Schmidt v. General Accident, C. Assur. Cor. , 68 Ga. App. 519 ( 1942 )

It appearing affirmatively from the plaintiff's own testimony that he was not "continuously ill and confined to his home where he was attended by a physician regularly," during the period for which he seeks to recover monthly indemnity under the policy, the court did not err in directing a verdict for the insurance company.

DECIDED DECEMBER 4, 1942. Ludwing Schmidt filed suit against General Accident, Fire Life Assurance Corporation Ltd., in which he alleged that on May 26, 1933, he procured a policy of insurance with the defendant in which the defendant agreed, in consideration of a monthly premium of $6.45, to insure the plaintiff for loss of life, limb, sight, or time by accidental means, and for loss of time by illness, and agreed that should the plaintiff, during the life of the policy, "be necessarily and continuously confined within the house and visited therein at least once in every seven days by a legally qualified physician," the defendant would pay him a monthly indemnity of $100 for twelve consecutive months; that the plaintiff paid the premiums through November 1940; that on October 2, 1940, the defendant notified the plaintiff that after the first of November 1940, it did not desire to continue the policy in force; that the defendant did not at that time return to the plaintiff the unearned portion of the premium which had been actually paid to it; that the defendant, on November 1, 1940, returned to the plaintiff his check for $6.45 representing the premium for the month of November 1940, and notified the plaintiff that the policy was cancelled and that it would not accept any further premiums thereon; that on July 1, 1940, the plaintiff became ill, and since that date and up to the filing of the petition (April 23, 1941), has been constantly ill, confined to his home and has been visited at least once in every seven days by a legally qualified physician; that at the time the defendant wrote the letter of October 2, 1940, to the plaintiff and at the time it wrote the letter of November 1, 1940, and returned the plaintiff's check for the November 1940 premium, the defendant knew that the plaintiff was ill and would probably be ill for a number of months; that the letter was written and the policy cancelled for the purpose of avoiding liability on account of the illness of the plaintiff; that this conduct of the defendant was in bad faith and for the purpose of defrauding the plaintiff out of his right to recover the monthly benefits provided under the policy; that before October 2, 1940, the defendant had actual knowledge of its liability for further claims, and absolutely refused to pay any further claims to the plaintiff, and by this conduct the defendant waived the right to receive further claims; that the defendant stated that submitting further proofs was unnecessary and would not be required as they would not be paid; that under the terms of the policy the plaintiff is entitled to receive the sum of $100 per month for the months from September 1940 through April 1941, and these sums are now due; that the attempt to cancel the policy was not in accordance with its terms and was without effect, and the policy still remains in force; that the plaintiff is ready to pay the premiums due on the policy at any time the defendant will accept them, and is willing for the premiums due to be deducted from the amount recovered; that the plaintiff has complied with all the terms and conditions of the policy; that under the terms of the policy the defendant is liable to the plaintiff for the monthly payments set out for which the plaintiff prayed judgment.

The defendant filed its answer in which it denied liability. For further answer it alleged that after November 1, 1940, it notified the plaintiff that it did not desire to continue the policy in force; that this was in accordance with the terms of the policy; that there were no unearned premiums at the time and there was no claim pending against the defendant at the time it cancelled the policy; that the plaintiff accepted the return of his check and has at no time since then tendered to the defendant any premiums which would have become due had the policy remained in effect after November 1, 1940; that the defendant has paid the plaintiff for the disability suffered by him as the result of the illness of July 1, 1940; that this illness has not continued since that date up until the filing of the suit; that the plaintiff has not been constantly ill and confined to his home and visited at least once in every seven days by a physician; that on August 10, 1940, the defendant executed and caused to be delivered to the plaintiff a proposition for settlement of any and all liability on its part under the policy as the result of the illness which the plaintiff then had; that the plaintiff lived in Savannah and a draft for $143.33 was forwarded to the Citizens Southern National Bank of that city which draft was attached to the proposition of settlement above referred to; that on the execution of this proposition the draft was delivered to the plaintiff and he in turn indorsed it and received the amount thereof pursuant to the proposition of settlement; that for this reason there has been a full and final settlement and compromise of any and all claims arising directly or indirectly, wholly or partially, out of any illness or accident which the plaintiff might have had before such proposition of settlement; that the plaintiff has not complied with the terms and conditions of the policy in so far as they relate to any liability of the defendant for any claim other than the one so compromised and settled, and that as to this claim the defendant admits that the plaintiff has complied with the terms of the policy and the defendant settled and compromised this claim with the plaintiff.

