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NATIONAL LIFE & ACCIDENT INS. CO. v. MOORE.
33348.
Complaint on life policy; from Whitfield Superior Court-- Judge Paschall. October 9, 1950.
SUTTON, C. J.
The plaintiff's petition set out a cause of action good against the defendant's general demurrer, and the trial court did not err in overruling the demurrer.
Mrs. Fay Moore sued the National Life & Accident Insurance Company of Nashville, Tennessee, and alleged substantially that the defendant, on the 10th day of June, 1949, through its authorized agent, P. L. Langston, accepted from Ernest L. Moore, the husband of the plaintiff, an application for life insurance in the sum of $1000, and received from him the sum of $2.15 for the first full monthly premium, for which a receipt was issued by the defendant, a copy being attached to the petition and made a part thereof, and is as follows:
"NOT VALID IF ALTERED OR IF SERIAL NUMBER AMOUNT AND DATE DIFFERENT FROM APPLICATION.
"RECEIVED of Ernest L. Moore a deposit of 2.15 Dollars to cover all of the first monthly premium on proposed insurance, if issued, for $1,000.00 on the life of App for which an application numbered as below is this day made to The National Life and Accident Insurance Company. Such deposit will be returned (a) if application is declined or (b) if a policy is issued other than as applied for and applicant declines to accept it. No insurance is in force on such application unless and until a policy has been issued thereon and delivered in accordance with the terms of such application, except that when such deposit is equal to the full first premium on the policy applied for and such application is approved at the Home Office of the Company for the Class, Plan and Amount of insurance and at the rate of Premiums as so applied for, then, without affecting the issue date and anniversaries as set forth in the policy, the amount of insurance applied for will be in force from the date of this receipt, but no obligation is assumed by the Company unless and until such application is so approved. If a policy is offered by the Company that is not in all respects the same as the policy applied for, such policy will not take effect unless and until it has been accepted by the applicant and the additional premium therefor, if any, has actually been paid to and accepted by the Company during the lifetime of the applicant.
"Date 6/10 1949. No. 468919 D. P. L. Langston Agent District Rome, Ga.
"If policy is not delivered to you within 60 days from date, this receipt should be presented at the District Office, or the Home office in Nashville, Tenn., for redemption."
The plaintiff alleged that the deposit of $2.15 covered all of the first full monthly premium on the proposed policy of insurance; that said application for the life insurance policy was approved at the home office of the defendant company for the class, plan, the amount of insurance, and the rate of premium as applied for; that the defendant issued a policy of insurance numbered 1601328 on the life of Ernest L. Moore, with the plaintiff as beneficiary; that the date of the approval of said application and the issuance of the policy is unknown to the plaintiff, but well known to the defendant; that the insured, Ernest L. Moore, died on June 12, 1949, from injuries received in an automobile accident; that the defendant upon learning of the death of the insured failed and refused to deliver said policy of insurance to her and has continued in said refusal; that the said life insurance was in force and effect on the date of the death of the insured; that the defendant has refused payment to the plaintiff under said policy of life insurance; that she has requested the defendant company to surrender the policy of insurance to her, but that it has failed and refused to do so, and therefore she is unable to attach a copy of the pertinent parts of said policy to her petition, and as to her, against the defendant, such requirement is waived.
The plaintiff amended her petition by attaching thereto a copy of the application of her husband to the defendant company for the life insurance policy, dated June 10, 1949, and referred to as Exhibit B.
The defendant filed a general demurrer to the petition as amended. The trial judge overruled the demurrer, and the defendant excepted.
(After stating the foregoing facts.) The plaintiff's petition shows that her husband made application to the defendant company for a policy of life insurance for $1000, on June 10, 1949, and that he paid the full amount of the first monthly premium at that time. The insurance company gave him a receipt for $2.15, the amount of the premium, which stated, "That when such deposit is equal to the full first premium of the policy applied for and such application is approved at the Home Office of the Company for the Class, Plan and Amount of insurance and at the rate of Premiums as so applied for, then, without affecting the issue date and anniversaries as set forth in the policy, the amount of insurance applied for will be in force from the date of this receipt, but no obligation is assumed by the Company unless and until such application is so approved." It is alleged that this application was approved at the home office of the defendant company for the class, plan, the amount of insurance, and the rate of insurance as applied for, and that a policy of insurance on the life of Ernest L. Moore with the plaintiff named as beneficiary was issued by the defendant, the policy being numbered 1601328.
