Life Casualty Insurance Co. v. McLeod

1. The contract of insurance in the present case providing that if the insured died while enrolled in the military or naval service of the United States in time of actual war, without obtaining a written permit from and paying an extra premium to the company, the company's liability would be restricted to the net reserve on the policy, and the evidence showing that the insured died while enrolled in the United States Navy without having obtained the permit from or paid the extra premium to the company as required by the policy, the company's liability was restricted to the net reserve of the policy. The court erred in entering judgment in favor of the plaintiff and against the defendant for any amount greater than $50, the net reserve on the policy, which the defendant offered to pay and tendered before the suit was filed. The fact that the insured was granted a furlough or leave of absence did not remove his name from the roll of the navy, but merely permitted him, while still in the naval service, to absent himself for a certain time from his station. He was still enrolled in the naval service at the time of his death, although at home at that time on a furlough.

2. The accidental-death benefit provision of the policy providing that the accidental-death benefit would be paid if the death of the insured occurred while the insured was in military or naval service in time of was and it appearing that at the time of his death the insured was a member of the United States Navy in time of war, the judge erred in entering judgment for the plaintiff against the defendant on the accidental death benefit provision of the policy.

3. Under the facts of this case, the judgment for attorney's fees was unauthorized.

DECIDED NOVEMBER 20, 1943. The plaintiff brought suit against the defendant for $500, an for damages and attorney's fees, on a policy of life insurance, a copy of the policy being attached to the petition. The policy provided for the payment of $250 upon the death of the insured, subject to certain conditions and restrictions; and under an accidental-death benefit provision it was provided that if the death of the insured resulted solely through external, violent, and accidental means an amount equal to the face amount of insurance then payable at the death of the insured would also be paid, this provision also being subject to certain restrictions specified therein.

The policy contained the following pertinent provisions: "Military and Naval Service — The insured may serve in the navy or army of the United States or in the National Guard in time of peace or for the purpose of maintaining order in case of riot; in time of actual war, however, a written permit must be obtained from the company for such service and an extra premium paid. Should the insured die while enrolled in such service in war time without such permit, the company's liability will be restricted to the net reserve of this policy," and the following under "Accidental Death Benefit — No accidental death benefit will be paid if the death of the insured is the result of self-destruction, whether sane or insane, nor if death is caused or contributed to, directly or indirectly, or wholly or partially by disease, or by bodily or mental infirmity, nor if death results from bodily injuries sustained while participating in aviation or aeronautics as a passenger or otherwise, or while the insured is in military or naval service in time of war."

The defendant filed its answer, and alleged that under the provisions of the policy and the facts, it was only liable to the plaintiff for $50, the net reserve of the policy, which amount had been tendered to the plaintiff before the filing of the suit.

The case was tried before the judge without the intervention of a jury, upon the following agreed statement of facts: "On April 2, 1934, the defendant issued to James L. McLeod, who was the son of the plaintiff, a policy of life insurance in which plaintiff was named as beneficiary. A true and correct copy of this policy of insurance is attached to plaintiff's petition. Thereafter, on or about December 4, 1942, the insured James L. McLeod, had a personal rencounter with Fred Terrell, through no fault of the said James L. McLeod, and during which he was fatally stabbed, cut and lacerated by a knife in the hands of the said Fred Terrell, from which injuries he thereafter died on the 5th day of December, 1942.

"Thereafter, and within the time provided by the policy, the plaintiff furnished to the defendant proper proofs of death, as provided in said policy of insurance, and thereupon made demand upon defendant for payment of same, but it is understood by this stipulation that the defendant does not admit liability to the plaintiff by reason of the furnishing of said proofs of death to the defendant.

"It is admitted that said policy of insurance contains, among other provisions, the following provisions under the classification of ``Accidental Death Benefit,' to wit: ``No accidental death benefit will be paid if the death of the insured is the result of self-destruction, whether sane or insane, nor if death is caused or contributed to, directly or indirectly, or wholly or partially by disease, or by bodily or mental infirmity, nor if death results from bodily injuries sustained while participating in aviation or aeronautics as a passenger or otherwise, or while the insured is in military or naval service in time of war.'

"At the time of the death of the insured, James L. McLeod, he was in the naval service of the United States in time of war — that is to say — during the present World War, or what is known as World War II, of which the United States of America is a participant or belligerent. However, at the time of the death of the said James L. McLeod, he was not on active duty in the naval service of the United States, but was visiting his parents near Valdosta, Georgia, while on leave or furlough from the United States Navy. The personal rencounter which ended in his death did not grow out of or happen in connection with any duties then being performed by him in the United States Navy.

