97 Ga. App. 200 | Ga. Ct. App. | 1958
It will be noted that the plaintiff sues on the notes here involved as a bona fide holder for value before maturity. Defendant contends that the plaintiff is not a bona fide holder for value before maturity and, therefore, is not entitled to recover.
The agreement between the defendant (insured and maker) and the Morgan & Morgan Insurance Agency (payee and indorser) is set forth in the face of each of the "conditional acceptance premium notes” sued on.
This agreement provides expressly and by necessary implication the following: (a) The notes are “tendered” to the payee, Morgan & Morgan Insurance Agency “by the maker or makers under the following agreement”; (b) The maker tenders these notes “in settlement of certain premiums ‘. . .’ covering . . . insurance policy or policies issued to the maker by Morgan, etc.”; (c) “If any of these notes are not paid when due . . . Morgan & Morgan Insurance Agency reserves the right to declare all unpaid notes due and immediately cancel all policies in connection with which these notes are given in settlement of premiums”; (d) “All unearned premiums by reason of any such cancellation shall be the property of Morgan”; (e) “Failure to pay this note . . . shall at the option of Morgan & Morgan Insurance Agency, constitute a request for cancellation on the customary short-rate basis”; (f) Implicit in the foregoing express agreements is the obligation of Morgan & Morgan Insurance Agency to pay the full premium or premiums to the Insurance Company or Companies “covering . . . insurance policy or policies issued to the maker by Morgan, etc.”
Otherwise, there could never be any unearned premium in the hands of the insurer in the event of a cancellation as contemplated and provided for in the agreement above quoted.
Furthermore, the notes are entitled on their face as being
Morgan & Morgan Insurance Agency did not pay the premiums to the involved insurance company and there was a failure of consideration and to that extent the bank, as transferee, is not entitled to recover.
Code § 14-201 reads: “An instrument to be negotiable must conform to the following requirements: (1) It must be in writing and signed by the maker or drawer; (2) It must contain an unconditional promise or order to pay a sum certain in money, provided that a promissory note may be made payable in cotton or other articles of value; (3) It must be payable on demand or at a fixed or determinable future time; (4) It must be payable to order or to bearer; and, (5) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.”
Almost the entire argument of the plaintiff is that the notes are negotiable because the notes contain, above all other things, a promise to pay a sum in money and all other things expressed in the notes or concerning the notes are, as to the defendant, surplusage and not binding on the defendant. According to our way of seeing the issue, it is immaterial whether or not the words “promise to pay a sum certain in money at a certain time” are in the notes. We might concede that the plaintiff is correct in this regard. However, the controlling question here is whether or not the facts of which the plaintiff had notice, such as the taking of the notes from the defendant and allegations of facts connected thereto (shown throughout the transaction) indicate that the procuring of the notes by Morgan & Morgan Insurance Agency and the giving of the notes by the defendant was against public policy. These things the plaintiff knew, according to the pleadings in the case. The alleged facts appear in the pleadings and admitted by demurrer show that Morgan & Morgan Insurance Agency represented the Canal Insurance Company of Greenville,
In Hoffman v. John Hancock Mutual Life Insurance Co., 92 U. S. 161 (23 L. ed. 539), the United States Supreme Court said: “An agreement between the agent of an insurance company and an applicant for insurance, whereby the former, without authority from the company, accepted, by way of satisfaction of a premium payable in money, articles of personal property, is a fraud upon the company, and no valid contract against it arises therefrom. . . . Life insurance is a cash business. Its disbursements are all in money, and its receipts must necessarily be in the same medium. This is the universal usage and rule of all such companies. . . The exercise of such a power [taking personal property for his commissions on insurance premiums] by the agent was liable to two objections,—it was ultra vires, and it was a fraud as respects the company. Hoffman must have known that neither Goodwin nor Thayer had any authority to enter into' such an arrangement, and he was a party to the fraud.” This court has cited Hoffman v. John Hancock Mutual Life Insurance Co., supra, in two cases, i.e. New Jersey Insurance Co. of Newark v. Rowell, 33 Ga. App. 552, 554 (126 S. E. 892) and American Insurance Co. of Newark v. Seminole County Board of Education, 51 Ga. App. 808 (181 S. E. 783). In those cases the court said in substance -that premiums must be paid in money or its equivalent.
In view of what we have said hereinabove and authorities
Judgment reversed.