39 Ga. App. 429 | Ga. Ct. App. | 1929
In 1923 E. Hosea Blount et al., as trustees, brought their action against the Penn Mutual Life Insurance Company on a $5,000 policy written on the life of Eansom A. Bell. The trial judge overruled the defendant’s demurrers to the petition, and it excepted. In 33 Ga. App. 642, this court affirmed the judgment overruling the general demurrer and certain special demurrers, but reversed the judgment overruling other special demurrers. When
The crucial question in this case is now reduced to this: Did the insurer ratify its agent’s unauthorized delivery of the policy to the insured? Through their counsel, the parties to the case agreed “that the evidence used in a former trial of this case be read into the record of this case, .with the right to either party to introduce said former testimony in whole or in part, with the further right.to either party to interpose objections to the introduction of any part of said former testimony and have the court’s rulings on such objections entered in the record.” Under the foregoing agreer ment, the testimony of P. W. Thompson, which was substantially as follows, was offered in evidence: On October 1, 1922, P. W. Thompson, local agent for the insurance company at Waynesboro, Ga., delivered to Bansom A. Bell, the insured, a $5,000 life-insurance policy dated September 25, 1922, upon condition that the insured would pay Thompson the premium “at a future date.” On October 7, 1922, Bell returned the policy to Thompson with a request that the beneficiary be changed; and on the same day Thompson sent the policy in a letter to I. T. Heard, general agent of the insurer. In the letter this language was used: “I am returning the policy for Mr. B. A. Bell so that you can have the beneficiary changed as per his request. . . On receipt of this policy with the above correction, he will pay the same. You will note the en-. closed paper that he gave me, the same being signed by him.”
Mr. I. T. Heard transmitted the policy to the home office in a letter dated October 10, 1922, addressed to Harrison S. Gill, supervisor, at Philadelphia. In this letter was a request that the
The rules of the insurer did not permit a policy to be left with an applicant for inspection in advance of the payment of the premium, unless he signed a written form stating that the policy was so delivered. Thompson, the local agent, did not take such writing when he delivered the policy to the insured. The premium was never paid on the policy. The trustees for the beneficiaries in the policy called on Thompson before the insured died and offered to pay the premium, but he refused it on the ground that Bell was not then in good health. (Bell had suffered burns from which he afterwards died.) The trustees then asked Thompson if he considered the policy delivered, and he replied that he did, “with the exception of the premium.” Thompson testified: “I don’t think that I had any correspondence with the company at Philadelphia
When Heard received the new policy with change of beneficiaries, ready for delivery to the insured, Thompson talked over the entire matter with Heard, beginning with his delivery of the first policy to the insured, telling him, among other things, of his refusal to accept the premium from the trustees after the insured had been burned. During this conversation Thompson told Heard, in reply to Heard’s question as to the circumstances under which the first policy'had been delivered, that it was delivered to Bell on condition that he would pay for it on the 14th or 15th, but that he had not done so. This conversation was after these dates. Heard requested Thompson to write him a letter setting out the facts connected with the delivery of the policy, and he wrote that letter on November 7, 1922. The said conversation with Heard while the insured was sick was the first statement made by Thompson of the delivery of the policy to the insured, and the said letter written to Heard at his request was the second. The insured was injured on October 19, 1922, and died on the night of October 21, 1922. Thompson did not know the conditions of the policy, and thought he had a right to deliver the first policy as he did. The second policy was never delivered. It was dated September 25, 1922, which was the date of the original policy. Thompson did not know that the contract of insurance contained this provision: “The contract of insurance shall not be enforced unless the first premium thereon is actually paid during the lifetime and good health of the insured.” Thompson testified in this language: “The premium rate for this policy was .fixed according to the rules of the company, which require that the rate of premium charged will be that corresponding to the age of insured nearest to the premium date of the policy, which in this case was September 25, 1922, the ■nearest birthday of the applicant being October 22, 1922.
