Curry v. Washington National Insurance
194 S.E. 825
Ga. Ct. App.
1937
Check Treatment
Guerry, J.

1. Sinсe the very definition of a contract of insurance imports the assumption of a risk by the insurer аnd a payment of a consideration therefor on the part of the insured, if, because of the invalidity thereof, there has been no assumption of risk by the insurer under the contract, the prеmiums paid should ordinarily be returned to the insured. See Reserve Loan Life Insurance Co. v. Davis, 23 Ga. App. 571 (99 S. E. 42). It is the general rule that where a contraсt of insurance is void ab initio because of material misrepresentations made by the insured in thе application attached to and made a part of the policy, and the insurer successfully defeats a recovery on the policy by reason ‍‌‌​‌‌‌​‌‌‌​​‌‌‌‌​​​​​​‌​​​​‌​​​​‌‌‌​‌‌​​‌‌​​​‌​‌‍of such material misreprеsentations, the insured is entitled to a return of the premiums paid thereunder, unless the insured was guilty of aсtual fraud; that is, that in making the misrepresentations there was a wilful purpose to deceive оn the part of the insured. Columbian National Life Insurance Co. v. Mulkey, 146 Ga. 267 (91 S. E. 106); Harris v. Bankers Health & Life Insurance Co., 40 Ga. App. 679 (150 S. E. 860); Seaback v. Metropolitan Life Insurance Co., 274 Ill. 516 (113 N. E. 862); Bosse v. Knights &c. of Security, 204 Mo. App. 18 (220 S. W. 993). While, in a suit to enforce the terms of the policy, where an agent of the insurer, after being informed by the insured that she suffered from a goiter and high blood pressure and for that reason she did not believe that she was an insurable risk, nevertheless assured her that she was insurablе and that his company would issue her a policy of health and accident insurance, and thеreupon filled out the application for the insured, who was illiterate and could neither rеad nor write, and signed her name thereto, in which application such agent made materiаl false representations concerning the insured’s physical condition, and upon which application the policy was issued to her, the insured having made no effort to have the application read to her, and would be held to have had knowledge of the statements made in the application (Curry v. Washington National Insurance Co., 54 Ga. App. 590, 188 S. E. 741; Wilkins v. National Life & Accident Insurance Co., 23 Ga. App. 191, 97 S. E. 879; National Accident & Health Insurance Co. v. Davis, 50 Ga. App. 391, 178 S. E. 320), and since the policy and application contained provisions to the effect that the insurer “is ‍‌‌​‌‌‌​‌‌‌​​‌‌‌‌​​​​​​‌​​​​‌​​​​‌‌‌​‌‌​​‌‌​​​‌​‌‍not bound by any statement Or by the knowledge of any statement made to or by any agent of *811tbe company unless written hereon/’ there could be no recovery thereunder, yet in such a case, the insured is not guilty of such fraud as would prevent a recovеry of the premiums paid thereon. In a somewhat similar situation the Supreme Court of the Uhited States said: “If the poney is void because of misrepresentations of material facts, in that the agent fraudulently inserted in the application false answers, when the answers made by the insured were truthful, and both insurer and insured have acted bona fide, and have been deceived thereby, the policy should be canceled and the premiums returned.” New York Life Insurance Co. v. Fletcher, 117 U. S. 519 (6 Sup. Ct. 837, 29 L. ed. 934). See also Clark v. Manufacturеrs Ins. Co., 8 How. (U. ‍‌‌​‌‌‌​‌‌‌​​‌‌‌‌​​​​​​‌​​​​‌​​​​‌‌‌​‌‌​​‌‌​​​‌​‌‍S.) 235 (12 L. ed. 1061); Scott v. Niagara Ins. Co., 25 U. C. Q. B. 119; 32 C. J. 1237, § 411; 14 R. C. L. 959, § 132 and cit.

3. “An election of remedies is defined as the choosing between two or more different and ‍‌‌​‌‌‌​‌‌‌​​‌‌‌‌​​​​​​‌​​​​‌​​​​‌‌‌​‌‌​​‌‌​​​‌​‌‍coexisting modes of procedure and relief allowed by law on the same state of facts.” 9 B. 0. L. 956; Hand v. Brown, 144 Ga. 373, 374 (86 S. E. 1080), and cit. The basis of the. doctrine of election of remedies is an estoppel, to wit, that a party can not, in the assertion or prosecution of his rights, occupy inconsistent positions. There must therefore actually exist two inconsistеnt remedies. ' If a suit be prosecuted on an alleged cause of action which in fact did nоt exist, there can not be, as to such, an election of remedies. Louisville &c. R. Co. v. Pferdmenges, 8 Ga. App. 81, 83 (68 S. E. 617); Puett v. Edwards, 17 Ga. App. 645 (88 S. E. 36); Sparks v. Fort, 29 Ga. App. 531, 537 (116 S. E. 227); Rowland Co. v. Kell Co., 27 Ga. App. 107 (107 S. E. 602); Hawthorne v. Pope, 51 Ga. App. 498, 500 (180 S. E. 920). Thus, where an insured prosеcutes a suit against the insurer for the recovery of disability benefits provided for therein, and the insurer successfully defends the suit on the ground that the policy is void because of material misreprеsentations made by the insured in the application therefor attached to and made а part of the policy, there never in -fact existed ‍‌‌​‌‌‌​‌‌‌​​‌‌‌‌​​​​​​‌​​​​‌​​​​‌‌‌​‌‌​​‌‌​​​‌​‌‍in the insured any right of action on the policy, and therefore there was no election as between two existing inconsistent remedies, such as would prevent the institution of another suit for a recovery of the premiums paid therеunder, if there had been no actual fraud on the part of the insured as pointed out .abovе. However, by bringing an action on *812the policy for a recovery of disability benefits provided for therein, the insured waived any alleged fraud practiced on her by the agent of the insurer in writing the insurance, and thereby elected to waive any remedy, if any she had, against the insurer therefor; and she could not thereafter prosecute a suit against the insurer for alleged damages оn account of such fraud.

3. Under the above rulings the court erred in sustaining the general demurrer to the petition in SO' far as it sought a recovery of the premiums paid under the policy, but was corrеct in sustaining the demurrer to that part of the petition seeking recovery of certain alleged damages because of the fraud of the agent of the insurer alleged,to have been perpetrated upon the insured in writing the contract.

Judgment affirmed in part and reversed in part.

Broyles, G. J., and MacIntyre, J., concur.