Court Opinion

ID: 9850537
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:59:00.380829+00
Date Added: 2024-06-11T09:20:38.909812
License: Public Domain

On Motion fob Rehearing.
Bell, Presiding Judge.
On the subject of the case sub judice an extensive annotation may be found at 2 ALR2d 943, 964. A majority of the cases decided since 1940 have held that where a receipt is issued to an applicant for life insurance purporting to effect immediate coverage if the company approve the application or if the company be satisfied as to the applicant’s insurability, a binding contract for interim insurance exists prior to the company’s approval of the application or determination as to its satisfaction. For cases which have expresssed a modern view of this subject see: Gaunt v. John Hancock Mut. Life Ins. Co., 160 F2d 599 (1947), cert. den. 331 U. S. 849 (67 SC 1736, 91 LE 1858); Liberty Nat. Life Ins. Co. v. Hamilton, 237 F2d 235 (1956); Metropolitan Life Ins. Co. v. Grant, 268 F2d 307 (1959); Johnson v. Equitable Life Assur. Society, 275 F2d 315 (1960); Wood v. Metropolitan Life Ins. Co., 193 F. Supp. 371 (1961), aff’d 302 F2d 802; Union Life Ins. Co. v. Rhinehart, 229 Ark. 388 (315 SW2d 920) (1958); Ransom v. Penn. Mutual Life Ins. Co., 43 Cal. 2d 420 (274 P2d 633) (1954); Wernecke v. Pacific Fidelity Life Ins. Co., (Cal. App. 1965) 48 Cal. Rptr. 251; Simpson v. Prudential Ins. Co., 227 Md. 393 (177 A2d 417) (1962); Life Ins. Co. of North America v. De Chiaro, 68 N. J. Super. 93 (172 A2d 30) (1961); Allen v. Metropolitan Life Ins., 44 N. J. 294 (208 A2d 638) (1965); Duncan v. John Hancock Mut. Life Ins. Co., 137 Ohio St. 441 (31 NE2d 88) (1940); Leube v. Prudential Ins. Co., 147 Ohio St. 450 (72 *811NE2d 76) (1947); Morgan v. State Farm Life Ins. Co., 240 Ore. 113 (400 P2d 223) (1965); McAvoy Vitrified Brick Co. v. North American Life Assur. Co., 395 Pa. 75 (149 A2d 42) (1959); American Nat. Ins. Co. v. Thompson, 44 Tenn. App. 627 (316 SW2d 52) (1957); Life & Cas. Ins. Co. v. Vertrees, 44 Tenn. App. 672 (318 SW2d 559) (1958). See also: Life Insurance Receipts: The Mystery of the Non-Binding Binder, 63 Yale L. J. 523, 532.
Although the application in this case provided, “There shall be no liability for the payment of any benefit unless the application shall have been approved by the Medical Director of the Society. . .” this provision was not operative to limit the company’s liability contrarily to the provisions of the receipt, which stated, “The benefits applied for shall be in effect from the date of the completion of the application, if the applicant is insurable for the amount and plan applied for as a standard risk under the rules and practices of selection of the Society.” It is true that the application and receipt must be construed together. Guest v. Kennesaw Life &c. Ins. Co., 97 Ga. App. 840, 845 (104 SE2d 633). However, it is unnecessary for us to decide whether these two provisions are in conflict, for the holding here is that there is a conditional contract of insurance under the language of the receipt until the company has acted. If the provisions are in conflict, it is well settled that where an insurance contract contains two inconsistent clauses, the one most favorable to the insured will be applied and the other disregarded. New York Life Ins. Co. v. Whitfield, 113 Ga. App. 266, 268 (147 SE2d 829), and citations. Boswell v. Gulf Life Ins. Co., 197 Ga. 269 (29 SE2d 71) is not applicable here. The receipt issued in Bosioell purported to effect immediate coverage only if the amount paid at the time the application was written was not less than five weekly premiums. In that case the applicant had paid only one weekly premium in advance. Fowler v. Preferred Acc. Ins. Co., 100 Ga. 330 (28 SE 398) and Fireman’s Fund Ins. Co. v. Rogers, 108 Ga. 191 (33 SE 954) are also inapplicable. Those cases involved mere applications and oral representations of the companies’ soliciting agents, and did not involve wrritten binders purporting to effect immediate coverage.

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All the judges concur in denying the motion for rehearing, except Quillian, J., not participating.