Besides the foregoing evidence, the plaintiffs introduced policy No. 1030617, issued by the Penn Mutual Life Insurance Company on the life of Bansom A. Bell for $5,000, and dated September 25, 1922, together with the attached written application for the policy. The following testimony of Pierre Heard was also offered by the
Sidney A. Smith’s testimony, taken by depositions, is substantially as follows: Witness had been secretary of the insurance company since January, 1921. He had no personal knowledge of the insurance matter under consideration. Harrison S. Gill had supervision of the issuing of and pajdng for all policies. Witness knew nothing of Thompson’s extending credit for the first premium of the policy. Neither local nor general agents had authority to write policies or “bind risks.” If a policy is in force and the insured wishes to change beneficiaries, the company requires him to sign a written request to that effect. The “Actuarial Department” would handle the matter, and neither Mr. Gill nor any one in his department would know of it. Mr. Gill handled this case throughout. Smith did not instruct the local agent to make a reduction in the premium proportionate “to this period of twenty-two days from September 25 to October 17. The witness said in this connection: “It is customary with our company to require its patrons to pay premiums for a time when they are getting no protection, as in this case, — for instance, a period of twenty-two days.”
Harrison S. Gill, sworn for the defendant, testified substantially as follows: He had been supervisor of applications and death claims for the company since February, 1921, and his general duties were to pass upon applications and take charge of death claims and the correspondence relating thereto. The procedure followed is this: The application is matched with the medical examination and sent to the medical department. The papers are then returned to Gill’s department for final action, and, if approved, the policy is written in said department and mailed to the general agent. The
Since the policy had never been delivered, as the company understood the situation, and the premium had never been paid, the insurer thought that no liability attached in so far as the policy was concerned; and when Joseph S. Conwell, the company’s counsel, reached the same conclusion, the insurer denied liability under the contract.
Gill testified further that he was familiar “with all phases of this case,” and that neither he nor any officer of the company had any knowledge that Thompson was alleged to have extended credit to the insured, and that no officer of the company waived the requirements of the policy “with reference to the payment of the premium during the insured’s good health, either by writing or orally.” Gill stated that he did not receive “a paper which Mr. Thompson said was signed by Mr. Bell, requesting the change of beneficiary.” Gill did not comply with the suggestion in Heard’s letter dated October 10, 1922, that the actuary prepare an assignment of the policy, “for the reason that this is a department of original issue, and, so far as our records showed, the policy had never been delivered.” When a policy is canceled it is not customary to preserve the first policy. Gill had made a search for the original policy issued to Bell, but it had been destroyed by some of the clerks in the department. As to the time when Bell was getting no protection, Gill testified as follows: “When I rewrote the policy on October 17, 1922, it was dated back to September 25, 1922, because it retained the original number, and the only change that was made was the beneficiary, and it is our custom to follow the same date as the original policy. I did not instruct our local agent to make a reduction in the premium proportionate to this period of twenty-two days from September 25 to October 17. Hnder such circumstances as these it is customary with our company to require its patrons to pay premiums for a time when they are getting no protection, as in this case, for instance, a period of twenty-two days.”
Joseph S. Conwell testified that he was connected with the law firm which was general counsel for the insurer; that the Bell case had been referred to him and that he had no personal knowledge of the actual happenings in that case.
Special ground 2 complains that the court erred in admitting the testimony of Pierre Heard as a circumstance to show ratification, for the reason that it was irrelevant and immaterial to any issue in the case, and was “not shown by any evidence to have been brought to the notice of the company . . so that it could have any operation on the question of ratification.” The testimony objected to has been hereinbefore given. The gist of it is that the agents were accustomed to take notes, checks, and cash in payment of premiums, and that “some of the agents” knew about this. We think that the objection was good.
In special ground 3 the following excerpt from the charge of the court is alleged to be error: “Actual notice of the unauthorized act may be divided into express and implied. Express notice embraces not only what may fairly be called knowledge, from the' fact that it is derived from the highest evidence to be communicated by the human senses, but also that which is communicated by direct and positive information, either written or oral, from persons who are personally cognizant of the fact communicated. Notice by implication arises when the party to be charged is shown to have knowledge of such facts and circumstances as would lead him by the exercise of due diligence to a knowledge of the principal fact.” While the foregoing excerpt is quoted from McLean v. Camak, 97 Ga. 812, the last sentence thereof, which has reference to notice by implication, is not, under previous decisions of this court and of the Supreme Court, applicable to this case. In Penn Mutual Life Ins. Co. v. Blount, 165 Ga. 193 (2) (supra), this language was used: “The unauthorized act of an agent, done in the principal’s behalf, can not be ratified by the principal without actual knowledge of the act. The provisions of the Civil Code (1910), § 4530, have no application to the subject of waiver as related to conditions imposing forfeitures in contracts of insur
4. We now turn our attention to the main question in the case, to wit, ratification. We quote from Penn Mutual Life Ins. Co. v. Blount, 33 Ga. App. 642 (127 S. E. 892) : “The actual payment of the first premium during the lifetime and good health of the assured was a condition precedent to the liability of the insurer, and neither a local agent nor a general agent of the company could waive such condition.” Of course knowledge of such agents as to the unauthorized delivery of the policy would not be imputed to the company. The company, however, would be bound by the unauthorized act of its agent if it subsequently ratified the act. See 33 Ga. App. 642 (1-c), supra. This ratification must be based upon actual knowledge of the agent’s act, but such knowledge may be shown by either direct or circumstantial evidence. See this same case, 37 Ga. App. 756 (2) (supra). The question presented here then is this: Does the circumstantial evidence sustain the verdict finding ratification by the company?