"It is further admitted that the policy contains, among other provisions, the following pertinent provisions under the subject of ``Military and Naval Service', to wit: ``The insured may serve in the navy or army of the United States or in the National Guard in time of peace or for the purpose of maintaining order in case of riot; in time of actual war, however, a written permit must be obtained from the company for such service and an extra premium paid. Should the insured die while enrolled in such service in war time without such permit, the company's liability will be restricted to the net reserve on this policy.'

"After the issuance of said policy, the insured, James L. McLeod, entered the naval service of the United States Navy, while the United States of America was in actual state of war with Germany and other Axis powers, without obtaining from defendant a written permit for such service and without paying to defendant any extra premium for the risk increased by his entering such service, and that the said insured, James L. McLeod, remained in such service during said state of war until his death without ever having obtained such permit and without ever having paid such extra premium. The insured, James L. McLeod, died while enrolled in said service during actual war, as aforesaid, and without ever having obtained such permit and without ever having paid such extra premium, as aforesaid.

"However, as already stated, he was not in the active performance of duties as a member of the naval service at the time of his death, or at the time of his personal rencounter with the said Fred Terrell, which resulted in his death, but was on leave visiting his parents near Valdosta, Georgia.

"The net reserve on the policy sued on is less than $50. However, it is the policy of the defendant to pay either the net reserve or one-fifth of the face amount of the policy (exclusive of accidental death benefit) whichever is the larger. In this case the defendant has offered and now offers to pay $50 to plaintiff by reason of the death of the insured under the circumstances herein before set forth.

"Prior to the filing of this suit, the defendant, on March 16, 1943, offered to pay to the plaintiff, the beneficiary of said policy, the sum of $50 in settlement of all claims of the plaintiff, the beneficiary of said policy, under the provisions of said policy; but the plaintiff beneficiary refused to accept said sum and made known to the defendant that he would not accept any such sum, thereby, relieving the defendant of making a legal tender of such sum.

"It is further agreed that, after James L. McLeod, the insured, entered the naval service of the United States Navy, while the United States of America was in an actual state of war with Germany and other Axis powers, as above stated, the local agents of the defendant company, to wit, Frank Wisenbaker and L. M. Copeland, collected from the insured and remitted to the home office the premiums on the insurance policy, which were the same premiums provided for in the original policy, and not increased or extra premiums caused or brought about by the insured's service in the United States Navy during the present war. In other words, the premiums paid were not increased or extra premiums for the risk increased by the insured entering such service.

"The fact that the insured had entered the naval service of the United States while at war, as aforesaid, was not communicated to the home office of the defendant company or to any of the officers of the defendant company, and neither the home office nor any of the officers of the defendant company knew anything about the insured's service in the naval service of the United States during the present war until after the insured's death, when proofs of claim were furnished to the defendant company.

"These local agents at the time they collected the premiums aforesaid knew that the insured had entered the naval service of the United States Navy while the United States was in a state of war with the Axis powers, as above stated, and they knew such fact at the time the premiums were collected by them and were remitted to the home office of the defendant company.

"These local agents were authorized only to collect insurance for the defendant company, and to take applications for insurance in such company, and to collect the premiums on outstanding policies in the Valdosta territory, and to remit the same to the defendant company.

"In this connection, it is admitted that the policy contains, among other provisions, the following pertinent provisions under the subjects of ``Alterations and Waivers' and ``Payment of Premiums,' and in the concluding clause of the policy sued on, to wit: Agents (which terms includes district managers and superintendents) are not authorized to make, alter or discharge contracts or waive forfeitures, or any provisions or terms of this policy. . . No agent or representative shall have the power to waive or modify this or any other condition or provision of this policy, and knowledge of the agent shall not be taken to be knowledge of the company. This policy is subject to the terms and conditions on this and the reverse side hereof. If these terms and conditions are not in all respects observed, this policy shall thereupon become void and all rights thereunder forfeited; and whenever, for any cause, this policy shall terminate or become void, all premiums previously paid shall be forfeited to the company unless otherwise provided herein.

"It is understood and agreed that in any event the plaintiff is entitled to recover from the defendant the sum of $50, not including any costs."

