Life Casualty Ins. Co. of Tenn. v. Jordan , 69 Ga. App. 287 ( 1943 )

The policy sued upon contained the following provisions: "This policy shall not take effect untilthe first premium shall have been paid in cash and this contractdelivered and accepted during the lifetime and good health of the insured. All premiums are payable in advance at said home office or to an agent of the company, upon delivery, on or before the date due, of a receipt signed by the president,secretary or treasurer, of the company and countersigned by said agent. . . It is expressly agreed that only the president,secretary, or actuary shall have power to alter or change theterms of this contract or waive forfeitures, and that it shallnot be within the scope of the authority of any agent, manager,or superintendent other than the said president, secretary, oractuary, to alter or change the terms of this contract or towaive any of the terms thereof." (Italics mine.)

The evidence is undisputed that the first premium was never paid in cash. However, the plaintiff contends, and there is some evidence to support the contention, that she paid part of the first premium in cash to the soliciting agent before the delivery of the policy to her, and that she tendered the balance of the premium to said agent a few days later when he delivered the policy, but that he declined to accept it then and said he would get it later. And counsel for the plaintiff argue that the tender was equivalent to the payment in cash of the first premium. I can not agree to the contention. The undisputed evidence shows that the agent had no authority to deliver the policy until the entire first premium was paid in cash as stipulated by the terms of the policy, and that he had no power to alter or change said terms or to waive them. The undisputed evidence also shows that when he delivered the policy or when he received part payment of the premium the agent did not present to the plaintiff, or to her husband, a receipt signed by the president, or by the secretary, or by the treasurer of the company, and countersigned by him (the agent), as required by the terms of the policy. Furthermore, there was no evidence to authorize a finding that the unauthorized acts of the agent had been ratified by the insurance company. In Mitchiner v. Union Central Life Insurance Co.,185 Ga. 194 (supra), the court said: "Even though, in accordance with the general rule that a proper and continuing tender of the amount of a debt is the equivalent of its payment, a tender of a first premium on a life-insurance policy would ordinarily suffice (Going v. Mutual Benefit Life Ins. Co., 58 S.C. 201, 36 S.E. 556; 37 C. J. 403), yet such a mere tender will not operate as a compliance with an insurance contract, so as to render the policy effective, where, as here, the contract expressly provides that before the insurance shall take effect, the first premium must not only be paid, but be`accepted by the company or its authorized agent.' White v. Metropolitan Life Ins. Co., 63 Utah, 272 (224 P. 1106); 37 C. J. 404." The contract in that case and the contract in the instant case are substantially similar. The fact that the contract in the Mitchiner case was set forth in the application which was attached to the policy, and that the contract in the instant case was set forth in the policy itself, is of course immaterial. Furthermore, under the contract of insurance in this case, no payment of a premium could be made to any agent of the company unless the agent presented a receipt signed by the president, secretary, or treasurer of the company and countersigned by the agent. And the undisputed evidence showed that such a receipt was not presented when the alleged part payment of the first premium was made to the agent, and that the agent was without authority to accept the payment.

In Hutson v. Prudential Insurance Co., 122 Ga. 847 (supra), the court said: "A stipulation in a policy of life insurance that the premium shall be paid annually before a specific date at the home office of the company or to an agent producing a receipt of the company signed by its president or secretary, and that if not so paid the policy shall become void, and that none of the terms of the policy can be changed or waived except by written agreement signed by its president or secretary, is binding both upon the insured and the beneficiary named in the policy, and a failure to pay the premium as stipulated releases the company from all liability. Reese v. Life Asso.,111 Ga. 482 (36 S.E. 637). Where the policy expressly limits the power of the company's agents, there can be no waiver except in accordance with its provisions. Lippman v. Ins. Co.,108 Ga. 391 (33 S.E. 897, 75 Am. St. R. 62). The insured, by accepting the contract of insurance evidenced by the policy, assented to all of its terms, and the plaintiff can not hold the company liable without showing compliance with all of its stipulations and conditions. The payment of the premium at the time and in the manner stated was a condition precedent to the continuance of the life of the policy, and when the insured failed to comply with this condition precedent the contract of insurance became inoperative and could not be revived save in the manner pointed out in the policy. Manifestly this was not done. Therefore the company was not liable, and there was no error in awarding a nonsuit." To the same effect, see Mutual LifeInsurance Co. v. Clancy, 111 Ga. 865 (36 S.E. 944); MutualReserve Fund Life Asso. v. Stephens, 115 Ga. 192, 193 (41 S.E. 679); Stephenson v. Empire Life Ins. Co., 139 Ga. 82 (76 S.E. 592); McKenzie v. Northwestern Mutual Life InsuranceCo., 26 Ga. App. 225 (supra).

