Bankers Health Life Ins. Co. v. Plumer

No error of law appearing in any of the special grounds of the motion for new trial, and the verdict being supported by the evidence, the judge did not err in overruling the motion. No error otherwise appears in the exceptions to the judge's order.

DECIDED JULY 16, 1942. REHEARING DENIED JULY 28, 1942. Abe Plumer brought suit against Bankers Health Life Insurance Company for the recovery of premiums, with interest and damages. He alleged that the company had breached its contract of insurance with him by refusing to issue to him the free policy as provided for in the contract, and because the company had illegally and fraudulently lapsed and repudiated the contract without the plaintiff's knowledge or consent. The defendant demurred generally to the petition. This demurrer was sustained and the petition dismissed. On exception to that judgment this court held that the petition alleged a cause of action for the recovery of all premiums paid, with interest, on account of the improper lapsing of the policy and repudiation thereof by the defendant, and that the court had erred in sustaining the general demurrer. Plumer v. Bankers Health Life Ins. Co., 62 Ga. App. 352 (8 S.E.2d 97). For a more detailed statement of the allegations of the petition see that decision.

The defendant admitted the issuance of the policy, but denied the other allegations of the petition. For further answer the defendant alleged that on April 29, 1933, the policy which it had issued to the plaintiff on November 15, 1926, being policy No. 235249, lapsed for nonpayment of premiums; that all rights of the plaintiff ceased because of their nonpayment; that since April 29, 1933, no premiums whatever have been paid on policy No. 235249, and all rights of the plaintiff thereunder ceased; that on September 5, 1933, the plaintiff applied to the defendant for another policy; that policy No. 861183 was issued and delivered to and accepted by the plaintiff, and all premiums paid by the plaintiff since September 5, 1933, have been paid on and applied to the latter policy; that policy No. 861183 lapsed for nonpayment of premiums on January 18, 1937, the date of the last premium paid thereon having been November 30, 1936; that the plaintiff has no rights or claim against the defendant under policy No. 861183; that the provision of policy No. 235249 with reference to the free policy, as fully set out in the petition, is a true copy of the provision which appears in that policy, that this provision provides that after premiums on the policy have been fully paid for ten years, on written application the company will issue a free policy in accordance with the tables used by the company; that the premiums on such policy were not paid for a period of ten years and no written application was ever made for the free policy; that if an application had been made in accordance with the provisions of the policy, and if premiums had been paid for a period of ten years, then the free policy to which the plaintiff would have been entitled was the amount of paid-up insurance the then reserve under the policy would have purchased; that if premiums had been paid for ten years under the policy the reserve at the end of the ten-year period would have been $49, which would have purchased a paid-up policy for $91, but that the premiums not having been paid and the policy having lapsed the plaintiff is not entitled to any amount whatever under the policy.

By an amendment the plaintiff alleged that in April, 1933, the defendant's agent in Elberton, Georgia, illegally and fraudulently attempted to lapse the policy for nonpayment of premiums when he continued to collect all premiums due on the policy, and that such agent illegally and fraudulently issued or caused to be issued a policy covering the plaintiff in lieu of the policy, copy of which is attached to the petition, and while continuing in behalf of the defendant to collect the premiums on the original policy such agent illegally and fraudulently for the defendant credited the premiums so collected on the policy which had been illegally and fraudulently issued instead of on the policy which is the subject of this suit; that from the time the policy was issued in 1926 until after it matured in 1936 the plaintiff paid all premiums due thereon and the policy never lapsed, and that the acts of the defendant were illegal and fraudulent and were a fraudulent scheme to deprive the plaintiff of the benefits of his contract; that sometime in November or December, 1936, F. L. Sanders, an agent of the defendant, was notified by the plaintiff that the policy which is the subject of this suit had matured, and requested the agent to obtain for him the necessary blanks on which to make application for the free policy as provided therein; that this agent informed the plaintiff that he would send in the plaintiff's policy books and papers and obtain the free policy for him, whereupon the plaintiff turned over to this agent his policy, receipt books, and all other papers that he had in connection therewith; that he was informed by Sanders that the papers were sent to the company; that the plaintiff continued to pay the premiums on the policy to Sanders, pending the issuance and delivery to him of the free policy; that not receiving the free policy he talked with C. C. Tomlin, another of the defendant's agents in regard thereto, and was assured by this agent that his free policy would be delivered to him; that later Tomlin reported to the plaintiff that his policy lapsed in 1933, and that therefore his policy had not matured, and he was not entitled to the free policy; that on May 26, Tomlin as agent of the defendant wrote the plaintiff that he would be in Elberton in the near future and would come to see him and see "if we can't get this matter straightened out;" that the defendant never delivered to the plaintiff any other policy in lieu of the one, copy of which is attached to the petition, and if any other policy was ever issued by the defendant it was due to the illegal and fraudulent acts of its agent; that as soon as a receipt book was filled up it was also taken up by the defendant's agents, and the plaintiff never had at any time any other than the premium receipt book in actual use at the time; that the plaintiff is an ignorant and illiterate colored person, and while he is able to read to some extent he is unable to understand the meaning of entries made on documents and papers, and any entries made by the defendant's agents on any of the plaintiff's papers in connection with the policy in question, which entries are contrary to the plaintiff's allegations in his petition, were illegally and fraudulently made and designed to deceive and mislead the plaintiff; that the plaintiff continued to make payments on his insurance until January, 1937, and such premium payments were fraudulently omitted from his receipt book by the defendant's agent, but the agent entered the last payment made by the plaintiff in the receipt book as of December 14, 1936; that the number of the policy entered on the receipt book as "B-861183" was illegally and fraudulently entered thereon when in fact the number of the plaintiff's policy was 235249, but because of the plaintiff's illiteracy and ignorance he did not notice this change and did not know that the substitution had been made, and no policy having such number was ever delivered to him or applied for by him, and the plaintiff has never had or paid premiums on any policy other than the one, copy of which is attached to the petition, and that the defendant is bound by the fraudulent acts of its agents, and the plaintiff is entitled to the relief sought in the original petition.

