Case Name: LIFE AND CASUALTY INSURANCE COMPANY OF TENNESSEE v. JORDAN
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1943-02-17
Citations: 69 Ga. App. 287
Docket Number: 29763
Parties: LIFE AND CASUALTY INSURANCE COMPANY OF TENNESSEE v. JORDAN.
Judges: MacIntyre, J., concurs.
Reporter: Georgia Appeals Reports
Volume: 69
Pages: 287–302

Head Matter:
29763.
LIFE AND CASUALTY INSURANCE COMPANY OF TENNESSEE v. JORDAN.
Decided February 17, 1943.
Adhered to on rehearing April 2, 1943.
William L. Clay, for plaintiff in error.
Aaron Kravitch, Anderson Ulmer, contra.

Opinion:
Gardner, J.
1. The demurrers general and special, the objections to evidence, the alleged errors of omission and commission regarding the charge of the court, and the assignments of error in the general grounds of the motion for new trial, all crystallize in two issues: (a) Under the pleadings and the facts, was the verdict authorized under the law? (b) If so, under the pleadings and the evidence was that portion of the verdict for the penalty and attorney's fees warranted as a matter of law?
(a) We should keep in mind that the application was not made a part of the policy. It is also well to note that the application contained no stipulation with reference to the payment of premiums or the kind of receipt to be issued, as was contained in the policy and pleaded as a defense by the insurer. This court said, in Life & Casualty Insurance Co. v. Brockett, 67 Ga. App. 837, 843 (21 S. E. 2d, 510): "It must be kept in mind that it is the law and the policy of this State as to limitations of authority of an insurance agent which are contained in the policy, and where such limitations are contained only in the policy, that the limitations refer to matters which occur subsequently to the issuance and deliv ery of the policy. See Mechanics & Traders Insurance Co. v. Mutual &c. Asso., 98 Ga. 262, 266 (25 S. E. 457), and Johnson v. Ætna Insurance Co., 123 Ga. 404 [51 S. E. 339, 107 Am. St. R. 92], . . citing the Mechanics & Traders Co. case, supra. . . Interstate Life & Accident Co. v. Bess, 35 Ga. App. 723 (134 S. E. 804)." While it is true that the above cases dealt with imputation of knowledge to the insurance company through its soliciting agent, we feel that the same reasoning is with equal force applicable to the situation presented under the facts of this case, at least to the extent of refusing a tender of the first premium, and the kind of receipt required in the policy, and delivering the policy by the soliciting agent. In such event we do not think that the insured, in paying the first premium to the soliciting agent simultaneously with the delivery of the policy, should be held to a strict compliance contained in the policy with reference to the payment of premiums, any more so than an insurance company, by a stipulation in the policy, could relieve itself of knowledge which the agent obtained in the inception of the contract as dealt with in the cases hereinbefore cited. "Under the facts of this case, without a stipulation to the contrary in an application, the agent was authorized to deliver the policy while the insured was in good health, and receive the payment of the first premium, without issuing a receipt with all the formalities as prescribed in the policy only. As to subsequent premiums, the rule might be different. Therefore, if in the instant case the agent was authorized to receive the premium and deliver the policy, was he authorized to bind the insurer by a proper tender and refusal of tender of the premium ? We think so.
The petition alleged that a tender was made. The answer denied it. The answer contended that the policy was left with the insured for his examination only. The jury resolved the issue in favor of' the plaintiff. The court, in its charge, fairly and fully presented this issue. Let us next inquire whether there is any authority of law to sustain the validity of such tender. In Southern Life Insurance Co. v. Kempton, 56 Ga. 339 (3), 343, the Supreme Court said: "The court did not err on the facts hereinbefore stated in declining to charge: 'That after the deceased had become seriously ill, it was too late for him to bind the defendant by a tender of the premium, and the defendant was not bound to issue the policy after such a change in the health of the applicant;' nor was it error in the court to charge 'that if the deceased made an application for insurance in regular form, and the same was accepted by the defendant, and a policy of insurance was issued and placed in the hands of an agent for delivery to the insured upon payment of the premium, and said premium was paid or tendered by the insured, or any agent for him, the defendant is bound for-the amount of the policy, with interest from the time specified in said policy of insurance. . . It is true that the policy says that the first cash premium must be paid before it takes effect; but the facts here show a waiver of such payment, and an assurance to Scales that he would be insured from the date of the policy 'anyhow,' and we hold that this is such a case as demanded the reception of the money and the entire completion of the contract according to equity and good conscience. It would'be unjust, we think, to the dead, and to the family he left, not so to hold; and we are gratified that we are enabled by the law and the principles of equity so to hold without doing violence to either."
