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Lawskills.com Georgia Caselaw
LUMBERMEN'S UNDERWRITING ALLIANCE v. JESSUP et al.
37726.
Action on insurance policy. Laurens Superior Court. Before Judge Stephens. March 6, 1959.
1. Where the trial court sustains any or all demurrers to a pleading, and allows time for the filing of an amendment, such judgment or order shall not be subject to exception or review.
This is the second appearance of this case in this court (see Lumbermen's Underwriting Alliance v. Jessup, 98 Ga. App. 305, 105 S. E. 2d 596) and is a companion case to the second appearance of the case of Lumbermen's Underwriting Alliance v. First Nat. Bank & Trust Co., 100 Ga. App. 217 (110 S. E. 2d 782). On the former appeal of the present case, this court, ruling solely on the demurrers to the petition, held this case to be controlled by the companion case, and did not set forth the pleadings. In view of the multiplicity of questions posed by the present appeal we believe that an understanding of the rulings to be made will be facilitated by setting forth the pleadings and by recounting the events which have occurred in the case prior to the present appeal.
On March 28, 1958, W. L. Jessup, Jr., doing business as Brooks-Jessup Lumber Company, and The First National Bank & Trust Company of Macon, a national banking association, instituted the present action against Lumbermen's Underwriting Alliance. As finally amended, the plaintiffs allege substantially the following facts in their petition: (1) The defendant is a voluntary association with no fewer than one thousand members or subscribers who are individuals, partnerships, and corporations, being citizens of no fewer than thirty states in the United States, including the State of Georgia. (2) The defendant is a reciprocal or inter-insurance exchange whereunder the members or subscribers contract among themselves through an attorney in fact to insure each other against loss by fire. (3) The defendant was, during the years 19-56 and 1957, and is now, authorized to transact business within the State of Georgia, and on the date of loss hereinafter set out, the defendant had an agent, to wit, Truman S. Dennett, who was a resident of Laurens County, Georgia. (4) On October 22, 1956, the defendant issued to the plaintiff Jessup a standard fire insurance policy (No. 29122) with an endorsement thereon naming The First National Bank & Trust Company in Macon as payee as its interest might appear, insuring the plaintiffs against loss by fire of a stock of lumber. A copy of the policy, together with the material endorsements annexed to the policy is attached to, and made a part of, the petition. (5) The policy was in full force and effect on September 4, 1957. (5a) On September 4, 1957, 1,778,308 board feet of the stock of lumber insured under the policy was destroyed by fire. The value of the lumber so destroyed and the amount of the plaintiffs' loss is $167,726.15, as is shown by an itemized schedule attached to, and made a part of, the petition showing the type, character, grade, size, and value of the lumber at the time of loss. This schedule also lists the lumber on hand at the time of the fire, which was not destroyed, and shows the particular description, character, grade, size, and value thereof in detail, less the necessary expense of drying, dressing, and resawing such items to which further processing would be applicable. The aggregate quantity of lumber on hand at the time of the fire was 2,015,933 board feet of the aggregate value of $187,954.16. (6) On October 7, 1957, the plaintiff Jessup furnished the defendant proof of loss for himself and The First National Bank & Trust Company in Macon. A copy of such proof of loss is attached to, and made a part of, the petition. Accompanying such proof of loss was a letter from the plaintiff to the defendant a copy of which is attached to and made a part of the petition and which reads as follows:
"Fire Loss 9/4/57.
Policy No. 29122.
"Gentlemen:
"Kindly refer to our letter of September 24th wherein we confirm our telegram to you of Sept. 5th advising you of fire loss suffered at our lumber yard during the early morning hours of September 4th, receipt of which you acknowledged in your letter of September 6th.
"In order to comply with our portion of the obligations as set forth in your policy, we are attaching sworn statements of proof of loss, outlining all pertinent facts as required in your contract.
"May we invite your splendid cooperation in this matter as has been in evidence in other pleasant transactions.
Yours very truly,
Brooks-Jessup Lumber Company.
By:
W. L. Jessup, Jr.
"WKJ: mls
CC Continental Associated Adjusters.
Kansas City, Mo.
CC First National Bank & Trust Co."
(7) On November 13, 1957, the defendant made a lump sum offer of $150,000 in compromise of not only the settlement of lumber loss but the plant loss insured under another policy (No. 41911) covering plant loss of $16,100. The offer was not a bona fide offer made through any effort to ascertain and pay the amount of the loss, but was made in an effort to coerce the plaintiff Jessup to accept substantially less than the amount of his loss. This offer was immediately withdrawn when the plaintiffs did not accept it. (7a) At the time the $150,000 offer was made, there was no contention made by the defendant then or prior thereto that the plaintiff Jessup had not actually suffered a loss of $183,826.15 or any amount less than that sum, or that the plaintiffs were not entitled to recover that sum under the policies. The defendant assigned no fact or reason why it should not pay the amount of $183,826.15. (8) Thereafter, by letter dated December 5, 1957, the defendant, through its manager, J. J. Abreo, wrote the plaintiff Jessup the following letter:
"Re: Lumbermen's Underwriting
Alliance of Kansas City, Missouri.
Policy No. 29122 and 41911.
"Dear Mr. Jessup:
"We wish to advise that your proofs of loss dated October 8, 1957, have been carefully considered in the light of the facts contained therein and the facts disclosed by your examination under oath on November 29, 1957. We wish to advise that said proofs heretofore submitted are rejected for the following reasons:
"(a) Your said examination under oath discloses that neither of said proofs correctly reflects the interest of the named insured in the property described in the policies.
"(b) Your said examination under oath discloses that neither of said proofs correctly reflects the actual cash value of the property described in the policies at the time of the loss.
"(c) Your said examination under oath discloses that neither of said proofs correctly reflects the whole loss and damage to the property described in said policies.
"(d) Your said examination under oath discloses that neither of said proofs justifies the amount claimed thereunder.
"(e) Your said examination under oath discloses that both before and after the fire loss of September 4, 1957, the insured had wilfully concealed material facts and circumstances concerning the subject of said insurance and the interest of the insured therein.
