LIFE INSURANCE CO. OF GA. v. Lawler , 211 Ga. 246 ( 1954 )

Candler, Justice.

On April 24, 1950, Life Insurance Company of Georgia issued a policy of insurance on the life of Albert LaFayette Lawler. Mrs. Lillian L. Lawler, the insured’s wife, was the beneficiary named therein. The policy lapsed for nonpayment of premiums, and on November 24, 1951, Lawler applied in writing for its reinstatement. So far as it is material to a consideration of the questions presented to this court for decision, the company’s printed form of application, which the insured used, called for the following information: “6. Name all symptoms, diseases or disorders for which you have consulted a physician or other practitioner during the last five years. Give dates and particulars. If none, so state.” And “7. Have you ever had a surgical operation or been a patient in a hospital or sanitarium? If so, explain fully.” To each of these questions he answered, “No.” On the information which the applicant furnished, the insurer reinstated his policy on November 29, 1951; and he died on July 13, 1952, from a heart attack. After more than 60 days had elapsed since proofs of the insured’s death were submitted to the insurer, the beneficiary brought suit on the policy. The defendant pleaded not indebted; and further, that the quoted representations which the insured made for the purpose of effecting a reinstatement of his policy were knowingly false; that, in consequence of the incorrect information which the insured gave, it was misled as to material facts respecting the risk; and that the insured’s false and fraudulent misrepresentations induced it to reinstate his policy, which it would not have done had it been correctly apprised of his physical condition. With the filing of its answer, the defendant paid into the registry of the court $116.50, an amount equal to the premiums which the insured had paid to it; also, a consent for its withdrawal at any time by the plaintiff.

On the trial, the defendant’s counsel admitted execution of the policy, that it was reinstated on November 29, 1951, that proper proofs of death were duly filed, that demand for payment ■ of the policy was made by the beneficiary, and that the defendant had refused to pay the amount stated in the policy. Dr. T. H. Moss testified for the plaintiff that, during March, 1951, he saw and talked to the insured in a professional capacity; that the insured was then having severe pain in his epigastrium and in his stomach region; and that, because of its ulcerated condition, he removed by surgical operation about four-fifths of the insured’s stomach on March 19, 1951. ' Guy Johnson, Harry Bond, and Tom Teat testified for the plaintiff, that the insured was a man of good character. S. R. Parris, testified for the defendant that he had worked for the insurer since 1947; that he filled out the insured’s application for the reinstatement of his lapsed policy; that he specifically asked the insured to answer questions 6 and 7 of the application; that he correctly put down the answer to each of those questions; and that, after the application was fully filled out, the applicant read it and then signed it. There was no evidence showing or tending to show that the defendant had any knowledge of the falsity of the information imparted by the insured’s reinstatement application until after his death. On motion therefor, a verdict for the defendant was directed by the court. On grounds which will be dealt with in the opinion, the plaintiff timely moved for a new trial, her amended motion for which was denied, and she sued out a writ of error to the Court of Appeals. That court reversed the trial court (Lawler v. Life Insurance Co. of Ga., 90 Ga. App. 481, 83 S. E. 2d 281), and, on application therefor, we granted the writ of certiorari.

