Court Opinion

ID: 5625721
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:52:23.935421+00
Date Added: 2024-06-11T08:37:28.031392
License: Public Domain

ON MOTION EOR REHEARING.
That the draft in this case was held by Winton, under the facts of this case, does not alter the rule. In National Benefit Life Ins. Co. v. Brown, 41 Ga. App. 741 (154 S. E. 469), it was said: “Under the ruling . . in Veal v. Security Mutual Life Ins. Co., 6 Ga. App. 721 (65 S. E. 714), the retention by an insurance company of a dishonored insurance-premium check, coupled with a claim of liability thereon as against the insured, amounting to a claim of ownership of the check by the company, will constitute an acceptance of the check as in payment of the premium, such as will prevent a forfeiture of the policy. The reason for such a variance from the general rule [italics ours], that checks are not accounted payment until they themselves are paid, is based upon the fact that no obligation rests on the insured to pay the premium, other than that such payment constitutes a condition precedent to his maintenance of the policy, and that upon a tendered check being dishonored the company may elect either to treat the premium as unpaid and the policy as lapsed, or, by laying claim to the check as an obligation against the insured, continue the policy in force by virtue of the check being treated as payment. But in order to give this principle effect, the check must be accepted in lieu of actual payment, so as to give the insurer the absolute right to hold the drawer of the check liable thereon (Chandler v. American Cen*700tral Life Ins. Co., 27 Ga. App. 810, 109 S. E. 919), tbe crucial test in any given case being whether or not the check was actually accepted as in payment of the premium. 40 A. L. R. 406, 423 (n. 4).” The general principle applies to the facts of the present case. Winton was given a worthless draft in payment for his mules. He relied on the representations of Butler that the draft would be paid on presentation. Its payment, under the general principle, was a condition precedent to the passing of the title to the mules into Butler. There is no evidence that Winton agreed to accept a worthless draft in payment. As soon as lie found the draft would be dishonored, he took possession of his mules. Having thus acted, the draft ceased to be an obligation against Butler, irrespective of what might be its evidentiary value in an action of a different kind, between the parties. In Bank v. Kohl, supra, a buyer bought certain amounts of corn from farmers and gave therefor checks which proved to be worthless. The court said: “Did the two checks given by the grain company and dishonored by the bank constitute payment for the corn? The answer is no, you can not buy good corn with bad checks. . . The presumption that the checks were not received in payment is made conclusive here by the fact that the farmers were promised and understood they were to be paid for the corn on delivery. They did not agree to accept waste paper for cash. The buyer did not acquire title, no credit was extended, nor was it so intended. Title to the corn remained in seller.” Butler never acquired title to the mules in this case by signing drafts which were dishonored.