"The wilful concealment by the insured of material facts or circumstances concerning said insurance and the subject thereof and the interest of the insured therein, as disclosed by said examination under oath, rendered said policies void. Without in any way waiving the insurer's complete defense to said claim, we hereby make a firm compromise settlement offer of $133,000 in full settlement of all claims under said policies. This compromise settlement offer of $133,000 in full settlement of all claims under said policies. This compromise settlement offer will be withdrawn unless we are notified of its acceptance in writing within a reasonable time.
Very respectfully yours,
Lumbermen's Underwriting Alliance of
Kansas City, Missouri.
By: Continental Associated Adjusters
J. J. Abreo, Manager.
"JJA: w
Eastman, Georgia.
First National Bank & Trust Company.
Macon, Georgia.
Attn: Mr. William M. Downs, (9) The plaintiffs allege that this compromise offer of
$133,000 was not a bona fide offer in settlement of the loss sustained by the plaintiffs, as the loss included not only the lumber loss but the plant loss, while the amount of the offer represented the approximate indebtedness of the plaintiff Jessup to the plaintiff First National Bank & Trust Company. (9a) At the time the offer of $133,000 was made, there was no contention by the defendant then or prior thereto that the plaintiff Jessup had not actually suffered a loss of $183,826.15 or that the plaintiffs were not entitled to recover that sum under the policies. The statements made in the defendant's letter of December 5, 1957, were not made in good faith by the defendant, and the defendant did not in truth believe the statements contained in the letter and assigned as reasons for not owing the loss in its entirety. (10) The plaintiffs have fully complied with all the conditions of the policy. (11) After receipt of the defendant's letter of December 5, 1957, the plaintiffs made written demand on the defendant for payment of the aforesaid loss and the defendant is notified to have and produce such demand on the trial of the case. (12) The defendant's refusal to pay the loss was in bad faith. (13) As a result of the defendant's conduct, the plaintiffs have bed forced to employ attorneys, and plaintiffs are entitled to 25% of this claim as damages and are also entitled to reasonable attorneys' fees in the sum of $25,000. The agent of the defendant referred to in paragraph 3 (Mr. Dennett) is no longer a resident of Laurens County, Georgia, but is now a resident of the State of Missouri. (15) The defendant has designated E. Smythe Gambrell as its true and lawful attorney upon whom all process of law may be served within the State of Georgia. His office is at 825 Citizens & Southern National Bank Building, Atlanta, Fulton County, Georgia. (16) On the date of the loss, and at all times subsequent thereto, the interest of The First National Bank & Trust Company in Macon in said policy was $132,800, which is the amount of Jessup's indebtedness to the plaintiff bank. The plaintiffs prayed judgment for the principal sung of $167,726.15 with interest at seven percent from October 7, 1957, twenty-five percent damages, attorney's fees in the sum of $25,000 and that all costs be taxed by the trial court; that process issue in terms of the statute; and that a second original issue directed to the Sheriff of Fulton County, Georgia, for service upon "the attorney in fact in Fulton County, Georgia as provided by statute."
On June 6, 1958, the trial court overruled all the defendant's demurrers, both general and special, to the plaintiff's petition as finally amended, and it was on assignments of error on that judgment that this case was first appealed to this court. The bill of exceptions on that appeal was certified by the trial court on July 1, 1958.
The presentation of the defendant's answer as finally amended poses some slight difficulty, as the trial court, on July 2, 1958, after the bill of exceptions to the overruling of the demurrers to the petition had been certified, sustained certain of the plaintiff's demurrers to the defendant's original answer filed April 29, 1958, and struck certain paragraphs therefrom. The defendant's answer was thrice amended, either to meet the trial court's ruling or to voluntarily add or delete other information. As the defendant has assigned error in the present bill of exceptions on the striking of certain enumerated paragraphs of its original answer, we purpose to set forth the answer as finally amended by indicating these paragraphs which were stricken on demurrer in brackets and indicating those paragraphs added voluntarily by the defendant in parentheses.
The defendant, by and through its attorney in fact, U. S. Epperson Underwriting Company, without waiving its defense that the trial court was without jurisdiction, in its answer as finally amended alleged substantially as follows: (1) The defendant admits paragraphs 1, 2, 3, 4, 5, 6, 8, 11, 14, and 15 of the petition. (2) The defendant denies paragraphs 5, 5a, 7a, 9a, 10, 12, and 13 of the petition. (3) The defendant denies paragraph 4 of the petition as pleaded, but admits making the lump sum offer of $150,000 including the plant loss of $16,100. (4) The defendant denies paragraph 9 as pleaded, but admits the offer of $133,000 in full settlement of the plaintiff's claim, including $16,100 for the plant loss. (5) The defendant can neither admit nor deny paragraph 16 of the petition. (6) [For further plea and answer the defendant alleges that in a further effort to determine and settle this claim, the defendant's attorney in fact, U. S. Epperson Underwriting Company, filed an action in the United States District Court for the Middle District of Georgia, requesting that court for a declaratory judgment to determine the defendant's liability, if any, for this loss, which action was dismissed on the motion of the plaintiffs and is now pending in the United States Circuit Court of Appeals.] By amendment of July 16, 1958, the defendant added: (It has never refused payment of the claim of the plaintiffs, but, on the contrary, when its settlement offers were refused by the plaintiffs, the defendant's attorney in fact took the affirmative action of filing a declaratory judgment in the Federal court to determine what amount it was owing to the plaintiffs under the said policy. The defendant shows that it has acted in good faith.) (7) Under the terms of the policy, the insured reported to the defendant monthly the actual market value of his lumber on hand on forms which contained the following provisions above the signature of the insured: "In accordance with the terms and conditions of reporting policies issued to us, we declare hereby the cash value of property subject to this insurance and the total amount of other insurance on said property as of above date, applying at each location as follows read the conditions of your policy. Report your values promptly and correctly. Note: The amounts on this statement should represent actual cash values. The reports established the amounts of your insurance subject only to fluctuations between reporting dates. Check your policies." (8) [The insured on the dates hereinafter mentioned showed the following valuations of lumber on his operating statements and profit and loss statements, but reported a substantially less amount to the defendant as follows:
