Court Opinion

ID: 5634719
Source: CourtListenerOpinion
Date Created: 2022-01-11 05:41:39.890757+00
Date Added: 2024-06-11T08:37:56.963672
License: Public Domain

Evans, Judge,
dissenting.
National Diversified, Inc., as plaintiff, sued Carreker, as defendant, in Clarke Superior Court to collect an unpaid balance on a note executed by Carreker on August 3, 1970. Plaintiff sought to recover $646.40 principal, $109.72 interest, and attorney fees and costs. Carreker, defendant, answered and denied being indebted and set forth certain defenses. The case came on for trial. Carreker admitted a prima facie case and assumed the burden of proof. Carreker cross examined two witnesses for plaintiff and introduced certain documentary evidence and rested. Plaintiff moved for a directed verdict which motion was granted. Appeal was taken to this court.
The majority opinion holds that no issue of fact was created by the admission of a prima facie case, and the evidence presented by defendant. I dissent.
A directed verdict should not be granted for the plaintiff unless such verdict is demanded by the evidence with regard to each material issue. State Farm Mut. Auto. Ins. Co. v. Snyder, 125 Ga. App. 352 (187 SE2d 878); Code Ann. § 81A-150 (Ga. L. 1966, pp. 609, 656; 1967, pp. 226, 237, 246, 248); Humble Oil &c. Co. v. Mitchell, 230 Ga. 323, 326 (197 SE2d 126). For two cogent reasons a reversal is required.
1. In this case the appellant defended on the basis that there was a failure of consideration. It appeared from the evidence that the note was entered into on August 3, 1970. This note was given by the defendant for payment to the plaintiff on an insurance policy on the defendant’s life. The policy was with Coastal States Insurance Company. It appears from the evidence that the check to Coastal States Insurance Company was not paid until September 10, 1970. The life insurance contract provided:
"Policy effective. This policy shall not take effect until *516the first premium shall have been actually paid while the Insured is alive and in good health except as modified by the application which is made a part of the contract. Possession of this policy shall not be construed as a waiver of these conditions.” (Emphasis supplied.)
One of the witnesses, who was an employee but not an officer of Coastal States Insurance Company, testified that Coastal States considered that payment was made as of the time the note was entered into and that thus the policy was effective as of August 3, 1970. There was no other evidence other than the statement on the policy that it was effective from August 3, 1970.
In our view the statement by the witness who was not an officer of the corporation constituted no more than a mere conclusion which would not serve to authorize, or in this case demand, a finding that the entering into the note constituted a payment as of August 3,1970. Further, this testimony was completely and absolutely inadmissible. Even an officer of the insurance corporation would not have been allowed to testify as to what the insurance company "considered” to be the effect of the giving of a note instead of actually making payment, as was required by specific language in the policy. Brown v. Mutual Life Ins. Co., 29 Ga. App. 794 (5) (116 SE 559); Life & Casualty Ins. Co. v. Burkett, 38 Ga. App. 328, 336 (144 SE 29); Mutual Benefit Health &c. Assn. v. Bell, 49 Ga. App. 640, 641 (5), 652 (176 SE 124); Metropolitan Life Ins. Co. v. Marshall, 65 Ga. App. 696, 705 (16 SE2d 33); Lawler v. Life Ins. Co. of Ga., 91 Ga. App. 443, 445-446 (4) (85 SE2d 814); Globe Indemnity Co. v. Hall, 94 Ga. App. 628, 629 (95 SE2d 759).
2. If payment was not made until September 10, 1970, then the defendant did not owe for the policy for which he was charged interest from August 3, 1970 to September 10, 1970. The burden of proof was on the defendant to establish that the agreement in question was usurious. Wilkins, Neely & Jones v. Gibson, 113 Ga. 31 (5) (38 SE 374) (84 ASR 204); Harvard v. Davis, 145 Ga. 580, 581 (4a) (89 SE 740). By providing that interest would be charged from August 3,1970 when in fact the policy was only effective from September 10, 1970 would make the contract in excess of 8% per annum since the rate specified *517therein was 8% from August 3,1970. That being true, the appellee would have had to be qualified and licensed under the Georgia Industrial Loan Act. The proof adduced at the trial showed that the appellee was not so licensed. This was enough to prevent a directed verdict for plaintiff. The appellant in this case having established that the charges made under the contract were usurious, it was error for the trial judge to direct a verdict for the appellee for this reason.
Reply to Majority Opinion.
The majority opinion states there are only three issues here, to wit: (1) Was the lender required to be licensed under the Georgia Industrial Loan Act? (2) Was there a total failure of consideration? (3) Was there a partial failure of consideration? The answer to each of these questions must be in the affirmative.
(1) The lender was required to be licensed under the Georgia Industrial Loan Act. The loan was for less than $2,500, and under Code Ann. § 25-302, anyone loaning such sums of $2,500 or less shall be subject to the Industrial Loan Act unless exempt from that Act by Code Ann. § 25-305. Plaintiff was not shown to be such an exempt entity. (T. pp. 11, 12)
Therefore, under Code Ann. § 25-9903, having failed to show that it was licensed under the Georgia Industrial Loan Act, the loan, principal, interest, contract and all are utterly void. See Hodges v. Community Loan &c. Corp., 234 Ga. 427; Hobbiest Financing Corp. v. D. G. Spivey, 135 Ga. App. 353.
(2) Further there was a total and partial failure of consideration. The language inserted into the policy by the insurance company was "Policy effective. This policy shall not take effect until the first premium shall have been actually paid, while the insured is alive and in good health, except as modified by the application which is made a part of the contract. Possession of this policy shall not be construed as a waiver of these conditions.” (Emphasis supplied.)
Of course all vague or ambiguous language in a policy of insurance must be construed most strongly against the insurance company. See Johnson v. Mutual Life Ins. Co. of New York, 154 Ga. 653 (1, 2), 655 (115 SE *51814); Benevolent Burial Assn. v. Harrison, 181 Ga. 230 239 (181 SE2d 829). However, the above language was direct and clear in favor of the insurer. The insurance company here elected to write into its policy that mere possession of the policy did not give it effect in favor of the holder of same; but that the first premium shall have been actually paid before the policy takes effect.
The note by Carreker to the insurer was executed on August 3, 1970. But the check given to pay this note was not paid until September 10,1970. A check is not considered payment until it is presented to the bank and is paid; and if there is any dispute as to the "intention” of the parties about whether the check shall be considered payment, this is exclusively a question for the jury. Rossville Federal Savings &c. v. Chase Manhattan Bank, 223 Ga. 188, 190 (3) (154 SE2d 243).
In this case, it is true that an employee (not an officer) of the insurance company undertook to give completely inadmissible testimony that the insurance company "considered” payment was made at the time the check was given (not when it was paid by the bank) but unfortunately for its position, both the law and the language inserted in its policy completely negate this position.
The majority opinion points out that the holder of the policy wrote the insurance company that he was covered on August 26 that "my policy is in force and I am fully covered.” But the insurance company did not reply and thus did not agree with him; but to the contrary left the damaging language unmodified in its policy that the policy was not effective until the first premium was paid which was not until SeptémbérlO; 1970.
There is at the very least certainly a jury question here as to whether the holder of the policy was covered from August 3, 1970 until his check was paid on September 10,1970. And yet the insurance company sued him for a note which was for coverage from August 3,1970 when he had no such coverage until September 10. How can it possibly be seriously contended that the trial judge should have directed a verdict in favor ofí the insurance company?