Rabb v. Mutual Ben. Health and Acc. Ass'n

• Decision Date: 18 September 1958
• Docket Number: No. 37341,No. 2,37341,2
• Parties: F. K. RABB v. MUTUAL BENEFIT HEALTH AND ACCIDENT ASSOCIATION
• Court: Georgia Court of Appeals

Page 396

105 S.E.2d 396

98 Ga.App. 193

F. K. RABB v. MUTUAL BENEFIT HEALTH AND ACCIDENT ASSOCIATION.

No. 37341.

Court of Appeals of Georgia, Division No. 2.

Sept. 18, 1958.

R. H. Jones, Augusta, for plaintiff in error.

Hull, Willingham, Towill & Norman, W. Hale Barrett, Augusta, for defendant in error.

Syllabus Opinion by the Court

TOWNSEND, Judge.

1. 'After a valid contract of insurance has been effectuated, the right of either party to cancel it at pleasure can accrue only in three ways: 1. By a concurrent agreement with the other party to that effect. 2. By a previous reservation of the right in the policy itself. 3. By statutory provision permitting it.' Prudential Ins. Co. v. Ferguson, 51 Ga.App. 341, 346, 180 S.E. 503, 506. Reservation of such right in the company should be strictly construed, but where the language is plain and unambiguous it must be given its reasonable intendment in accordance with the intention of the parties.

2. (a) 'Where a polity of insurance is for a term only, and at a designated premium per month for such other periods as as may be provided in agreements of renewal, and provides that 'the acceptance of any renewal premium shall be optional with' the insurer, the insured has no contract right to a renewal of the policy beyond the term originally stated, and cannot renew it beyond the expiration of any renewal period which may have been agreed upon, by a payment in advance of the monthly premium, although made in accordance with the provisions of the policy, where the insurer refuses payment, returns the money, and refuses to renew the policy. A failure of the insurer in such a case to accept the payment and to renew the policy does not amount to a repudiation or violation of the contract of insurance.' Hall v. Provident Life & Accident Insurance Co., 48 Ga.App. 359, 172 S.E. 721. See also Massachusetts Bonding & Ins. Co. v. McConnel, 50 Ga.App. 87, 176 S.E. 911; Washington Nat. Ins. Co. v. Phinizy, 49 Ga.App. 304, 175 S.E. 387.

(b) An exception to this rule of course exists where a loss has occurred as to which a claim is pending or will be pending within the time limited in the policy for filing it, since the insurer cannot take advantage of a cancellation clause or an option-to-terminate clause in a policy so as to rid itself of an accrued liability. This rule of law explains and distinguished National Life Ins. Co. v. Jackson, 18 Ga.App. 494(2), 89 S.E. 633, relied upon by the plaintiff in error, for it was there held that even though an option-to-terminate clause existed in a combined life and health policy, the company was estopped to refuse to accept the monthly premium payment so as to relieve itself of liability for the death of the insured who had contracted a fatal illness during the time payments were made and accepted.

3. The policy in question contained the provision: '(c) This policy is issued on consideration of the statements made by the insured in the application and the payment in advance of $23 as first payment; and the payment in advance of premiums of $13 quarterly of $52 annually thereafter, beginning with December 1, 1932, is required to keep this policy in continuous effect. If any such dues be unpaid at the office of the Association in Omaha, Nebraska, this policy shall terminate on the day such payment is due. The acceptance of any premium on this policy shall be optional with the Association, and should the premium provided for herein be insufficient to meet the requirements of the Association, it may call for the difference as required. The mailing of notices to the insured at least 15 days prior to the date they are due shall constitute notice of dues. (d) The term of this policy begins at 12 o'clock noon, standard time, on date of delivery to and acceptance by the insured against accident and on the 31st day thereafter against disease and ends at 12 o'clock noon on date any renewal is due, unless premium is paid on or...