operating Value reported 12/31/56 $136,352.16 $68,191.30
4/30/57 121,339.68 65,391.53 By amendment of July 16, 1958, the defendant added: 8a. No inventory value reported to the defendant has ever been
correct according to the books and operating statements taken therefrom for the plaintiff Jessup. Consequently, the defendant could not accept as correct, without substantiation, the inventory valuation submitted to it in the plaintiff Jessup's proof of loss. 8b. The insured, on the dates hereinafter mentioned shows the following valuations on his operating statements and profit and loss statements, but reported a substantially less amount to the defendant -- and here the defendant reiterates the tabulations appearing in its original paragraph 8, which was stricken on demurrer.) (9) [On or about June 4, 1958, Truman Dennett, Field Representative for U. S. Epperson Underwriting Company, reviewed this insured's insurance with him, and particularly policy No. 29122, and discussed each provision with the insured carefully. The insured then and there understood that the cash value of his stock of lumber meant the market value of said lumber as it stood on the yard at the time of any fire loss, and that he was supposed to report the full market value of said lumber in his monthly reports to the defendant. The insured then and there stated that his previous reports to the company had not been correct but that he would report correctly thereafter.] (10) [Subsequently, and under date of June 14, 1957, the insured stated under oath that the maximum of all lumber on hand at any time during the preceding twelve months had been $70,150.] (11) [Under date of June 30, 1957, the insured reported to the defendant that the actual value of lumber on hand was $98,892.47, whereas his operating statement of June 30-, 1957, reflected a lumber inventory as of that date of $148,043.04.] (12) [On July 29, 1957, Truman Dennett returned to the insured's premises at the request of the insured and again reviewed the insured's policies with him. On that occasion the insured stated to Dennett that he had been reporting correctly since their conference on June 4, 1957, and that he would continue to do so.] (13) [Notwithstanding the foregoing statements, the insured reported to the defendant as of July 31, 1957, that the actual cash value of the lumber on hand amounted to $112,250, whereas his operating statement for that date showed what purposed to be a lumber inventory of $144,236.02.] (14a) (The insured reported to the defendant to have had lumber with an actual value of $187,954.16 on hand on August 31, 1957, whereas his operating statement for that date showed a lumber inventory with a value of some $148,440.31.) (14b) (In his proof of loss Jessup submitted that the value of his lumber inventory on September 3, 1957, the date of loss, was $187,841.66 and the value of inventory on hand after loss was $20,115.51, showing the amount of loss to be $167,726.15.) (14c) (In view of the consistently false statements of value made by the plaintiff Jessup, the defendant could not in good faith determine the actual value of the inventory on hand at the time of the loss and had no means of ascertaining the loss except by reference to Jessup's books, which showed that the proof of loss presented by the defendant was a gross over-evaluation of the actual value of lumber inventory on hand at the time of loss). (15) The insured wilfully and fraudulently made material misrepresentations to the defendant as to [a] The actual cash market value of the lumber on hand each month from December 31, 1956, through July 31, 1957.] (b) The actual cash market value of the lumber on hand August 31, 1957. (c) The actual cash market value of the lumber on hand at the time of the fire of September 4, 1957. (d) [Efforts on the part of the insured to sell said plant, including all lumber inventory and related equipment prior to the fire of September 4, 1957.] (e) [Whether his business was operating at a profit in the month of August 1957.] (f) [Whether his mill superintendent, J. A. Doherty, was on duty prior to the fire, the evening on which the insured claims to have left town, and whether his superintendent was on duty the day of the fire on September 4, 1967.] (f) [Whether his mill superintendent, J. A. Doherty, was on duty prior to the fire, the evening on which the insured claims to have left town, and whether his superintendent was on duty the day of the fire on September 4, 1957.] (g) [Information contained on the insured's Federal income tax return for the year 1956 with particular regard to values placed on lumber inventory.] (h) [The actual cash value of the buildings, machinery, and equipment insured under policy No. 41911]. (i) [The actual cash value of the buildings, machinery, and equipment claimed by the insured to have been destroyed in the fire of September 4, 1957]. By amendment, filed July 17, 1958,
the defendant alleged: (15) (The plaintiff Jessup wilfully and fraudulently made material misrepresentations to the defendant as to the actual cash value of the lumber on hand on August 31, 1957, and the actual cash value of the lumber on hand at the time of said loss on the night of September 3, or the early morning of September 4.) (16) Each such concealment and misrepresentation by the insured rendered the policies of insurance null and void. (17) The demand on the part of the insured for the sum of $183,826.15 from the defendant by his sworn proof of loss of October 8, 1957, and by his written demand of December 11, 1957, constituted a fraudulent over-evaluation and claim on the part of the insured which rendered the policies null and void. (18) Each of the policies contained, among others, the following provisions: "Conditions suspending or restricting insurance. Unless otherwise provided in writing added hereto this company shall not be liable for loss occurring (a) while the hazard is increased by any means within the control or knowledge of the insured . . ." (19) At the time of the fire loss on September 4, 1957, the physical hazard had been increased by a means within the knowledge and control of the insured in that the insured had contracted by the terms of the policies to maintain clear spaces which he failed to do in failing to keep vegetation therein out or removed as it should have been and in failing to have on hand the night of September 3, 1957, an available night watchman, although he had used a night watchman on the two preceding nights, and in leaving town during the late afternoon of September 3, 1957, without checking the burning pit at the plant, although he knew it had been burning during the day, all of which increased the fire hazard to the premises and suspended the coverage of the policies at the time of the said fire. (20) [The insured claims to be of the opinion that the fire was started from the burning pit]. -- (21) [At the time of the fire, "the moral hazard" had been increased by a means within the control or knowledge of the insured in that, although the business had been losing substantial amounts of money, and the insured had tried to sell all of the land, buildings, machinery, and lumber for $200,000, he increased the insurance on the buildings, machinery, and lumber to the amount of $256,500 a short time prior to the fire of September 4, 1957, which rendered the properties over-insured and thereby increased the "moral hazard," which suspended the coverage