W.P. Harper & Co. v. Ginners' Mut. Ins. Co.

• Decision Date: 04 May 1909
• Docket Number: 1,475.
• Parties: W. P. HARPER & CO. v. GINNERS' MUT. INS. CO.
• Court: Georgia Court of Appeals

64 S.E. 567

6 Ga.App. 139

W. P. HARPER & CO. v. GINNERS' MUT. INS. CO.

No. 1,475.

Court of Appeals of Georgia

May 4, 1909

Syllabus by the Court.

Where an insurance company makes a proposal by letter to renew a policy of insurance on terms and conditions stated in the latter, and the insured retains the policy, but make no reply to the letter, and does not pay the premium, or indicate in any manner an acceptance of the policy, until after the happening of a fire several months after the proposed insurance, there is no completed contract of insurance. There must be some act of acceptance, binding on the party accepting, as well as on the party proposing, to make a contract.

[Ed Note.-For other cases, see insurance, Dec. Dig. § 145 ^[*]]

Error from City Court of Washington; S. H. Hardeman, Judge

Action by W. P. Harper & Co. against the Ginners' Mutual Insurance Company. Judgment for defendant, and plaintiffs bring error. Affirmed.

F. H Colley and Wm. Wynne, for plaintiffs, in error.

Cobb & Erwin and R. C. Norman, for defendant in error.

HILL C.J.

Harper & Co. sued the Ginners' Mutual Insurance Company on a policy of insurance covering their cotton gin. The insurance company made three defenses: (1) That there was no complete contract of insurance; (2) that, if there was a complete contract of insurance, it had lapsed by failure to pay the premium; and (3) that, if the contract of insurance had been completed, it was avoided and forfeited by the operation of the gin at night in violation of its terms and conditions. At the conclusion of the evidence the court directed a verdict for the defendant, and this is the error assigned.

Was there, under the facts, a complete contract of insurance? The facts show that the insurance company had issued to Harper & Co. a policy of insurance covering this cotton gin, which expired on September 22, 1907. Just before the expiration of this policy the secretary of the insurance company, without any knowledge or intimation that Harper & Co. desired the policy renewed, voluntarily wrote a renewal policy covering the same property, and on August 13, 1907, mailed this renewal policy to Harper & Co., accompanied by the following letter (omitting immaterial parts): "Inclosed find policy No. 964 covering $2,250 upon your ginning outfit. *** For some reason unknown to us, you allowed your old policy to lapse on our 15 per cent. call. We have, however, taken the liberty of renewing the same from the date upon which it would have expired, had it been kept in force, namely September 22. Attached to this policy you will find our regular form 25 per cent. dividend note and receipt for policy. Kindly sign and return to us, together with your check for $88.59, same being 75 per cent. premium due and payable upon delivery of policy." This letter was duly received by Harper & Co., but its receipt was not acknowledged, and the requests as to signing the premium note and receipt for policy and sending check for $88.59, being the 75 per cent. premium due and payable upon delivery of policy, were entirely ignored. Thereafter, on September 26, 1907, the secretary of the insurance company wrote Harper & Co. the following letter (omitting immaterial parts): "We mailed you some weeks ago policy covering your ginning outfit, and as yet we have received no reply from you. Our records show that the premium under this policy is $118.13. After deducting the amount of dividend, the balance due is $88.60. We wish to say that we are endeavoring to close up all open accounts, and, if you are not in a position to pay this premium, we will be glad to carry same for you 30 or 60 days from date of policy, without interest. *** If you wish your matter continued, kindly advise us, and we will furnish you with blank note; otherwise, we will thank you for remittance covering the 75 per cent. of premium as above indicated. Trusting that this may be satisfactory, and awaiting your reply, we are," etc. Harper & Co. admitted receiving the foregoing letter, and admitted that they made no reply, but had absolutely ignored it. On the evening of October 17, 1907, about dark, the ginhouse described in the policy was destroyed by fire. Proofs of loss were duly furnished, and, the company refusing to pay the policy for the reasons above stated, this suit was brought.

The secretary of the company testified that, having received no response from either one of the two letters above quoted prior to the day of the fire, he marked upon the insurance company's policy register, at the place where this policy had been registered, the words "Not taken" in red ink; and the record was introduced in evidence and showed this entry. Harper admitted the he had never, up to the time of the trial, paid or tendered any premium to the insurance company. He did not testify that he had accepted the policy, or had intended to accept the policy, and pay for it; but he insisted that the contract of insurance was complete because of the following facts: That...