In the McKenzie case, this court said: "That an insurance company can legally make the delivery of a policy and theactual payment of the initial premium, as was done in this case, conditions precedent to the liability of the company admits of no doubt. See New York Life Ins. Co. v. Babcock, 104 Ga. 67 (30 S.E. 273, 42 L.R.A. 88, 69 Am. St. Rep. 134); Hipp v.Fidelity Ins. Co., 128 Ga. 491 (57 S.E. 892, 12 L.R.A. (N.S.) 319); Reese v. Fidelity Mutual Life Asso., 111 Ga. 482 (36 S.E. 637). Obviously, therefore, the insurance company in the instant case was not, under the express stipulation in the application, legally bound until the policies were delivered to the applicant and the first premiums thereon actually paid during his lifetime. Counsel for the plaintiff in error contend, however, that a liability on the policies existed because, under the ruling in the Babcock case, supra, there was a constructive delivery of the policies when they were deposited in the mail while the applicant was still living, and because the first year's premiums on the policies were tendered the company's agent before the death of the applicant. There are numerous cases in the books dealing with the question as to what constitutes a legal delivery of a life-insurance policy, but suffice it to say that the correct criterion by which this question is to be determined is clearly and succinctly stated in the Babcock case, supra, to be, not who has the actual possession of the policy, but who has the right of possession. There was, therefore, no delivery in the case at bar, unless the applicant, before his death, had the right of possession of the policies sued upon, and this right he did not have, under the express provision of the application, before actual payment of the first premiums during his lifetime." And in the same case it was said: "This ruling is not in conflict with the decision in the Babcock case, supra, cited and relied upon by counsel for the plaintiff. In that case the controlling facts were, first, that the premiumon the policy was paid at the time Babcock signed the applicationfor the insurance, and, second, that the contract of insurance contained no express stipulation that the policy should beactually delivered to Babcock during his life. Accordingly the Supreme Court held that when the policy was deposited in the mail at the home office of the insurance company (Babcock having already paid the premium and having nothing else to do before he was entitled to the possession of the policy), it was for the purpose of being unconditionally delivered to Babcock, and consequentially the delivery to the postal authorities was, in the eyes of the law, a constructive delivery to Babcock himself. In the instant case, when the policy was deposited in the mail, it was not for the purpose of an unconditional delivery to the applicant, as in the Babcock case. The applicant in this case still had a most important act to do before he was entitled to the possession of the policy. He had to actually pay the first premium thereon. Therefore in this case the delivery of the policy to the postal authorities was not a constructive delivery to the applicant. The Babcock case, moreover, distinctly and clearly recognizes that by an express provision in an insurance contract an insurer can legally and bindingly stipulate that the first premium on the policy must be actually paid before the contract is consummated." The stipulation in question in theMcKenzie case was set forth in the application which was attached to and made part of the policy and was not contained in any other part of the policy. Therefore, we stressed the fact that the application was made part of the policy. In the instant case, however, the stipulation was set forth in the policy itself and was not contained in the application, and therefore the fact that the application was not attached to the policy is obviously immaterial.

In Southern Life Insurance Co. v. Kempton, 56 Ga. 339, cited in behalf of the defendant in error, the facts were different from those of the case at bar. The court held in theKempton case that the facts showed a waiver of the provision of the policy stipulating that the insurance could not take effect until the first premium was actually paid. In the instant case the facts show no such waiver. Furthermore, in the Kempton case the decision seems to be based on the adjudication by the court "that McNair [the agent of the insurer], under the facts, became the agent of Scales [the insured] to receive the policy for him; that he did receive it for him, and its delivery to McNair was a delivery to Scales." That adjudication is at variance with previous and subsequent rulings of the Supreme Court. In Croghan v. N. Y.Underwriters' Agency, 53 Ga. 109 (supra), the court said: "It is not competent for one to employ an insurance agent to effect an insurance or renewal in the agent's own company. He can not take the agency of one wishing to insure, without the consent of his principal. To be agent for both parties to a contract is to undertake inconsistent duties, and such a mutual agency requires the consent of both principals to the mutuality of the agency." The ruling in the Croghan case was cited and approved inRamspeck v. Pattillo, 104 Ga. 772 (supra). Moreover, the policy in the Kempton case, supra, contained no stipulation that payment of the first premium could be made to a local agentonly upon delivery by him of a special form of receipt signed by specified general officers of the insurance company and countersigned by the local agent. The decisions holding that the limitation of authority of an insurance agent, which is contained in the policy only, refers to matters occurring subsequently to the issuance and delivery of the policy, are not applicable to the facts of the instant case, and should not be extended to cover them. Moreover, counsel for the defendant in error do not contend that such cases are applicable here.

It is true that there were some conflicts in the evidence; but, resolving all such conflicts in favor of the plaintiff, a finding for the defendant was still demanded under the evidence and the law applicable thereto. In my opinion the court erred in denying a new trial.