of the policies at the time of the fire loss.] By amendment, on July 17, 1958, the defendant added: (21) (On July 29, 1957, Jessup requested that the limits of his policy on his lumber inventory be increased by $50,000; that is, from $100,000 to $150,000, and the defendant made such increase. On August 19, 1957, Jessup requested an increase in the limits of liability in his insurance on his lumber inventory of an additional $25,000 which was made by the defendant. On August 31, 1957, Jessup requested by telephone an immediate increase by binder of $13,000 on his lumber inventory limits, thus increasing the coverage from $175,000 to $188,000. In addition to the foregoing policy on the lumber inventory, the plaintiff Jessup had coverage of $68,500 under a policy covering building and equipment, thus the plaintiff Jessup had insurance of $256,500 on his plant equipment, and lumber at the time of the loss in controversy, and these properties were greatly over-insured and gave the plaintiff Jessup a pecuniary interest in having the property destroyed by fire, as the properties had a fair market value of less than $200,000 immediately prior to, and at the time of said loss. His business had been losing money steadily for a period of twelve months immediately prior to the loss, which gave Jessup an additional pecuniary interest in the loss of this property by fire. Jessup had unsuccessfully been attempting to sell the plant, equipment, and lumber inventory for a period of months prior to the loss in controversy for an amount far less than the amount of insurance coverage which he increased and placed on the property within forty days of the loss which again gave Jessup a pecuniary interest in having his property destroyed by fire. Such wilful increase in the moral hazard within the control and knowledge of Jessup suspended the coverage of this policy at the time of the fire.) On August 6, 1958, the defendant added the following paragraphs by amendment. (22) Line 1 through 6 of the second page of the policy at issue read: "This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning this
insurance or the subject thereof, or in case of any fraud or false swearing by the insured related thereto." (23) On November 29, 1957, the plaintiff was examined under oath in the office of his attorney, Mr. Hal M. Smith, at the courthouse in Eastman, Georgia, before Claude Joiner, Jr., Court Reporter for the U. S. District Court, Middle District of Georgia, and after that examination the plaintiff subscribed the transcript as true and correct on December 2, 1957. A copy of that transcript is attached and made a part of the petition. (On the following day, the plaintiff attached to, and made a part of the transcript and petition 18 exhibits to the transcript.) (24) In the examination under oath, the plaintiff wilfully concealed that he had been advertising this plant and inventory for sale and attempting to sell them for many months prior to the loss. The exact time he offered the plant and inventory for sale is unknown to the defendant, but known to the plaintiff. (25) In the examination under oath, the plaintiff falsely swore (on page 17) that "in computing the values, as it is shown on that inventory, we computed it at the regular market value at the time of the loss and made a separate entry under there, allowing for the cost of dicing it and dressing it and loading it; and that was deducted from the value." The defendant contends that the plaintiff knew that the amounts deducted in no manner represented his actual costs of drying, dressing and loading and were entirely inadequate. (26) In said examination the plaintiff wilfully concealed the names and locations of parties from whom he was purchasing lumber and from whom he had purchased the lumber destroyed by the fire. (27) In said examination the plaintiff falsely swore that the balance sheets, attached to the transcript of the examination as Exhibits A through G-2, did not correctly reflect the value of the lumber on hand on the dates thereof. (28) In said examination the plaintiff falsely swore that the exhibits, reporting the values submitted to the defendant the last of July and August, 1957, correctly reflected the value of the lumber on hand on those dates. (29) In said examination the plaintiff falsely swore that he did not know how any of the inventory values shown on his statements were arrived at. (30) In said examination the plaintiff falsely swore that he did not know how the monthly report of values (Exhibits H-1 through H-10, attached to the transcript of the examination) were arrived at and did not know why such reports of value were not the same as shown on the books. (31) In said examination the plaintiff falsely swore that his business was making money in August before the fire and had made some money the last few months before the fire. (32) In said examination, the plaintiff falsely swore that he had expected the plant to operate on the day of the fire and had left instructions with his plant superintendent, Mr. Dougherty, as to what was to be done in such operation. (33) In said examination the plaintiff falsely swore that the reason his plant lost money in August of 1957 was because of the unusually high handling costs due to the extra time and labor spent in readjusting the yard. (34) Each such concealment and false statement under oath voided the policy sued upon under the terms of the policy as set forth in Paragraph 22 of the petition as amended. On August 8, 1958, the defendant added the following paragraph by amendment: (35) Each and all of the false statements, swearings, and concealments specified in Paragraphs 23 though 33 of the answer as amended were material facts and all facts 50 concerned were material and were, upon information and belief, made by the plaintiff Jessup with intent to defraud the defendant.
The trial court on July 2, 1958, sustained the demurrers of the plaintiffs to the indicated paragraphs of the defendant's answer and allowed the defendant 10 days within which to amend its answer. The defendant assigns error here upon that part of the judgment of July 2, 1958 striking the indicated paragraphs from the answer. On July 11, 1958, the court allowed the defendant 5 additional days within which to amend its answer. Following the defendant's amendments to its answer and the expiration of the time allowed for amendment, the trial court did not enter any fresh adjudication as to the sufficiency of the answer as amended.
On the trial of the case the jury, on August 9, 1958, returned the following verdict: "We the jury find in favor of the plaintiff, Loss of inventory $167,726.15, Damages, 10%, $16,772.62, Atty. fees, $15,000." The court on the same day entered judgment thereon. On August 21, 1958, the defendant filed its skeletal motion for a new trial upon which the trial court issued the requisite orders issuing a rule nisi, supersedeas, allowing the defendant until the final hearing to file a brief of the evidence and its amended motion for new trial and setting a time for the hearing on the motion, which was continued from time to time.
On March 6, 1958, the defendant filed its brief of evidence and its amended motion for a new trial, consisting of 28 special grounds (numbered from 4 through 41). The trial court on the same day denied the motion for new trial as amended, and the defendant assigns error here on that judgment.
QUILLIAN, Judge.
