South Carolina Ins. Co. v. Glennville Bank

• Decision Date: 09 February 1965
• Docket Number: No. 41152,No. 2,41152,2
• Citation: 111 Ga.App. 174,141 S.E.2d 168
• Parties: SOUTH CAROLINA INSURANCE COMPANY v. The GLENNVILLE BANK
• Court: Georgia Court of Appeals

Page 168

141 S.E.2d 168

111 Ga.App. 174

SOUTH CAROLINA INSURANCE COMPANY v. The GLENNVILLE BANK.

No. 41152.

Court of Appeals of Georgia, Division No. 2.

Feb. 9, 1965.

Syllabus by the Court

1. Material amendments to each count of a multicount petition reopens each count to a fresh adjudication of whether the petition sets out a cause of action.

2(a). Where an insurance company fails to give notice of cancellation to a lienholder shown in the policy, the policy is still in effect as to the lienholder although it may have been canceled as to the insured. Code Ann. § 56-2430. The lienholder here was not required, by the cooperation clause of the policy or by the subrogation receipt, to assign the security instruments held by it to the company.

(b). Where the trial court has sustained a motion to dismiss for the wrong reason, the judgment will be affirmed if the motion was good for any reason.

The insurance company brought a three-count action against the bank and Folsom based on the following factual situation. In January, 1961, Folsom obtained a loan from and executed to the bank a note and bill of sale to secure debt on his truck, then procured insurance on the truck through the company's local agent, naming the bank as loss payee. Subsequently, Folsom was sent a notice of cancellation for non-payment of premiums, but none was sent to the bank. After the cancellation, the truck was destroyed by fire, and the bank submitted to the company a proof of loss and a non-waiver agreement. The insurance company then paid the bank $945 and obtained from it a subrogation receipt. Several months later the company demanded that the bank transfer to it the note and security instrument executed by Folsom. This the bank refused to do.

Count I, against the bank and Folsom jointly, sought recovery for breach of the subrogation agreement and a policy provision. ¹ In count II recovery was sought against the bank alone for the same breach. In count III, Folsom alone was the defendant. He and the bank filed general and special demurrers. Subsequently to these demurrers buy prior to the time they were passed on by the trial judge, the company amended its petition by attaching copies of all the documents mentioned above (which had not been attached to the original petition) and by adding count IV for money had and received against the bank alone. The trial judge overruled all of the general demurrers and most of the special demurrers. The company again amended, striking Folsom as a defendant in count I and eliminating count III in its entirety. The bank's oral motion to dismiss was sustained and the company excepts.

Jones & Kemp, Charles M. Jones, Hinesville, for plaintiff in error.

Dan S. Cowart, Glennville, John P. Rabun, Reidsville, for defendant in error.

EBERHARDT, Judge.

1. The first proposition argued by the insurance company is that the overruling of the bank's first general demurrers established the law of the case that the petition set out a cause of action. It is pointed out that no exception was taken to this order.

This position is the correct rule under some circumstances. However, the cases are legion that demurrers filed before a material amendment to the petition do not cover the amended petition. E. g. Bruce v. Roberts, 219 Ga. 394, 133 S.E.2d 327 and citations; Jackson's Mill, etc., Co. v. Holliday, 108 Ga.App. 663(1), 134 S.E.2d 563 and citations. Such demurrers become, in that colorful judicial phrase, 'extinct and nugatory.' Renewal of demurrers to the original petition must be shown by the record although the trial judge may have considered the amendment in passing on the demurrer. National Surety Corp. v. Hunt, 105 Ga.App. 101, 123 S.E.2d 558 and citations.

Thus, the materiality of the two amendments is determinative of this issue. In the original count I it was alleged that the policy was cancelled 'pursuant to section 24' of its conditions. The amendments attached the policy, which set out section 24 in full, and were thereby material as to this count. In count II a portion of the subrogation agreement was alleged and the amendments attached the entire agreement containing additional provisions which were material. Count III was stricken. Count IV was itself a part of the amendment and the unrenewed demurrers did not purport to attack it. Furthermore as to all counts, the proof of loss attached in the amendments bears the notation 'settled in compromise,' a material recital.

Thus, there has been no law of the case adjudication of the pending amended counts and the trial court was not bound by its prior overruling of the general demurrers.

2(a). The insurance company's position on the merits fares no better. Its pleadings affirmatively show that the bank was a lienholder and that no notice of the cancellation of the policy was given it. The 1960 Insurance Code was effective January 1, 1961. Code Ann. § 56-115. The policy involved was issued February 1, 1961. Section 56-2430 provides, inter alia: 'Notices of cancellation of policies protecting the interest of the insured and any lienholder shall be delivered or mailed to the last addresses of record as provided herein to the insured and to the lienholders shown in the policy * * *' (Emphasis added). The notice of cancellation sent the insured was ineffective as to the bank and the insurance company remained liable to it. Thus, the action for money had and received (count IV), brought on the basis that the bank was not entitled to the money in the first instance, did not set out a cause of action. Queen Insurance Co. of America v. Nalley Discount Co., 215 Ga. 837, 114 S.E.2d 21 holding that a lienholder is not entitled to notice of...