If the application was approved at the home office of the defendant as alleged, then under the terms of the premium receipt the insurance became effective from the date of such receipt. Was the application so approved? This is the controlling question in the case. The binder and the approved application for insurance would constitute a valid contract of insurance. This would be true, although the applicant died before the application was approved, since the insurance became effective from the date of the receipt and not from the date of approval of the application. The receipt was a binder, conditioned only upon the approval of the application by the company at its home office. "A binder is a contract of insurance in praesenti, temporary in its nature, intended to take the place of an ordinary policy until the same can be issued. It is a short method of issuing a temporary policy for the convenience of all parties, to continue, unless sooner canceled, until the execution of a formal policy." Fort Valley Coca-Cola Bottling Co. v. Lumbermen's Mutual Cas. Co., 69 Ga. App. 120 (3) (24 S. E. 2d, 846). It was held in New York Life Ins. Co. v. Babcock, 104 Ga. 67 (1, 2) (30 S. E. 273, 42 L.R.A. 88, 69 Am. St. R. 134), that "A contract of life-insurance is consummated upon the unconditional written acceptance of the application for insurance by the company to which such application is made. Actual delivery of the policy to the insured is not essential to the validity of a contract of life-insurance, unless expressly made so by the terms of the contract."
It is said in 2 A.L.R. 2d, 975, that "The following cases support the view that recovery should be granted under a binding receipt providing that the contract should date back to the date of the application or the medical examination if the application is approved at the home office of the company, where the change in the physical condition of the applicant took place after the completion of the investigation or medical examination required by the insurer but before final approval of the application. United States.--Gaunt v. John Hancock Mut. L. Ins. Co. (1947; CCA2d NY) 160 F2d 599 (cert den (1947) 331 US 849, 91 L ed 1858, 67 S Ct 1736). Arkansas.--Cooksey v. Mutual L. Ins. Co. (1904) 73 Ark 117, 83 SW 317, 108 Am St Rep 26 (dictum). Kentucky.--Indiana Nat. L. Ins. Co. v. Maines (1921) 191 Ky 309, 230 SW 54 (dictum). North Carolina.--Gardner v. North State Mut. L. Ins. Co. (1913) 163 NC 307, 79 SE 806, 48 LRA NS 714, Ann Cas 1915B 652 (dictum). Washington.--Starr v. Mutual L. Ins. Co. (1905) 41 Wash 228, 83 P.116."
The plaintiff in error contends that the application in the present case was not approved by the company at its home office, that this appears from the copy of the application attached to the petition, and that the exhibit attached controls instead of the allegations of the petition that the application was approved.
The application shows that it was taken by P. L. Langston, agent for the insurance company, on June 10, 1949, and that his report was made on that date. The application appears regular on its face and there is nothing to indicate that it might have been rejected by the company. The "District Office Report" was made and signed by Catherine Wright, as secretary, on June 14, 1949, and states that the application had been carefully reviewed in the district office as required by the rules of the company. Then, near the bottom of the application, "Non-Medical" was marked "OK" by "E. B.", and after "Feature", or the kind of insurance, "Life", the word "approved" was checked or marked with "O" and the rating was checked or marked the same way. This entry was dated June 10, 1949, and was signed by some initials, apparently the initials of two parties. In the upper left hand corner of the application, marked, "For Home Office Use," is the number, 1601328, which the plaintiff alleges is the number of the policy. There is nothing to show or indicate that the application was rejected or disapproved. The petition alleges that the application was approved by the defendant company, and also alleges that the policy was issued. The petition was good against the defendant's general demurrer, and the trial court did not err in overruling the demurrer.
In so holding, we have not overlooked the principle of law and cases cited by the plaintiff in error to the effect that a petition or pleading when challenged by demurrer should be construed most strongly against the pleader.
The case of Maddox v. Life & Casualty Ins. Co., 79 Ga. App. 164 (53 S. E. 2d, 235), cited and relied on by the plaintiff in error, is different on its facts from the present case, and is not controlling on the question for decision here. The receipt in that case provided, substantially, that where the full first premium on the policy applied for was paid, and the company was satisfied at the time of the completion of the medical examination or part B of the application if no medical examination was required, and the risk was acceptable to the company under its rules for the plan and amount of insurance applied for, then the insurance would be in force as of the day of the completion of the medical examination or part B of the application, if such examination was not required, but otherwise no insurance would be in force under the application unless and until the policy was issued and delivered, and the full first premium paid to and accepted by the company during the lifetime and insurability of the applicant. That case was decided on the theory that no final completion of the application was shown. The application and receipt provided that the insurance was to become effective after such a completion of part B of the application, and not from the date of the application.
Mitchell & Mitchell, Walter H. Bolling, contra.
William F. Buchanan, Mary J. Nelson, for plaintiff in error.
DECIDED FEBRUARY 9, 1951.
Saturday May 23 05:31 EDT


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