1. " 'Where the court sustains any or all demurrers to pleading, and allows time for the filing of an amendment, such judgment or order shall not be subject to exception or review, but the court shall render a judgment on the sufficiency of the pleadings after the expiration of the time allowed for amendment which shall supersede the judgment allowing time for amendment.' Code 81-1001 (as amended by Ga. L. 1946, pp. 761, 775; Ga. L. 1952, pp. 243-245; Ga. L. 1953, Nov.-Dec. Sess., p. 82)." McCormick v. Johnson, 213 Ga. 544 (1) (100 S. E. 2d 195). A demurrer to an original pleading does not, without more, cover the pleading after it has been amended in material respects, but the demurrer should be. renewed if it is still relied on; and, where, as here, the trial court in its first order requires the defendant to amend its answer to meet the grounds of the plaintiff's special demurrers, and the answer is amended, the questions raised by the demurrer prior to the amendment become extinct and nugatory and present no question for adjudication by this court where the trial court, following the amendment, entered no fresh adjudication on the sufficiency of the answer after the expiration of the time allowed for amendment (McCormick v. Johnson, supra; Adams v. Ricks, 91 Ga. App. 494, 86 S. E. 2d 329; United Jewelers, Inc. v. Emanuel Burton Diamond Co., 214 Ga. 170, 173, 104 S. E. 2d 87), and the ruling here first made, and upon which error is ineffectually assigned in this court is not subject to review and does not become the law of the case as to the sufficiency of the answer as finally amended. Queen v. Craven, 95 Ga. App. 178, 182 (2) (97 S. E. 2d 523); Rossiter v. Pitt, 93 Ga. App. 44 (90 S. E. 2d 597); Myers v. Grant, 212 Ga. 182 (91 S. E. 2d 335); Jacoby v. Jacoby, 212 Ga. 295 (92 S. E. 2d 7).
2. The defendant, in its amended motion for a new trial has assigned error in 38 special grounds, which it has numbered 4 through 41. In order to facilitate reference to these special grounds we have adopted for each special ground the number assigned it by the defendant. Special grounds 33 through 41 are nothing more than a recapitulation of the general grounds, being "specialized" as to the three elements of recovery; that is to say, the recovery of the loss claimed under the policy of insurance, the recovery of damages and the recovery of reasonable attorneys' fees under the provisions of Code 56-706, and these grounds will be discussed in our determination of the general grounds.
3. Special ground 12 is treated as abandoned. Evergreen Memory Gardens, Inc. v. Blythe, 92 Ga. App. 413 (88 S. E. 2d 528).
4. "Assignments of error not insisted upon by counsel in their brief or otherwise argued in this court will be treated as abandoned. A mere recital in the brief of counsel of the existence of an assignment of error [or special ground of a motion for new trial] without argument or citation of authorities in its support, is insufficient to save it from being treated as abandoned. Head v. Lee, 203 Ga. 191 (5) (45 S. E. 2d 66)." B-X Corp. v. Jeter, 210 Ga. 250 (4) (78 S. E. 2d 790); Bell v. Bell, 210 Ga. 295 (5) (79 S. E. 2d 524). Special grounds 21, 28, 29, 30, and 31 are treated as abandoned for the reasons stated in the foregoing rule, quoted from the Head case, supra.
5. "Where the court, in a colloquy with counsel, makes remarks which are prejudicial or intimate an opinion upon the merits of the case, proper objection, or a motion for mistrial, should be made at the time of the occurrence. In the absence of such objection, error cannot be assigned thereon for the first time in a motion for new trial. Head v. Pollard Lumber Sales, 88 Ga. App. 757 (2) (77 S. E. 2d 827); Moore v. McAfee, 151 Ga. 270 (11) (106 S. E. 274); Adams v. State, 171 Ga. 90 (8) (154 S. E. 700); Ealy v. Tolbert, 210 Ga. 96 (78 S. E. 2d 26). Special ground 6 of the motion for new trial falls within the prohibition of the rule of procedure just stated, as counsel for the defendant were remiss in not interposing a proper objection or motion for mistrial to the trial court's alleged comments on the evidence.
6. In special grounds 8 and 9, counsel for the defendant assign error on the trial court's "comment on the evidence." Such an assignment of error presents no question for adjudication here. The interdiction contained in Code 81-1104 is that a judge of the court shall not "express or intimate his opinion as to what has or has not been proved," as to a matter in issue. Hettrick v. State, 27 Ga. App. 671 (10) (109 S. E. 528); Owens v. State, 32 Ga. App. 417 (123 S. E. 919); and see Elder v. Cozart, 59 Ga. 199.
The fact that the court, in overruling counsel's objection to the "comment on the evidence" stated: "If that's all you can think about doing, I most respectfully deny it," which counsel for the defendant alleges ridiculed and disparaged him as counsel for the defendant, presents no question for adjudication where counsel for the defendant thereafter made no motion for a mistrial based on such grounds. See cases cited in division 5 of this opinion on this point. Counsel's fear lest the court hold him in contempt if he urged a motion for mistrial for the court's alleged ridicule and disparagement of him in no wise obviates the necessity of such a motion in order to have this court review the alleged error. Walker v. Hunter, 17 Ga. 364; Callahan v. State, 209 Ga. 211 (3) (71 S. E. 2d 86).
7. Where, in a special ground of a motion for new trial, error is assigned on the admission in evidence of certain testimony, such assignment of error will be presumed to have been waived where it appears that testimony to substantially the same effect is elsewhere admitted without objection. King v. Sharpe, 96 Ga. App. 71 (99 S. E. 2d 283); Teague v. Adair Realty & Loan Co., 92 Ga. App. 463 (88 S. E. 2d 795); Southeastern Greyhound Lines v. Hancock, 71 Ga. App. 471 (2) (31 S. E. 2d 59). Testimony to the same effect as that alleged in special ground 4 to have been erroneously admitted was subsequently elicited from the plaintiff Jessup without objection and also from the defendant's own witness, Dennett. There is no merit in this ground.
8. In special ground 5 an affidavit made by D. D. Rowland was tendered in evidence. Counsel for the defendant made the general objection that the affidavit was incompetent; whereupon the trial court ruled that the affidavit would be admitted for the limited purpose of showing bad faith if it showed anything. No further objection was made by counsel for the defendant following such ruling of the trial court. "Where in response to an objection of a general nature to evidence the court states that it is admitted for a limited purpose, and the objecting party makes no further objection thereto, no valid assignment of error can be based upon the court's act in admitting the evidence." Mickle v. Moore, 193 Ga. 150 (1) (17 S. E. 2d 728); First Nat. Bank v. Carmichael, 198 Ga. 309, 314 (315. E. 2d 811).