Judgment was rendered for the plaintiff against the defendant for $250 as death benefits under the policy; for $250 under the accidental-death benefit provision; for $75 attorney's fees; and for costs. The exception here is to that judgment. Under the provisions of the policy in the present case, the insured was allowed to serve in the army or navy of the United States; but in time of actual war, it was required that a written permit be obtained for such service and an extra premium paid; and in case of the death of the insured while enrolled in such service in time of war without having secured the written permission of the company, the company's liability was restricted to the net reserve on the policy. In the case of Mattox v. New EnglandMutual Life Insurance Co., 25 Ga. App. 311 (103 S.E. 180), where the policy contained a provision that, "I further agree that said policy shall be void if within five years from its date I shall engage in military service in time of war without the written consent of the company previously obtained," it was held that the burden was upon the insured to notify the company of his military service and obtain the permit; and that where he died while in the military service without having obtained the permit required by the policy, the company was not liable on the policy even though it had retained the premium notes given by the insured for the policy. In the case of Railey v. United Life Accidental Insurance Co., 26 Ga. App. 269 (106 S.E. 203), was held: "The provisions of a life-insurance policy exempting the insurer from liability for death occasioned by the insured engaging in military or naval service in time of war unless a written permit shall be issued by the company are not void as against public policy; and this is so even where the insured is drafted into the service. . . Nor was the retention by the company of an unearned portion of the first premium, with knowledge of the fact that the insured was engaged in the military service of his government in time of war, sufficient to constitute such a waiver." In the case of Johnson v. MutualLife Insurance Co., 154 Ga. 653, 656 (115 S.E. 14), the Supreme Court, in discussing the validity and construction of "war clauses" in policies of life insurance, said: "Provisions in policies of life insurance, that the insurer does not assume risk of death which shall occur while the insured is engaged in military service, or will not be liable for such death, have been held to exempt the insurer from liability, notwithstanding the fact that death did not result from any hazard peculiar to such service. Coxe v. Employers' Liability Assur. Cor., 2 K. B. 629; Ruddock v. Detroit L. Ins. Co., 209 Mich. 638 (177 N.W. 242); Olson v. Grand Lodge (N. D.) 184 N.W. 7, 15 A.L.R. 1270; Huntington v. F. R. A., 173 Wis. 582 (181 N.W. 819); La Rue v. Insurance Co., 68 Kan. 539 (75 P. 494); Miller v. Ill. Bankers' Life Asso.,138 Ark. 442 (212 S.W. 310, 7 A.L.R. 378); Field v. Western L. Indemnity Co. (Tex.Civ.App.), 227 S.W. 530; Nowlan v. Guardian L. Ins. Co., 88 W. Va. 563 (107 S.E. 177); Slaughter v. Protective League L. Ins. Co., 205 Mo. App. 352 (223 S.W. 819); Malone v. State L. Ins. Co., 202 Mo. App. 499 (213 S.W. 877); Reid v. Am. Nat. Assur. Co., 204 Mo. App. 643 (218 S.W. 957). In such cases the status of the insured, and not the cause of death, is the ground upon which the exemption of the insurer from liability stands; and these and like authorities hold that such exemption exists whether death occurs from natural causes wholly disconnected from the hazards of war, or from such hazards. Under such provisions, when the insured is engaged in military service, whether voluntary or involuntary, and he dies in such service, from any cause, these authorities hold that there can not be any recovery."

The language used in the policies in the Georgia cases just above referred to, with reference to restricting liability on account of military service by the insured, is different from that used in the policy in the present case, but what is said by the courts in the decisions in those cases shed light on the questions here involved. It will be seen from an examination of the annotation of authorities on war clauses in insurance policies appearing in 137 A.L.R. 1263 et seq., that it depends on the wording of the policy in each case whether the mere status of the insured as a member of the military or naval service would be sufficient to make operative the provisions in a policy limiting the liability of the insurance company, or whether the causation between the insured's service in the army or navy and his subsequent death would have to be established.