In the application to this court for the writ of certiorari, it is alleged that the Court of Appeals erred in holding: “In an action by a beneficiary on an insurance policy, where the company defends on the ground that the insured in an application for reinstatement of the policy answered certain questions falsely and fraudulently which materially affected the risk, evidence of the good character of the insured is alone sufficient to authorize a jury to find that no fraud was committed, even as against the uncontradicted testimony of an insurance agent as to facts which if true necessarily established the fraud.” To clear the way for such a ruling, the Court of Appeals, by the concurring vote of five of its six judges, reviewed and overruled a decision holding to the contrary in Henderson v. Jefferson Standard Life Insurance Co., 39 Ga. App. 609 (2) (147 S. E. 901), which was prepared for the Second Division of that Court by Judge Bell and in which Presiding Judge Jenkins and Judge Stephens concurred. In overruling the Henderson case — if, under section 2 of an act which the legislature passed in 1945 (Ga. L. 1945, p. 232), it could be legally reviewed and overruled by the concurrence of five judges when the other judge of that court was not participating because of his disqualification — and in making its own decision in the instant case, the Court of Appeals relied largely upon the rulings of this court in several criminal cases where evidence of the defendant’s good character was introduced, and, also, upon the ruling of this court in German-American Mutual Life Assn. v. Farley, 102 Ga. 720 (29 S. E. 615). Farley’s case, as we view it, affords no support for the overruling of Henderson’s case or for the ruling here complained of. In the Farley case, as shown by the statement of facts preceding the opinion, the insured stated in his application for a policy that he had been rejected for insurance only by the Penn Mutual Life Insurance Company, and the defendant relied on the falsity of that representation for its defense; but, on the trial of the case, a general agent of the company testified that he filled out the insured’s application, that he then personally knew the applicant had been rejected for insurance by several other companies, and that the insured did not represent to him that he had been rejected for insurance only by the company mentioned in his application. There was also undisputed evidence that the president of the company, about three months before the death of the insured, was told that he had been rejected for insurance by other companies when he made his application to it for insurance; and, notwithstanding this, the insurer accepted monthly premiums from the insured up to the date of his death. There, as in the instant case, testimony was introduced which showed the insured to be a person of good character. Farley, as executor of the insured’s estate, recovered a judgment for the full amount of the policy, and this court in affirming the judgment said (at p. 742): “If these representations warranted to be true were any part of the inducement to the defendant to enter into its engagement, upon learning that they were false it should immediately have repudiated the contract and then offered to rescind. When it accepted the premiums with a knowledge that the representations were untrue, it elected to affirm the contract notwithstanding such untrue representations; and having received from [the insured] McArdle in his lifetime the money in satisfaction of the instalments due, paid in pursuance of and in accordance with the contract of insurance, it is, after his death, estopped to deny the validity of the contract under which it received his money.” But, in another division of the opinion in Farley’s case, this court also said (at p. 745): “We think the issue in this case involved directly the character of the assured. He was charged with having perpetrated a gross fraud upon the insurance company. Evidence of his good character was admissible to rebut any inference unfavorable to him which might have been deduced from the evidence offered against him.” That this statement as to the probative value which the jury may place upon good character evidence was purely obiter dictum, is clearly demonstrated by the testimony in Farley’s case to which we have heretofore alluded. Estoppel by conduct, and not the sufficiency of good-character evidence alone to rebut positive and uncontradicted evidence of fraud, was the ground upon which this court affirmed the judgment in Farley’s case. Hence, the case in hand is not controlled by the unanimous ruling of this court in Farley’s suit on the policy of insurance there involved.