By an amendment the defendant alleged that it had inadvertently failed to attach a copy of the settlement agreement, which it attached and made a part of the amendment. In this amendment it struck the words "August 10, 1940," from the answer and inserted in lieu thereof "September 10, 1940." The exhibit attached to the amendment is as follows: "For the purpose of making a compromise or advance settlement in full of any and all amounts accruing to me now or in the future under policy No. XL 8404 by reason of loss from illness commencing or injuries sustained on or about June 25, 1940, I do hereby offer to accept the sum of one hundred forty-three and 33/100 dollars ($143.33), in consideration of which sum to me in hand paid, and in consideration of the waiver by the corporation of further proof of loss, I agree that the said corporation is hereby released from any and all liability of any kind whatsoever in connection with the aforesaid cause of disability and/or loss. This proposition, if accepted by the corporation within ten days from the date hereof, by issuance of check or draft to me, shall be fully binding upon me, my heirs and beneficiaries, as a full and final release as respects any and all claims arising directly or indirectly, wholly or partly, out of the illness or injuries aforesaid and/or all effects thereof, known or unknown. Submitted this 10th day of August 1940." This instrument was signed by the plaintiff under seal.

By a second amendment the defendant alleged that on September 10, 1940, the plaintiff received, indorsed and cashed a draft for $143.33; that there was stated on the face of the draft that it was "in full settlement of all claims under" the policy sued on "arising out of injuries sustained, or illness contracted, prior to the date hereof;" that on the back of the draft above the signature of the plaintiff was printed the following: "Receipt and discharge. Receipt of the amount hereof is acknowledged and in consideration thereof it is agreed that the company is hereby released and discharged of liability for injuries sustained, or illness contracted, as set forth on the face of this draft, and that in view of the foregoing the defendant is released and discharged from the cause of action sued upon and there has been a complete accord and satisfaction thereof."

By an amendment to the petition the plaintiff alleged that before September 10, 1940, he was continuously sick for approximately two months; that at this time and prior thereto he filed a claim and proof of illness with the defendant which showed that he had a serious attack of angina pectoris; that on such date the defendant paid him $143.33 for his previous illness; that at the time it did so the defendant knew that the disease with which the plaintiff was afflicted was incurable and the plaintiff would never be able to work again; that before the time he filed a further claim the defendant notified him that it was cancelling the policy and denied all liability thereon; that the defendant knew at the time the claim was paid and it cancelled the policy that the plaintiff was uninsurable and could not obtain insurance elsewhere, and knew that he would have a claim against the defendant for liability for twelve months after he became ill; that on October 2, 1940, the defendant notified the plaintiff that it was cancelling the policy, and on November 1, 1940, the defendant wrote the plaintiff a letter stating that the policy was cancelled and denied any further liability thereon; that on November 7, 1940, the plaintiff's attorney wrote the defendant protesting the cancellation of the policy and the denial of liability thereunder, and received no reply to the letter; that on January 2, 1941, Mrs. Pearl Burnette called the defendant's local agent in reference to the policy and this agent stated that the defendant denied all liability with reference thereto and that the policy had been cancelled by the home office; that afterwards the home office wrote Mrs. Burnette and denied all liability under the policy, and that before the time for additional proofs to be filed by the plaintiff the defendant had denied all liability under the policy and has continuously denied that any liability existed under such policy.

By a third amendment the defendant added a new paragraph to the answer in which it alleged that through error and mistake of the draftsman the proposition of settlement was improperly dated, but that the actual date of the execution of the proposition for settlement was September 10, 1940.

The plaintiff demurred to the answer as amended on the ground that no defense was therein set out. The judge overruled the demurrer and the plaintiff excepted pendente lite.