9. Special ground 7 assigns error on an alleged curtailment of the defendant's right of cross-examination of the plaintiff Jessup, and disparagement of counsel for the defendant. Even if such were the case, and we detect no such misconduct on the part of the court from the facts alleged in this ground, it does not appear that counsel made any timely objection or motion for mistrial, and pursuant to the authorities stated in division 5 of this opinion, this ground presents no question for determination by this court.
11. In special grounds 13 through 19 error is assigned on the following excerpts from the charge of the court stating the contentions of the parties: (a) In special ground 13 it is alleged that the court charged: "The amount of insurance in force on September 4, 1957, the date of the fire [was?], $188,000." (b) In special ground 14 it is alleged the court charged: "The defendant admits that they issued said policy, that the amount of insurance on September 4th was $188,000, but it denies that the insurance policy was in effect on the 4th day of September, 1957." (c) In special ground 15 it is alleged that the court charged: "The plaintiff also contends that on the 13th day of November, 1957, the defendant made a lump sum offer of $150,000 in compromise settlement not only of the plaintiff's lumber loss, but the plant loss insured under another policy by the defendant. That loss being $16,000. The plaintiff contends that this was not a good faith offer of compromise, because the defendant never contended that his claim for stock of lumber and plant together totaling the amount of $183,826.15 was not the true amount of his loss. The plaintiff further contends that the insurance company finds no reason, or furnished no fact as to why it should pay less than the full amount of his loss, and that the offer of settlement was made to coerce and force the plaintiff (sic) to accept legs than his (sic) actual loss. The defendant insurance company, admits that it made the offer, but denies that it was not a bona fide offer of compromise." (4) In special ground 16 it is alleged that the court charged: "The plaintiff (sic) further contends that on December 5th, the defendant made another offer of compromise of $133,000, which offer not only included the claim of loss of stock of lumber, but for his plant. The plaintiff likewise contends that this offer was not in good faith. The plaintiff (sic) contends that the insurance company had not prior to that time given any reason to him why it should not pay the full amount of his (sic) loss of $183,826.15, and that the statement contained in the letter was not believed by the defendant to be true, and therefore said offer was not in good faith offer in compromise. The defendant admits that it made the offer, but it denies the other allegation in that connection." (e) In special ground 17 it is alleged the court charged: "The plaintiff (sic) contends that after receipt of said letter of December 5th, he made a written demand on defendant for payment of his loss, this the insurance company admits." (f) In special ground 18 it is alleged that the court charged: "The plaintiff contends that on October 7th, he furnished the defendant with a proof of loss, and this allegation the defendant admits." (g) The excerpt from the charge of which complaint is made in special ground 19, is identical with that portion of the charge set forth in special ground 16.
An examination of the pleadings, which precede this opinion, and the charge as a whole, reveals that the court charged the jury fully and fairly on all the contentions of the parties, and as to the contentions contained in the excerpts to which exception is taken, the court charged the contentions specifically as pleaded.
Special grounds 13 and 14 of the amended motion, each of which attack fragmentary portions of the charge, do not recite enough of the charge, or set out or refer to the parts of the pleadings and evidence necessary to the determination of the assignments of error those grounds undertake to present.
The language from the charge, of which complaint is made in special grounds 15 and 16, is specifically in accord with paragraphs 7, 8, and 9 of the plaintiffs' petition as finally amended and paragraphs 3 and 4 of the defendant's answer.
It is not a proper ground of complaint, as alleged in special grounds 15 and 16, that an excerpt from the charge, of which complaint is made, does not include other and different principles of law or contentions of the parties. Payne v. Young, 27 Ga. App. 370 (4) (108 S. E. 312); Ledford v. State, 89 Ga. App. 683 (80 S. E. 2d 828), and citations.
The language of which complaint is made in special grounds 17 and 18 is in exact accord with the allegations of paragraphs 11 and 6 of the plaintiffs' petition, both of which are admitted in paragraph 1 of the defendant's answer.
The language of which complaint is made in special ground 19 (which is the identical language of which complaint is made in special ground 16) is not subject to the criticism that it constituted an expression of opinion by the court as to what had been proved. Stating the contentions of the parties does not constitute an expression of opinion by the court. Barnes v. Bell, 206 Ga. 660, 663 (58 S. E. 2d 400); Smallwood v. Pollard, 54 Ga. App. 617, 618 (4) (188 S. E. 594).
12. In special ground 20 complaint is made of the following excerpt from the charge of the court: "I charge you that the policy defines the actual cash value of a stock of lumber at the market price of such lumber as it existed at the time and place of loss, less all discounts and unincurred expenses to which such stock would have been subject had no loss occurred. I charge you that the parties, both plaintiff and defendant, are bound by the definition of actual cash value which I have just quoted to you insofar as their rights under this insurance policy are concerned. Therefore, the cost of the lumber does not fix the measure of damages, but it is the actual cash value, as I have already defined to you, at the time and place of loss which measures the rights of the parties as to the amount of recovery if the plaintiffs are entitled to recover." While counsel for the defendant, both in this ground itself, and in their brief, concede that this excerpt from the charge is correct as an abstract principle of law, and though they do not complain that the excerpt is not adjusted to the pleadings and the evidence, for it most certainly is so adjusted, counsel for the defendant contend that this excerpt tended to cause the jury to believe that the cost of the lumber could not be and was not a factor that could be considered by the jury in its determination of the value of the rough green lumber in its condition as it existed at the time and place of loss; and also contend that it tended to cause the jury to believe that the defendant acted in bad faith when it considered the cost of the lumber as one of the several factors in the defendant's computations and efforts to determine the measure of its contractual responsibility to the plaintiffs. As counsel for the defendant concede the accuracy of the charge and do not complain that it is not adjusted to the pleadings and the evidence, this court is at a loss to understand by what process of ratiocination defendants arrived at the contentions posed in this ground. How this excerpt from the charge could have harmed the defendant in the way and manner alleged we are at a loss to understand. Suffice it to say that this ground is without merit.