In Mitchiner v. Union Central Life Insurance Co., 185 Ga. 194, 196 (194 S. E. 530), the court held: "Even though, in accordance with the general rule that a proper and continuing tender of the amount of a debt is the equivalent of its payment, a tender of a first premium on a life-insurance policy would ordinarily suffice (Going v. Mutual Benefit Life Ins. Co., 58 S. C. 201, 36 S. E. 556; 37 C. J. 403), yet such a mere tender will not operate as a compliance with an insurance contract, so as to render the policy effective, where, as here, the contract expressly provides that before the insurance shall take effect, the first premium must not only be paid, but be 'accepted by the company or its authorized .agent.' White v. Metropolitan Life Ins. Co., 63 Utah, 272 (224 Pac. 1106); 37 C. J. 404." Note the phrase, "a tender of a first premium on a life-insurance policy would ordinarily suffice." We have examined the record in the Mitchiner case, and find that the application, which was made a part of the policy, provided that the first premium must not only be paid in cash, but accepted by the company or its authorized agent. We cite this case for the proposition that a tender of the first premium to an authorized agent and his refusal to accept it constitute a waiver of the cash payment of the premium. As above stated, there is no application in the instant ease with any such provisions as appeared in the Mitchiner ease. See the authorities cited by the court in that case as to tender. This question was again dealt with in McKenzie v. Northwestern Mutual Life Insurance Co., 26 Ga. App. 225 (105 S. E. 720), thus: "Where a policy of life insurance provides that the application therefor is made a part of the policy, and the application contains the stipulation that it is understood and agreed that if the first premium for the insurance applied for is not paid to the agent at the time of making the application, no liability shall exist until a policy shall have been issued and delivered to the applicant and the first premium thereon actually paid during his lifetime, and where it appears that the application for the insurance was signed by the applicant while in a state of good health but that the first premium was not paid at that time, and that a policy of insurance was, issued by the insurance company and deposited in the mail, for delivery by a local agent upon the payment of the first premium thereon, and that this premium was never paid, but a tender thereof was made to a local agent (who had authority to collect the first premium on the policy) when the applicant was upon his deathbed and only five or six hours before he died, and that this tender was refused by the agent, and the policy never delivered, either actually or constructively, to the applicant, no liability upon the policy existed. This is true notwithstanding the absence of any stipulation in the policy, or the application therefor, that the applicant must be in a state of good health at the time of the delivery of the policy and the payment of the first premium thereon." It will be noted that the application was made a part of the policy, which distinguishes it from the case at bar. Nevertheless the court strongly intimated that had the applicant not been in extremis at the time of the tender, the tender would have been equivalent to payment.
Counsel for the insurer cite Croghan v. New York Underwriters' Agency, 53 Ga. 109, Ramspeck v. Pattillo, 104 Ga. 772 (30 S. E. 962, 42 L. R. A. 197, 69 Am. St. R. 197), Phœnix Insurance Co. v. Hamilton & Co., 110 Ga. 14 (35 S. E. 305), Murphy Hardware Co. v. Rhode Island Insurance Co., 153 Ga. 273 (111 S. E. 808), and Reserve Loan Insurance Co. v. Phillips, 156 Ga. 372 (119 S. E. 315). All of those decisions dealt with the question of dual agency, and are not applicable to the facts of the case at bar since no such question is here involved. Counsel for the insurer fur ther cite Hutson v. Prudential Insurance Co., 122 Ga. 847 (50 S. E. 1000); Hamilton v. Phœnix Insurance Co., 111 Ga. 875 (36 S. E. 960); Reese v. Fidelity Mutual Life Asso., 111 Ga. 482 (36 S. E. 637); Mutual Reserve Fund Life Asso. v. Stephens, 115 Ga. 192 (41 S. E. 679); Stephenson v. Empire Life Insurance Co., 139 Ga. 82 (76 S. E. 592). The Hutson decision did not deal with the payment of a first premium. The others were based on the principle announced in Reese v. Fidelity Mutual Life Asso., supra. In that case the stipulation was in the application and the policy. Stephenson v. Empire Life Insurance Co., supra, which counsel for the insurer very earnestly urges as controlling in his favor, shows, upon an examination of the record in the office of the clerk of the Supreme Court, that the issue so made was based on the stipulation in the application which was made a part of the policy. The facts in these cases distinguish them from the instant case. We find no merit in any assignment of error on the overruling of any of the grounds of the demurrers, or on a failure to charge, or on the charge as given, or on the admission of evidence, or in the general grounds, in so far as the verdict for the face amount of the policy in favor of the beneficiary is concerned.
(b) This brings us to consider whether the judgment for attorney's fees and penalty is sustainable. Under the record, we do not think that such a case was presented as would sustain a verdict for attorney's fees and penalty as prescribed under our law. The test is whether the refusal to pay is frivolous and unfounded. We think the facts presented a situation that is somewhat unusual. The plaintiff contended that the policy was delivered to her without her paying the full amount of the first premium, although she tendered it to the agent. The company contended that the policy was left for examination only. This clearly made a question of fact to be determined by a jury. There was evidence to sustain either contention. We do not think the law ever intended to penalize insurance companies for desiring to have such issues of fact as are contained in this record submitted to a jury for determination. We think that portion of the verdict for the $250 penalty and the $333.33 attorney's fees was without authority of law, under the evidence. If the plaintiff will write off from the judgment the penalty and attorney's fees before or at the time the remittitur is made the judgment of the court below, the judgment is affirmed; otherwise it is reversed.
Judgment affirmed on condition.
MacIntyre, J., concurs.