On the trial the plaintiff introduced evidence tending to support the allegations of his petition. It appeared from the evidence that the plaintiff became afflicted on June 25, 1940, with angina pectoris, coronary occlusion and myocardial failure. The evidence showed that the plaintiff operated a bakery in the City of Savannah and that his wife and others aided him in its operation. He was the proprietor and owner thereof. The plaintiff testified in part as follows: "After I made out this proof (No. 8) the defendant sent me a check — I think about a month afterwards. I had not recovered from my illness when I made out this exhibit H. . . That is the reason I signed this check here — to get the money. I did not understand at the time I was signing it that I was releasing all claims of every nature against the insurance policy. I was so much under dope and sleeping powder I did not know what I was doing. . . The first time I left the house after my heart attack was about August 13th. I was afraid if I got out and an agent of the company saw me they would think I was cheating, and I would not want to be a cheater, and would not want them to think I was trying to get money for nothing. When I tendered the check for November payment of my premium, I had a letter dated October 2nd, stating that they were cancelling the policy. I thought it might be a mistake about them cancelling the policy, because after my sickness I paid September and October premiums and they took it. I am able to do manual or physical labor for a little while, say a half of an hour or an hour, and I give in. I go in the store sometimes and I scale the ingredients and can't make it any further. . . I did not realize that when I signed this release I was cancelling the policy. . . The reason I signed the draft and blue slip, I needed the money very much. I understood that that was final for that illness and I have not had but one illness. The illness that I am suing for now is the same illness; the after effects of the same illness. I never did write the defendant any kind of letter stating that I claimed any other sum of money. Then they wrote me a letter on October 2nd, stating they were going to cancel the policy and would receive no further premium. . . I did not make any effort to notify them of my condition between Oct. 2nd and Nov. 1st, and did not make any claim, and I don't want any claim for the sickness. I don't want any more money for the sickness. I want only my insurance kept in force for future use. When I filled out this proof of loss, exhibit H, that was all I wanted to be paid for my illness and I have no complaint for the way the company treated me about that, absolutely none. The only thing that I am dissatisfied about is that they cancelled my policy and that is all I complain about, or that they should give me the money for the whole time I paid them — the premiums I paid — if they were going to cancel the policy. . . I am sixty-seven years old. . . My average earnings prior to my illness was from $300 to $350 a month. After my illness and after August 14th, I went down to my place of business practically every day, sometimes I would stay home one or two days, according to how I felt. I did not use an automobile. The doctor would not let me drive on account of my condition. Sometimes I would walk to the bakery in ten minutes and sometimes it would take me a half of an hour. It is eight blocks from my house to the bakery, and I would walk there and back when I went to the bakery. I have got benches on the way where I would sit down and rest awhile and then go a little further."

In addition to the provisions hereinbefore noted the policy provided that "the corporation may cancel this policy at any time by written notice delivered to the insured or mailed to his last address as shown by the records of the corporation together with cash or the corporation's check for the unearned portion of the premiums actually paid by the insured, and such cancellation shall be without prejudice to any claim originating prior thereto."

The judge directed a verdict for the defendant. The plaintiff excepted pendente lite to the direction of the verdict and also moved for a new trial on the general grounds. To the judgment overruling the motion he excepted. (After stating the foregoing facts.) Without determining whether or not the plaintiff had released the defendant by acceptance of the draft for $143.33 and his execution of the release thereto appended, the plaintiff's testimony, construed most strongly against him, fails to show that he was for eight months, "necessarily and continuously confined within the house," and "visited therein at least once in every seven days by a legally qualified physician;" which condition, under the policy had to result from illness suffered by the plaintiff during the life of the policy in order for the defendant to be liable for the payment of the eight months indemnity. It appears under this testimony of the plaintiff that he was able to work for short intervals; that he did not stay at home as the result of the illness over one or two days at a time; that he would go to his bakery and help a little; that he would sit around and would feel badly and be unable to do much work; that he could do manual work for an hour at a time. This is not a case where the question of the plaintiff's disability or incapacity to work is involved, but it is one as to whether he was confined within the house as the result of illness occurring during the existence of the policy. It appears from the plaintiff's testimony that when he accepted the draft and signed the settlement proposition he understood that was final for the illness then suffered by him; that he has only had the one illness; that he never made any claim of the defendant for any other sum of money; that he did not make any effort to notify the defendant of his condition; that he did not "want any claim for the sickness;" that he did not "want any more money for the sickness;" but wanted "only my insurance kept in force for future use;" and that when he made his original claim for fifty days that was all he wanted to be paid for his illness, and the only thing he is dissatisfied about is that the defendant cancelled his policy and that he should have his money back. However, the suit is not one for the return of premiums, and is not one for the fraudulent cancellation of the policy, but it is one to recover monthly indemnity as provided in the policy on account of illness resulting in the insured being confined to his home and attended by a physician, such illness occurring during the life of the policy.

