Walker v. General Ins. Co., 20344

• Decision Date: 06 February 1959
• Docket Number: No. 20344,20344
• Citation: 214 Ga. 758,107 S.E.2d 836
• Parties: Bryan S. WALKER v. GENERAL INSURANCE COMPANY et at.
• Court: Georgia Supreme Court

Page 836

107 S.E.2d 836

214 Ga. 758

Bryan S. WALKER v. GENERAL INSURANCE COMPANY et at.

No. 20344.

Supreme Court of Georgia.

Feb. 6, 1959.

Rehearing Denied March 6, 1959.

Syllabus by the Court.

1. The facts alleged fail to show any right in the petitioner to proceed against the insurance company on the policy of insurance.

2. The respective rights of the petitioner and the defendant Little as related to the property involved and the money collected by Little from the insurance company cannot be determined in the present case from the facts alleged.

3. The settlement by the insurance company with Little was with a person authorized to receive the money, and would constitute an accord and satisfaction of the policy of insurance until vacated and set aside for fraud, accident, or mistake.

Bryan S. Walker filed an equitable petition against J. B. Little, individually, and as executor of the will of Louise H. Little, deceased, and General Insurance Company of America. In substance, the petition alleged: On April 8, 1958, the petitioner entered into a contract to purchase described real estate from Little, as executor of the will of Louise H. Little, a copy of the contract being attached as an exhibit. At that time the petitioner paid to Little $2,660. By mutual consent of the parties, the date for closing the contract was extended to June 8, 1958. After the execution of the contract, the petitioner entered into possession of the property and commenced making improvements on the dwelling house. Subsequently to his entering into possession, the property was seriously damaged by fire. Prior to the sale, Little had caused the property to be insured with General Insurance Company of America in the amount of $15,000, and with Southern Mutual Insurance Company in the amount of $5,000. The policies are in the possession of the defendants, and are not accessible to the petitioner. Prior to the time provided in the contract of sale, as extended, the petitioner tendered to Little the remaining amounts due under the contract, and at the same time tendered to him for execution an executor's deed. He refused the tender of money, and refused to execute the deed. The petitioner called upon him to take steps to compel payments of the amounts due under the policies, but he refuses to do so. Little holds the claims under the insurance policies as trustee for the petitioner, and is bound to proceed against General Insurance Company of America, which he has refused to do. It will cost approximately $15,000 to repair the property. Prior to the fire it was worth $16,000, and it is now worth $1,000. The petitioner has suffered a loss of approximately $15,000. A court of equity has general jurisdiction of this controversy through its inherent jurisdiction of matters between trustee and beneficiary. General Insurance Company, with full knowledge of the facts, has failed and refused to settle the claim, and such failure was activated by bad faith rather than by any genuine doubt of its liability.

The prayers were: for process; for second original to be served on General Insurance Company of America; for rule nisi directed to Little to show cause why he, as trustee, should not surrender to the petitioner the policy of insurance; that the petitioner be permitted to proceed against General Insurance Company of America for its pro rata share of the loss, to wit, $11,666.66; that the petitioner recover $2,900 penalty for bad faith, together with reasonable attorney's fees; that the defendant be required to discover under oath the policy of insurance; and for further relief.

General Insurance Company of America filed its general and special demurrers to the petition. Thereafter the petitioner filed an amendment, in which it was alleged: Subsequently to the filing of the suit, the defendant Little filed a proof of loss alleging that the total amount of loss was $7,660, and claimed from General Insurance Company the sum of $5,745. Proof of loss was filed by Little after discussion with the defendant insurance company, and after both defendants had been served with the petitioner's suit. The filing of the proof of loss and the payment thereof resulted from a collusive agreement or conspiracy between the defendants with full knowledge of the rights and claims of the petitioner, and for the purpose of fraudulently defeating the petitioner's claim. On June 4, 1958, and within 60 days from the date of the fire, the petitioner was advised by the agent of General Insurance Company of America that the company had no interest in making any settlement with the petitioner, a copy of the notice being attached as an exhibit to the petition. This act of the defendant obviated the necessity of filing proof of loss. The prayer of the amendment was that it be allowed and ordered filed, subject to demurrer.

General Insurance Company of America renewed its demurrers to the petition as amended, and filed additional demurrers. A second amendment, attaching a copy of the policy of insurance, was filed by the petitioner. The insurance company renewed grounds 1 through 7 of its demurrers to the petition as finally amended. The trial judge sustained all of these grounds and dismissed the action. The exception is to this judgment.

Smith, Kilpatrick, Cody, Rogers & McClatchey, Hoke Smith, Atlanta, E. R. Lambert, Madison, for plaintiff in error.

A. Walton Nall, Atlanta, A. F. Jenkins, Madison, John T. McTier, Atlanta, for defendants in error.

HEAD, Justice.

1. A contract of fire insurance to be valid must be in writing. Code § 56-801. 'As an assignment of an insurance policy with the assent of the company is a new contract of insurance between it and the assignee, it must, under the provisions, of this section of the Code [now 56-801], be in writing.' St. Paul Fire & Marine Insurance Co. v. Brunswick Grocery Co., 113 Ga. 786, 790, 39 S.E. 483, 485; Steele v. Gatlin, 115 Ga. 929, 931, 42 S.E. 253, 59 L.R.A. 129; Sprouse v. Skinner, 155 Ga. 119, 123, 116 S.E. 606. Generally, 'one other than the person to whom it was issued cannot, in his own name, maintain an action thereon, unless the policy has been duly assigned to him in writing.' National Fire Ins. Co. v. Grace, 106 Ga. 264, 32 S.E. 100; Fields v. Continental Ins. Co. of New York, 170 Ga. 28, 152 S.E. 60. In the present case there are no allegations of any negotiations, agreement, or contract between the petitioner and Little as to the policy of insurance prior to the loss, and no legal transfer by written assignment of the policy of insurance is alleged. The petitioner, therefore, fails to allege or show any right to proceed in his own name against the insurer.

2. It is alleged that the petitioner has called upon Little to 'compel payment of the amounts due,' and that he refuses to do so. The petitioner prays that Little, as trustee, show cause why he should not surrender the policy of insurance to him. Whether or not Little, the seller, ever...