In Northwestern Life Insurance Co. v. Montgomery, 116 Ga. 799 (43 S. E. 79), where the facts are in all material respects like those in the instant case, this court by the concurring vote of all the Justices, except Justice Lumpkin, who was absent, reversed a judgment which the plaintiff had recovered against the defendant in an action on a policy of insurance. There, as here, the evidence of the insurer showed without contradiction that the insured obtained his policy in consequence of false and fraudulent representations as to facts material to the risk; and to rebut the evidence of actual fraud, the plaintiff relied solely upon proof that the applicant was a man of good character, and “not the kind of man to enter into a scheme to defraud an insurance company.” Notwithstanding such proof of the insured's good character, this court in reversing that case, and in an opinion which Chief Justice Simmons prepared for the court, held that a verdict for the insurer was demanded by the evidence. While Montgomery’s case is not a binding precedent, we nevertheless think it lays down a sound rule of law; and, being of that opinion, we will follow it in the instant case. And since the decision in Henderson’s case is in harmony with the ruling in Montgomery’s case, the Court of Appeals should have followed it; as to that court, Montgomery’s case is a binding precedent though not unanimous. Code (Ann.) § 2-3708. See Moss v. Myers, 12 Ga. App. 68 (1) (76 S. E. 768). While evidence of the insured’s general good character is relevant and admissible in a suit on his policy of insurance, where the insurer defends on the ground that he perpetrated a fraud on it in procuring his policy (Code § 38-202), yet, in a case where such fraud is shown by witnesses who swear positively to facts sustaining the defense of fraud, the jury is not authorized to find from evidence of the insured’s good character alone that the plaintiff has shown his right to recover by a preponderance of the evidence. In such a case, and just as the Court of Appeals held in Henderson’s suit, “evidence as to the insured’s character for honesty and integrity would not, as against the other evidence, be sufficient to make the question of his fraud in procuring the policy an issue of fact for determination by the jury so as to prevent the direction of a verdict in favor of the insurer upon such defense.” In a civil case the plaintiff is only required to show his right'to prevail by a preponderance of the evidence; but in a criminal case, where “a greater strength of mental conviction is held necessary to justify a verdict of guilty,” the State must show the guilt of the accused to a moral and reasonable certainty and beyond a reasonable doubt. Code §§ 38-105, 38-110; Addison v. State, 198 Ga. 249 (31 S. E. 2d 393). In a criminal prosecution, where the accused enters upon the trial of his case with a legal presumption of innocence in his favor and introduces evidence of his general good character, the jury may conclude from it alone that the State has not overcome the presumption of his innocence or that the State has failed to show his guilt to a moral and reasonable certainty and beyond a reasonable doubt, though there be positive and uncontradicted testimony tending to show his guilt. Shropshire v. State, 81 Ga. 589 (8 S. E. 450). Therefore, since the burden of proof which rests upon the plaintiff in a civil suit is materially less than the burden which the State must carry in a penal prosecution, it necessarily follows that the several criminal cases which the Court of Appeals cited and relied upon as authority for its ruling are neither controlling in this case nor in point.

The Court of Appeals also held that “The [trial] court erred in admitting in evidence the testimony of a physician that a mole was sometimes a pre-cancerous type when there was no evidence that the insured had a mole.” The petition for certiorari assigns error on this ruling. Respecting it, the record shows: The testimony complained of was given by Dr. T. H. Moss while being cross-examined by counsel for the defendant. To its admission, Mr. Clower, counsel for the plaintiff, made the following objection: “In view of the doctor’s statement, we object to any further testimony of a speculative nature, in view of the fact that the examination shows this was non-cancerous tissue. As to what might or might not occur in other cases as to cancer.” The Court: “I will sustain the objection. Mr. Duck-worth, I will let you ask him as to what his diagnosis was as to this particular case.” Mr. Duckworth: “That is all I am asking about, is this particular case.” The Court: “I thought you were asking about pre-cancerous conditions that men develop and die from cancer or did not develop cancer. I will let you ask about this man.” Mr. Clower: “We have no objection to this man. We want it restricted.” Mr. Duckworth: “I did ask him whether or not a man might have a mole, not a cancer, but a pre-cancerous that might develop.” Mr. Clower: “This is conjectural. This is not a mole involved in this case.” The Court: “I will let him answer that question.” Following this colloquy, the witness gave no further testimony with reference to a mole. Since there was no valid objection to the admission of the testimony complained of, nor a motion on any ground to rule it out of evidence, if it was in fact admitted, but only an objection “to any further testimony of a speculative nature,” and since no such further testimony was offered, it necessarily follows that the trial judge did not err in refusing to grant the movant a new trial on this special ground of her motion. Hence the Court of Appeals erred in its ruling as to this.

For the reasons given in the two preceding divisions of this opinion, it follows that the judgment rendered by the Court of Appeals is erroneous.

Judgment reversed.

Justices Candler, Hawkins and Almand, and Judge Mallory C. Atkinson concur. Presiding Justice Wyatt and Justices Head and Mobley dissent. Chief Justice Duck-worth disqualified.