In National Life c. Insurance Co. v. Chastain, 46 Ga. App. 842 (169 S.E. 380), a case involving a policy with a similar cancellation provision, this court ruled that when the insurer "refused to accept a renewal premium for an ensuing month, this was in effect a cancellation of the policy by refusing to accept" such renewal premium. The court further held that where a policy contains a provision "whereby it may be cancelled by the insurer, and whereby it is optional with the insurer whether it shall accept renewal premiums, the policy may be cancelled by the insurer according to the terms of the policy, and the unearned premium returned to the insured, or when any renewal premium becomes due the insurer may refuse to accept the same and thus cancel the policy." The court further held in such a case where the insurer refused to accept the renewal premium this operated as a cancellation of the policy. Even if the defendant did not properly cancel this policy by the letter of October 2, 1940, in which it notified the plaintiff in effect that it was cancelling the policy at the end of the month of October, at which time there was an unearned premium in its possession, namely, the October 1940 premium, the policy certainly became cancelled, under the above authority, when the company refused to accept the payment of the November premium and returned the check to him. Furthermore, no claim was made by the plaintiff for indemnity between October 2 and November. No claim had been made by the plaintiff for such indemnity before October 2, 1940, with the exception of the claim for the fifty days for which he was paid. In fact, under the plaintiff's own testimony, no claim was ever made with the defendant for such indemnity except by the filing of the present suit in April 1941, and as to this suit the plaintiff testifies that he is not seeking to be paid for his illness. The letters of the plaintiff's attorney to the defendant were complaining about the action of the company in cancelling the policy, and did not intimate that the plaintiff was ill and confined to his home as the result of his illness and attended by a physician, as provided in the policy, and was therefore claiming monthly indemnity.

The facts of this case do not bring it within the decisions cited by the plaintiff in error, namely, Duke v. General Accident c. Assurance Cor., 212 N.C. 682 (194 S.E. 91), Wadev. Mutual Insurance Co., 115 W. Va. 694 (177 S.E. 611), and similar decisions to the effect that a policy providing indemnity for illness which confines the insured continuously within his home does not limit the insured's conduct but merely describes the condition, extent, and degree of the illness, and that such a provision must be reasonably construed and applied, and that there need not be a literal compliance with such provision in order to permit a recovery. The facts of the present case do not bring it within Lewis v. Liberty c. Insurance Co., 185 La. 589 (170 So. 4, 107 A.L.R. 286), and similar cases. The plaintiff's own testimony takes the present case without the principle underlying such authorities.

Under the view which we take of this case it becomes unnecessary to determine whether there was an accord and satisfaction or a complete release of the defendant when the plaintiff accepted the draft for $143.33 and executed the release and settlement proposition on September 10, 1940, by virtue of the principle underlying the cases cited in the brief of the plaintiff in error, namely, Buel v. Kansas City Life Insurance Co., 32 N. M. 34 (250 P. 635, 52 A.L.R. 367); Pan-AmericanLife Insurance Co. v. Bagley, 55 Ga. App. 610 (191 S.E. 144); Matthews v. Gulf LifeInsurance Co., 64 Ga. App. 112, 117 (12 S.E.2d 202), Wadev. Mutual Insurance Co., supra, and similar decisions.

Conceding that there was no release of the defendant by the execution of the settlement agreement and the acceptance of the draft, the testimony of the plaintiff, properly construed, shows affirmatively that he was not continuously ill and confined to his home where he was attended by a physician regularly during the eight months sued for.

The court properly directed a verdict for the defendant, as the evidence demanded a finding that the plaintiff was not continuously ill and confined to his home during the time for which he claims monthly indemnity. The court did not err in overruling the motion for new trial.

Under this view of the case, if there was any error in the overruling of the demurrer to the plea and answer as amended, it was rendered harmless by the testimony of the plaintiff which affirmatively showed that he was not entitled to recover for the monthly indemnity sued for.

Judgment affirmed. Sutton and Felton, JJ., concur.