13. In special ground 22 complaint is made of the following excerpt from the charge: "It is your duty to look to all of the evidence, both oral and documentary, and determine the true actual cash value of the lumber on hand at the time of the loss, that is, its market value as existed in Eastman, Georgia, On the date of the fire, less discounts and unincurred expenses to which it would have been subject had no loss occurred." This excerpt from the charge was adjusted to the pleadings and the evidence and the fact that the court, without request did not "state that 'actual cash value' and 'market value' were the same as and equivalent to 'replacement' cost at the time and place of loss, as provided by the wording of the insurance contract at issue,' " is not a proper assignment of error. See in this connection the cases cited on this point in Division 11 of this opinion.
14. On special grounds 24 and 25 complaint is made of two separate paragraphs from the charge, the first excerpt set out in special ground 24 is immediately followed in the charge by the excerpt set out in special ground 25:
"By bad faith is meant an unfounded, frivolous refusal to pay. In determining whether or not there has been bad faith, you can look to all the evidence and determine for yourself whether the refusal to pay was in bad faith. This is solely a question of fact for you to determine."
"If you find that the refusal was in bad faith, you can award both damages, not in excess of twenty-five percent of the loss, and reasonable attorneys' fees, or you can allow damages without allowing attorneys' fees, or you can allow attorneys' fees without allowing damages. This is the question for you to decide, that is to the allowance of damages and attorneys' fees. Another question for you to determine is whether or not the defendant is liable for the full amount sued for on the loss described in the policy."
In special ground 26 complaint is made of an excerpt from the charge which appears somewhat later in the charge than those of which complaint is made in special grounds 24 and 25. This excerpt in question is set forth in the two paragraphs which follow: "Now, gentlemen of the jury, as I have already stated to you, plaintiff has sued the defendant for the principal sum, the amount of loss they contend is $167,726.15, they contend that's the amount of the value of the property lost, or destroyed by fire September 4, 1957.
"Also, the plaintiff sues for damages and attorneys' fees and the question which you are to determine is whether the plaintiff in addition to the principal amount of loss, is entitled to an additional amount for damages, and also a reasonable attorneys' fees in additional (sic) to the principal sum of the loss sustained by plaintiff as alleged in the petition."
The fact that these excerpts from the charge did not, in the absence of a timely proper request, contain instructions of other principles of law, is an improper assignment or error in a special ground of a motion for a new trial. See cases cited on this point in Division 11 of this opinion. No one of these special grounds assigns error upon repetitiveness, and errors, assigned in the brief for the first time, and which require reference from one special ground to another present no question for adjudication. Allen v. Bone, 202 Ga. 349, 352 (3) (43 S. E. 2d 311).
While the rule that a ground for motion for new trial need not be complete within itself as modified by Code (Ann.) 6-901, the statute is not so changed as to permit one ground of a motion for new trial to refer to another. The Code as amended (Ga. L. 1957, pp. 224, 232) means that a ground may be considered as complete which does not set out parts of the pleadings and evidence necessary to a clear understanding of the ground, provided the record pages where such parts of the pleadings and evidence appear are designated.
16. In special ground 23 error is assigned upon the following excerpt from the charge: "I charge you that if from consideration of all of the evidence, both oral and documentary, you conclude that Mr. Jessup with intent to defraud defendant wilfully and fraudulently made material misrepresentations as to the insurance or subject thereof, he would not be entitled to recover. In this connection, I charge you that 'material misrepresentation' as used by our law means substantial as contrasted to slight and insignificant." The vice attributed to this excerpt from the charge is that the words "with intent to defraud the defendant," were not necessary and that "actual dishonesty of purpose in knowingly making the material misrepresentation is not necessary." This contention is decided adversely to the defendant in American Alliance Ins. Co. v. Pyle, 62 Ga. App. 156, 164 (4) (8 S. E. 2d 154), and citations; Liverpool & London & Globe Ins. Co. v. Stuart, 67 Ga. App. 184, 191 (9) (19 S. E. 2d 822).
17. In special ground 10 error is assigned on the refusal to give the following timely written request to charge: "Under the terms of the contract being sued on by plaintiff in this instance, the plaintiff W. L. Jessup, Jr., is limited in the amount that he may recover to the actual cash value of the property destroyed at the time of the loss, but not exceeding the amount which it would cost to replace the property with material of like kind and quality within a reasonable time of such loss." Thee trial court. did not err in refusing this request to charge as the defendant did not reserve in the policy or plead in its answer the right to replace the material destroyed with material of like kind within a reasonable time. See Code 56-704. The request was not adjusted to the pleadings and the evidence.
18. In special ground 11 error is assigned on the refusal to charge the following timely, written request: "The plaintiff is not entitled to recover any amount by way of damages or attorneys' fees in excess of the amount of liability under the policy unless you find that the defendant acted in bad faith in refusing to pay the demand of the plaintiff. To establish such bad faith authorizing damages and attorneys' fees it must be shown that defendant's refusal to pay was frivolous and unfounded. If you find that the defendant had probable cause to refuse to pay the amount of the demand you should find in favor of the defendant as to damages and attorneys' fees. Refusal of an insurer to pay a demand by reason of doubt that is not frivolous or unfounded as to whether insurer is liable to plaintiff for the amount of the demand is not bad faith. Refusal of defendant to pay the amount of the demand would not be bad faith if made by reason of obscurity and complication of plaintiff's books and records examined by defendant for the purpose of determining the amount of the loss for which defendant may be liable, and further refusal by defendant to pay the amount of plaintiff's demand would not be bad faith should you find that defendant offered to pay all that it, defendant, found and believed to be due by examination of the available books, records, and inventories. In event of honest doubt or dispute as to the amount of liability an insurer is entitled to determination of the issue by the courts without subjecting itself to additional liability for damages and attorneys' fees, and if you find such honest doubt or dispute as to the amount of liability your verdict should be in favor of the defendant as to damages and attorneys' fees. The burdens upon plaintiff to prove the alleged bad faith of defendant."