Under the express terms of the policy in the present case, the status of the insured at the time of his death was made the ground of restricting the liability of the company. If the insured was enrolled in either military or naval service at the time of his death without having obtained the written permission of the company for such service, the liability of the company was to be restricted to the net reserve on the policy. "While we recognize the rule that a policy of insurance must be construed most strongly against the insurer, still the words of the policy must be given the meaning which they ordinarily bear; and where it is manifest that it was the intention of the insurer that liability should attach only in given circumstances, the law will uphold the contract according to its true intent and import."Wheeler v. Fidelity Casualty Co., 129 Ga. 237, 240 (58 S.E. 709). "Where the language [of the insurance contract] is unambiguous and but one reasonable construction of the contract is possible, the court must expound it as made." Cato v. AEtnaLife Ins. Co., 164 Ga. 392, 398 (138 S.E. 787). In the case of Reese v. Fidelity Mutual Life Association, 111 Ga. 482,485 (36 S.E. 637), it was held: "The contract as expressed in the application and the policy established the respective rights and obligations of the parties, and this court has no power to alter its provisions and to declare a liability under a state of facts which the parties never agreed should fix it." In the present case, the language used in the policy is plain and unambiguous, and provided that: "Should the insured die while enrolled in such [military or naval] service in war time without such permit, the company's liability will be restricted to the net reserve on this policy;" and under the facts of this case it is admitted that "the insured . . died while enrolled in said service during actual war . . without ever having obtained such permit." It is contended by the defendant in error that because the insured was at home on leave or furlough the provisions of the policy with respect to military and naval service do not apply. This contention can not be sustained, because the insured was still enrolled in the naval service at the time of his death. The fact that he was granted a furlough or leave of absence did not remove his name from the roll of the navy, but merely permitted him, while still in the naval service, to absent himself for a certain time from his station. The fact that he came to visit his parents near Valdosta, Georgia, did not change his status as a sailor of the United States Navy. He was in Georgia with the permission and consent of the naval authorities under a leave of absence granted him for a certain limited time; but his status as a sailor was not changed. He was still subject to the jurisdiction of the naval authorities, and was entitled to all of the benefits of the soldiers and sailors civil relief acts. At the time of his death, he was still enrolled in the naval service in war time, although he was temporarily at home on a furlough. While he may not have been subject to the hazards of naval service while on leave, his status as a sailor remained unchanged; and under the express provisions of the policy, his status is made the ground for the restriction of liability of the company, and not the risks or hazard of the insured at the time of his death.

The fact that the local agents of the defendant collected the premiums provided for in the insurance policy, with the knowledge that the insured had entered the naval service of the United States in time of war, and had transmitted the premiums to the defendant company without notifying the home office of the defendant, or any officer or agent thereof, of his entry into the naval service of the United States in time of actual war, until after the death of the insured, did not amount to a waiver of the provision in the policy limiting the liability of the defendant to the net reserve of the policy under the conditions as stipulated in the policy. Sovereign Camp Woodmen of the World v. Ricks, 26 Ga. App. 374 (106 S.E. 185); Sovereign CampWoodmen of the World v. Griffin, 30 Ga. App. 217 (117 S.E. 261). See in this connection, New York Life Insurance Co. v.Patten, 151 Ga. 185 (106 S.E. 183); Lippman v. AEtnaInsurance Co., 108 Ga. 391 (33 S.E. 897, 75 Am. St. R. 62).

As above stated, it is provided in the policy: "No accidental death benefit will be paid if the death of the insured is the result of self-destruction, whether sane or insane, nor if death is caused or contributed to, directly or indirectly, or wholly or partially by disease, or by bodily or mental infirmity, nor if death results from bodily injuries sustained while participating in aviation or aeronautics as a passenger or otherwise, or while the insured is in military or naval service in time of war." It was admitted that at the time of the death of the insured he was in the naval service of the United States in time of war. In these circumstances the defendant was not liable under the accidental-death benefit feature of the policy.

It was admitted that at the time of the death of the insured the amount of the net reserve of the policy was $50. Under the provisions of the policy, and the agreed statement of facts, the plaintiff was entitled to recover only the net reserve of the policy, without costs, as that amount had been tendered to the plaintiff before the suit was filed.

Under the facts of this case, it appears that the defendant, prior to the commencement of the action, offered to pay the plaintiff the full amount to which the plaintiff was entitled under the provisions of the policy, and that the plaintiff refused to accept said sum. There was no evidence of bad faith on the part of the company, nor a refusal to pay the amount due under the provisions of the policy, and the judgment in favor of the plaintiff against the defendant for attorney's fees was unauthorized. Code, § 56-706.

Therefore the judgment is affirmed, with direction that the judgment be written down to the sum of $50, the amount of the net reserve on the policy. The costs are taxed against the defendant in error.

Judgment affirmed, with direction. Stephens, P. J., andFelton, J., concur.