Harmon v. State Mutual Insurance Co.

Where a life-insurance policy provides for double indemnity in case of death by accident, for which an additional premium is charged, but further provides that the double-indemnity feature shall cease to be in force if the insured enters the military service, unless waived in writing by certain designated officers, and where the insured enters the military service and subsequently pays the premium, including the additional premium for double indemnity, which is accepted and retained by the company, when "some officer or agent having authority to issue policies or to enter the ``waiver' had actual knowledge" of the insured entering the military service, this would amount to an implied waiver, and the right to recover would not be dependent upon a written waiver by the designated officers of the company.

No. 15759. APRIL 17, 1947. REHEARING DENIED MAY 16, 1947. The instant case comes to this court by writ of certiorari from the Court of Appeals. 74 Ga. App. 633 (40 S.E.2d 755).

On June 6, 1940, the insurance company issued to Harmon a life-insurance policy for $2500, and attached thereto was a supplemental agreement for double indemnity in case of accidental death, with the provision that the supplemental agreement "shall cease to be in force," if the insured was enrolled in the military or naval service in time of war. The original policy provided: "No person, except the President, a Vice-President, the Secretary, or an Assistant Secretary, had power to change, modify or waive the provisions of this contract, and then only in writing. The company shall not be bound by any promise or representation heretofore or hereafter made by or to any agent or person other than a above. No agent of the company is authorized to waive forfeiture or to make, alter or discharge contracts, or to extend the time for payment of premiums."

The insured entered the military service May 11, 1943, the semi annual premium on the policy was paid July 6, 1943, which included the premium on the supplemental agreement for double indemnity, and was so divided and shown on the company records. The insured was accidentally killed while in the performance of a military duty at Fort McPherson September 27, 1943. The company paid the $2500 covered by the original policy but refused to pay the $2500 double indemnity covered by the supplemental agreement. It was not insisted that there had been an express waiver in writing of the terms of the supplemental agreement as to the insured being in the military service; but evidence was produced tending to show that at the time the company accepted the premium on July 6, 1943, certain officers of the company had actual knowledge that the insured was at that time in the military service, and it was insisted that, by accepting the premium, which included the additional cost of the double-indemnity feature in case of death by accident, the company had waived any forfeiture occasioned by the insured being in the military service.

The jury found for the insured. The company filed a motion for new trial, and to the overruling of this motion the case went to the Court of Appeals and was reversed, upon the grounds that under the terms of the policy only a written waiver, by the President, a Vice-President, the Secretary, or an Assistant Secretary as to military service, was effective.

The assignment of error in the application for certiorari was predicated upon the above-stated ruling, it being insisted that the forfeiture could be waived otherwise than in writing where the officers of the company, with knowledge of the facts on which the forfeiture is claimed, collected and retained the premium. The question here presented for determination is whether an act of the insured which forfeits the terms of an insurance policy, is waived by the company collecting and retaining the premium, when an officer or agent of the company, having authority to issue policies or to enter the waiver, has actual knowledge of the act of the insured which created the forfeiture.

We are not here confronted with the question of an express waiver, which would have to be in writing and issued by one of the officers of the company designated in the policy; nor does the present question involve the right of an agent of the company to waive a forfeiture of the policy. An implied waiver, when properly established, is just as effective as an express waiver.

The instant case is controlled by the rulings in Golden v. NationalLife c. Ins. Co., 189 Ga. 79 (1, 3) (5 S.E.2d 198, 125 A.L.R. 838), which in effect holds that, where a life-insurance policy is issued and provides that it is void if the company already has a policy in force on the life of such person unless the second policy should have endorsed thereon a waiver to the contrary, and where in his application for the second policy he states that he has no insurance in the company when in fact he does have a life policy therein, and no waiver to the contrary is endorsed upon the second policy, yet where some officer or agent having authority to issue policies or to enter the "waiver" had actual knowledge of the existence of the first policy at or before the payment and retention of the premiums on the second policy, this will not defeat a collection of the second policy at the insured's death.

Applying the foregoing ruling to the instant case, where the double-indemnity feature of the policy became inoperative upon the insured entering the military service, but where "some officer or agent having authority to issue policies or to enter the ``waiver' had actual knowledge" of the insured entering the military service at the time the company received and retained the premium, this would amount to an implied waiver of the provision as to military service, and the company would be estopped to assert this defense.

Accordingly, the Court of Appeals erred in ruling that the plaintiff's right to recover under the policy depended solely upon a written waiver as to military service.

Judgment reversed. All the Justices concur.