Allstate Insurance v. Stephens

Undercofler, Presiding Justice.

This case involves a provision in a "standard form” fire insurance policy which states, "No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss.” The question is whether the action here is barred by this limitation. The fire occurred on December 1, 1974. The last day to file suit on the policy under Georgia law was Sunday, November 30,1975. Suit was filed on Monday, December 1, 1975.

The trial court held the suit was not barred by the contractual limitation. The Court of Appeals affirmed upon the authority of this court’s opinion in Brooks v. Hicks, 230 Ga. 500 (197 SE2d 711) (1973).

We reverse. Brooks v. Hicks by analogy applied the statutory rule of Code Ann. § 102-102 (8) to contracts. Code Ann. § 102-102 (8), among other things, provides, "When a number of days is prescribed for the exercise of any privilege, or the discharge of any duty, only the first or last day shall be counted; and if the last day shall fall on Saturday or Sunday, the party having such privilege or duty shall have through the following Monday to exercise such privilege or to discharge such duty.” What Brooks v. Hicks did not make clear was that Code Ann. § 102-102 (8) applies only to limitations in terms of days. It does not apply where the limitation is in terms of months or years. Thomas v. Couch, 171 Ga. 602, 607 (156 SE 206) (1930); Brown v. Emerson Brick Co., 15 Ga. App. 332 (83 SE 160) (1914); Davis v. U. S. Fidelity &c. Co., 119 Ga. App. 374, 376 (167 SE2d 214) (1969); Gray v. Quality Finance Co., 130 Ga. App. 762 (204 SE2d 483) (1974). Brooks v. Hicks’ analogy to Code Ann. § 102-102 (8) can only apply to the extent that statute applies. And Code Ann. § 102-102 (8) under this court’s decisions does not apply to limitations expressed in terms of months or years. Certainly Brooks v. Hicks did not overrule sub silentio cases of this court so holding. The absence of this distinction in Brooks v. Hicks apparently misled the Court of Appeals.

We reaffirm Brooks v. Hicks as holding that by analogy Code Ann. § 102-102 (8) applies to contracts as well as statutes where the limitation is in terms of days. As stated therein, "It is true Code Ann. § 102-102 (8) is a rule of statutory construction, and does not. . . apply to contractual limitations; yet, this Code Section states a rule of reason with respect to limitations, be they statutory or contractual, which should be applied to limitations in contracts...” Justice Hawes, in concurring specially, stated, "[This establishes] a uniform rule of law that gives the same construction to contractual limitation as now given to statutory limitations..We caution that Brooks v. Hicks apparently assumed that the option contract there in dispute was expressed in days rather than months or years but did not address that question. Consequently, Brooks v. Hicks is not to be considered an authoritative construction of the terms of that option contract.

Argued June 13, 1977 Decided September 7, 1977 Rehearing denied September 28, 1977. Long, Weinberg, Ansley & Wheeler, J. Kenneth Moorman, for appellant.

Brooks declined to follow Rowell v. H. L. Harrell Realty Co., 25 Ga. App. 585 (103 SE 717) (1920) and Maxwell Bros. v. Liverpool & London &c. Ins. Co., 12 Ga. App. 127 (76 SE 1036) (1912), only insofar as they stated Code § 102-108 (8) (formerly subsection 8 of section 4 of the Civil Code of 1910) did not apply to contractual limitations.

In the instant case the contractual limitation is in months. Brooks v. Hicks does not apply. On the contrary we follow Phillips v. Fireman’s Fund Ins. Co., 31 Ga. App. 541 (121 SE 255) (1923), involving facts identical to the case here. Accordingly the Court of Appeals must be reversed.

We note with interest Chief Justice Simmons’ statement in Rusk v. Hill, 117 Ga. 722, 728 (45 SE 42) (1903), "We are aware that this court has in other cases, involving the computation of months and years, taken a different view [than those in days]... Why the distinction or difference should have been made I am unable to say.”

Judgment reversed.

All the Justices concur, except Hill, J., who concurs in the judgment only, and Nichols, C. J., and Jordan, J., who dissent. Kirby G. Bailey, for appellee.