Court Opinion

ID: 3407176
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:23:11.776696+00
Date Added: 2024-06-11T09:24:26.571209
License: Public Domain

The policy in the instant case provided: "No *Page 899 
obligation is assumed by the company prior to the date hereof. Except as elsewhere herein provided, if the insured is not alive or is not in sound health on the date hereof; or if before the date hereof, the insured has been rejected for insurance by this or any other company, order, or association, unless such rejection be specifically recited in the `Space for Endorsements' in a waiver signed by the secretary, then, in any such case, the company's full liability shall be discharged by the payment of the sum of the premiums received hereunder." In MetropolitanLife Insurance Co. v. Hale, 177 Ga. 632 (170 S.E. 875), the policy contained a provision that "if the insured . . has within two years before the date hereof been attended by a physician for any serious disease or complaint, . . the company may declare this policy void, and the liability of the company in the case of any such declaration in the case of any claim under this policy shall be limited to the refund of the premiums paid on the policy." The defendant contends that the court overlooked its second defense "that under paragraph 3 of the policy [which is quoted above] if the insured was not in sound health on the date of the policy, the liability of the company, under the contract, would be limited to a return of the premiums paid," which it tendered into court. This defense was not overlooked; however it might be stated in connection therewith that it is true that "limitation-of-insurance clauses" have been recognized and upheld by his court, as shown by Life  Casualty Insurance Co. v.Carter, 55 Ga. App. 622 (191 S.E. 153), and Gray v. Life Casualty Insurance Co., 48 Ga. App. 80, 82 (171 S.E. 835), cited by the defendant. In such cases the insurer and the insured both have full knowledge that the insured has suffered from some malady, the existence of which is one of the elements that enter into and bring about the particular kind of insurance contracted; and the insurer and the insured agree that for a definite period of time following the issuance of the policy (usually the reasonable period of two years) the insured shall be, so to speak, on probation or under observation, and if he lives and is in good health during the entire period, after such probation or observation period is over the policy will then become binding on the parties for its full amount; but if the insured dies during that period the company's liability extends only to a return of the premiums paid. Life  Casualty Insurance Co. v. Carter,
supra. But such were not the facts in *Page 900 
the instant case. Here the latter part of the "limitation-of-insurance clause" was that the "company's full liability shall be discharged by the payment of the sum of the premiums received hereunder." In the Hale case, supra, the latter part of the "limitation-of-insurance clause" was that "the company may declare this policy void, and the liability of the company in the case of any such declaration in the case of any claim under this policy shall be limited to the refund of the premiums paid on the policy." It seems to us that the "limitation-of-insurance clause" in the present case and the "limitation-of-insurance clause" in the Hale case, supra, are, in legal effect, the same, and that the present case comes under the rule announced in the Hale case and not under the rule announced in the Carter and Gray cases and like cases, where the evidence authorized an inference that the malady was one of the elements that entered into and brought about the particular kind of insurance contracted. Of course, had the jury seen fit to believe the defendant's other defense of fraud in procurement, as contended in its first defense, the company could not be held liable for the face amount of the policy.
Rehearing denied. Broyles, C. J., and Gardner, J., concur.