19. However much counsel for the defendant may feel that the defendant was dealt a coup de Jarnac by this court in its ruling on the former appearance of this case in this court (Lumbermen's Underwriting Alliance v. Jessup, 98 Ga. App. 305, 105 S. E. 2d 596), that case established it as the law of the case beyond peradventure that the defendant was subject to suit under the terms of the policy (29122) and was subject to suit under the terms of Code 56-706; which is to say that under rulings made in the former case, the plaintiff, upon proper proof was entitled to recover the amount of his loss under the terms of the policy, and damages and reasonable attorneys' fees under the terms of Code 56-706 upon proper proof of the defendant's bad faith in refusing to pay the plaintiff the amount of its loss within the requisite statutory time. Unquestionably the policy in the amount of $188,000 was, by its terms, and under the evidence, in force and effect at the time when the fire causing the loss occurred on September 4, 1957, as our examination of the brief of evidence reveals that the premium on the policy had been paid and we find not the slightest intimation in the evidence to sustain the defendant's plea that the policy was void as the result of the plaintiff's false swearing or wilfully false or fraudulent representations as to material facts made before or after the policy was issued, or before or after the fire occurred; and we might add parenthetically that counsel for the defendant make no mention in their briefs that the policy was void as the result of false swearing or wilfully false or fraudulent representations on the part of the plaintiff. It also appears from the evidence without dispute that on October 7, 1957, the plaintiff furnished the defendant with a detailed proof of loss, under oath, amounting to the sum of $167,726.15, which sum was based on the actual cash value of the property at the time and place of loss less all discounts and unincurred expense to which the stock of lumber on hand on the date of the fire would have been subject had no loss occurred.
Much moment is made by counsel of the question of whether the loss claimed is such as that covered by the policy. While on the face of the policy the plaintiff is insured "to the extent of the actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property within a reasonable time after such loss," in a rider or endorsement of the policy it is provided: "Market Value Clause: Lumber No. 583: It is a condition of this policy that the actual cash value of stock of lumber or timber products covered hereunder shall be the market price of such stock as it existed at the time and place of loss less all discounts and unincurred expenses to which such stock would have been subject had no loss occurred. The values as determined under this clause shall be considered as the actual cash value in the application of any clauses forming a part of this policy."
Under a proper construction of the policy of insurance, that is, most strongly against the insurer (U. S. Fidelity & Guaranty Co. v. Corbett, 35 Ga. App. 606, 610, 134 S. E. 336; Johnson v. Mutual Life Ins. Co., 154 Ga. 653, 115 S. E. 14), it must have been the intention of the parties to provide for indemnification of the insured against loss of the value of the lumber, calculated upon the basis of its value in a finished state, otherwise the provision "less all discounts and unincurred expenses to which such stock would have been subject if no loss occurred," would be meaningless. In a policy somewhat akin to the present one the New York Court of Appeals (the court of last resort in that State), in construing a somewhat similar provision of an insurance policy, had this to say: "We cannot agree with the defendant that, under this clause, the market value of the buildings destroyed was the exclusive measure of the plaintiff's loss. Insurance is thereby limited to 'actual cash value' (ascertained with proper deductions for depreciation) of the property at the time of loss or damage. Value ascertained by market price is necessarily expressive of a suitable deduction for depreciation. If 'actual cash value' were synonymous with 'market value,' the words in parenthesis, to have force, would require depreciation to be twice subtracted." McAnarney v. Newark Fire Insurance Co., 247 N. Y. 176 (159 N. E. 902). If this policy presently under consideration was not intended to insure the plaintiff against the loss of the sale of his finished product, which we insist it does, what possible purpose could there have been for inserting the "Market Value Clause" and what possible meaning could be attributed to the phrase therein: "the market price of such stock as it existed at the time and place of loss less all discounts and unincurred expenses to which such stock would have been subject had no loss occurred?" (Emphasis by the court.)
It appears from the evidence that Jessup reported in his monthly inventory to the defendant and in his proof of loss the value of the lumber in a finished state less costs of production and arrived at the figure which the jury awarded him. The fact that his method of keeping books, and the method adopted by a certified public accountant to determine the value of the property were different in no wise impeached, obliterated, or contradicted the plaintiff's evidence on the subject of the amount of his loss covered by the policy of insurance. This is not an "iron safe policy" nor does the policy require any special bookkeeping or accounting system to be used in determining the value of the property.
But, even if we concede, which we do not, that the plaintiffs used an improper method in arriving at the value of their loss, they alleged in the petition as finally amended that the method used was the proper measure of damage. The defendant's demurrer to this aspect of the plaintiffs' petition was overruled and stands unreversed. This immutably fixed it as the law of the case that the plaintiffs were entitled to recover their loss upon proper proof and also established the element of damage to be considered in determining the amount of the recovery. Georgia Northern Railway Co. v. Hutchins, 119 Ga. 504 (4) (46 S. E. 659); Hicks v. Revels, 142 Ga. 524 (83 S. E. 115).
No extended discussion is required to determine that the evidence authorized the recovery of damages and reasonable attorney's fees under the provisions of Code 56-706 in view of the rulings made on the first appearance of this case in this court and in view of what has been said on the subject in the companion case to the present one, this day decided. The jury was authorized to find that the defendant had no genuine belief after December 11, 1957, the date of the demand for payment, that Jessup had been guilty of any fraud or misrepresentation or that the claim of loss was excessive or improper. The defendant constantly denied liability altogether and even sought to have the Federal courts to declare the policy void. Its offers to settle with the plaintiff for sums less than he claimed were each coupled with threatening innuendoes. Under all these circumstances the jury was authorized to enter, as it did, a verdict for damages and for reasonable attorneys' fees. See Missouri Ins. Co. v. Lovelace, 1 Ga. App. 446, 467 (58 S. E. 93); National Life &c. Ins. Co. v. Moore, 86 Ga. App. 618 (72 S. E. 2d 141). The trial court, consequently, did not err in denying the motion for new trial as amended.
Judgment affirmed. Nichols, J., concurs. Felton, C. J., concurs in the judgment.
Hal M. Smith, Nelson & Nelson, Martin, Snow, Grant & Napier, contra.
Larsen & Larsen, J. Hamilton Napier, Bloch, Hall, Groover & Hawkins, for plaintiff in error.
DECIDED SEPTEMBER 24, 1959 -- HEARING DENIED OCTOBER 16, 1959 AND OCTOBER 27, 1959.
Saturday May 23 00:47 EDT


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