt, Policy No. 1030617, on the life of Ransom A. Bell, which by its terms is not to be delivered unless the insured continues in good health. * * *" Next was introduced a letter dated October 24, 1922, from I. T. Heard to Harrison S. Gill,...