We shall now advert to some of the evidence most strongly relied upon to show ratification. The local agent, Thompson, testified that he knew of no instructions as to the delivery of policies except those appearing in the pamphlet of rules issued by the company. On page 36 of that pamphlet the following appears: “Policy must not be delivered by an agent unless the insured be alive, in good
True, the instructions did not require the agent to exact prepayment of the premium, and the agent testified that he did not know that prepayment was necessary. That requirement, however, was in the application, the application was 'a part of the contract, and the agent, the insured, and the insurer were all bound by it. Why should the insurer be held to know, or even to suspect, that the provisions of its contract were being violated because the instructions to the agent did not inhibit such violation?
But it is insisted that the second policy retained the date of the original policy and was practically a duplicate of it, except as to beneficiaries, and that if the original policy was never in force the insurer was undertaking to charge a premium for twenty-three days during which the insured had no protection. In this connection we quote the following testimony of Harrison S. Grill, who was supervisor of applications, and had charge of the matter of issuing policies at the home office of the company: “A new policy was written and given the same number as the one returned. Since our records did not show that the premium had been paid or that the policy had actually been delivered to the insured, the original document was, in accordance with our regular practice, destroyed, as we did not consider that the interest of the original beneficiary had vested, and there was no reason for the company to require the
But it is said that the' agent was instructed to make prompt delivery of the policy. Surely this fact would not be notice to the company that the agent had acted contrary to the contract itself and made the unauthorized delivery of the policy that he did.
We shall now consider the effect of the most important of the letters in. the case. The letter of October 7, 1922, written when Thompson, the local agent, sent the policy to Heard, the general agent, in order that it might be sent to the home office for change of beneficiaries, contained this expression: “I am returning policy for Mr. Bell.” This letter stated also that when the policy was returned, Bell would pay. We do not think that this letter apprised Heard of the circumstances attending the delivery of the policy. There is nothing especially significant in the expression, “for Bell,” or in the statement that Bell would pay the premium when the policy was returned.
Much stress is placed upon certain expressions in the letter of October 10, 1922, wherein Heard sent the policy to Harrison S. Gill, supervisor,, at the home office, in order that the beneficiaries might be changed. Among other things, the letter said: “You
We see nothing in the testimony of Pierre Heard (hereinbefore quoted in full) that would put the company upon notice that an agent had delivered a policy entirely on credit, or that would indicate that the company had ratified such delivery. We here call attention to the following facts appearing from the record: Thompson, the local agent, testified in substance that he only disclosed his unauthorized delivery of the policy to Heard, and that this information was imparted after the second policy had been issued and received by Heard. Heard, the general agent, testified in substance that he knew nothing of the unauthorized delivery of the policy to the applicant until the new policy had been sent him ready for delivery. Smith, secretary, testified that he knew nothing about the delivery of the policy, and that Harrison S. Gill had supervision of the writing and issuing of all policies and the delivery of them to the agents, and that “Mr. Gill handled this case throughout.” Gill, whose duty it was to handle the Bell matter, and who actually did so, testified that he knew nothing about the delivery of the policy and extension of credit to Bell until October 27, 1922, when he received Heard’s letter advising him that Bell had died without having paid the premium on the first policy.
In the case at bar, every circumstance relied upon to show actual knowledge on the part of the insurer of -the unauthorized delivery of the policy and ratification of that delivery is perfectly consistent with the direct, reasonable, and unimpeached testimony of every witness testifying that he had no such knowledge. The court erred in overruling the general grounds of the motion for a new trial.