By another amendment, dated August 14, 1940, the plaintiff struck from the original petition the allegation that he had reached the age of fifty-three years, is in declining health and uninsurable, and that the act of the defendant in fraudulently and unlawfully lapsing and cancelling his contract of insurance has injured and damaged him in the sum of $500, and the allegation that the acts of the defendant were fraudulent and in bad faith and he was entitled to reasonable attorney's fees and 25 per cent. damages. The plaintiff in this amendment alleged that the acts of the defendant in failing and refusing to comply with the terms of its contract and deliver to him the "free policy" and in cancelling the plaintiff's first policy and lapsing it, and applying the premiums paid by him to policy No. B-861183, were all in bad faith and fraudulent; that the conduct of the defendant was in bad faith, stubborn and litigious, and has caused the plaintiff unnecessary trouble and expense in having to engage counsel to prepare, file and prosecute this action, and the plaintiff sues for reasonable attorney's fees in terms of the law.

On the trial the plaintiff introduced evidence tending to establish the allegations of his petition as amended. The plaintiff testified as follows: "I got a life-insurance policy from the defendant, the Bankers Health Life Insurance Company, No. 235249, issued November 15th, 1926, at the premium rate of 35 cents. This policy you hand me is the 1926 policy and which I applied for and which they delivered to me. I received it and accepted it, and that is the policy I paid on all the time. I paid 35 cents on that policy to different policy men who were agents of the company. From time to time they shifted their agents. I paid on that old policy from the time I taken it out for nearly eleven straight years. I never let the old policy lapse and I never quit paying on it, and I never got behind in paying the premiums on the old 1926 policy since it was issued. I paid 35 cents each and every week. If I got this policy in November, 1926, and paid on it straight down, it was ten years old in 1936. I never sent any money to pay the premiums on this policy to the district office of defendant at Athens or the home office in Macon. I made all my payments in Elberton to the various agents of the defendant. The agents would come to my house; sometimes the agents would miss, say, this week, and so they would come the next week. I was on the route of the local agents of the company. After November, 1936, after this old policy came ten years old, I paid the agents of the company more money as premiums on the old policy and continued to pay them until about the first of January, 1937. That was when I made the last payment."

The defendant introduced evidence tending to show the lapsing of the plaintiff's original policy for nonpayment of premiums in the year 1933, and showing that it had issued another policy as alleged in its answer. The evidence for the defendant also tended to show that it had credited the premiums paid by the plaintiff until 1936 on the second policy.

The jury returned a verdict in favor of the plaintiff for $183.40 principal, $133.35 interest to date, and $150 counsel fees. The defendant's motion for new trial was overruled and it excepted. In passing on the motion for new trial the judge recited that at one term of court a verdict which had been rendered for the plaintiff was set aside on a motion for new trial, and that the verdict now under review was the second verdict rendered for the plaintiff. He then proceeded to render a judgment overruling the motion for new trial. This order was excepted to on the ground that it showed on its face that the judge "did not exercise any judicial discretion, did not pass on any ground of error assigned in the motion and was made and passed without consideration of the merits of the motion." 1. The order of the judge overruling the motion for new trial was not subject to the exception that it appears on its face that he did not use any judicial discretion and did not pass on any ground of error assigned or that it appears that he did not approve the verdict.

In the first special ground of the motion the defendant complains of the following charge of the court: "The plaintiff in this case, as I have already read to you, claims an additional sum as attorney's fees. He contends that the defendant has acted in bad faith, has been stubbornly litigious, and has caused the plaintiff unnecessary trouble and expense. As law applicable to this contention I charge you Code § 20-1404: `The expenses of litigation are not generally allowed as a part of the damages; but if the defendant has acted in bad faith, or has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.' Therefore, gentlemen, if you find from the evidence in this case that the plaintiff is entitled to recover in this case you may also consider this additional item of attorney's fees, provided the plaintiff has satisfied you by a preponderance of the evidence that the defendant has acted in bad faith, or has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense. You may allow such amount as attorney's fees as you find and believe from the evidence are fair, reasonable, and were necessary. The fair and reasonable value of the expense of litigation is a question for the jury to determine under all the facts and circumstances of the case." It is contended that Code § 20- 1404, which is the section embodied in the above except from the charge, is not applicable, and that the present case is not one in which the recovery of attorney's fees as expenses of litigation is permissible. It is also contended that there is no evidence which would authorize a recovery under the provisions of Code § 20-1404. It is insisted that in the present case if there could be any recovery of attorney's fees, Code § 56-706 rather than the section charged would apply. The bad faith which would authorize a recovery of attorney's fees as expenses of litigation is the fraud or bad faith of the defendant in the transaction out of which the cause of action arose. Twin City Lumber Company v. Daniels, 22 Ga. App. 578 (96 S.E. 437). In an action ex contractu expenses of litigation are recoverable under the above section where it appears that the contract was entered into in bad faith or was procured by fraud, or that the defendant had been stubbornly litigious. McKenzie v. Mitchell, 123 Ga. 72 (51 S.E. 34); Lovell v. Frankum,145 Ga. 106 (4) (88 S.E. 569).

We can not say that there was no evidence from which the jury might find that there was fraud or bad faith on the part of the defendant, through its agents, in the transaction out of which the cause of action arose; and the court did not err in charging Code § 20-1404, for any reason assigned. See Mutual LifeInsurance Co. v. Chambliss, 131 Ga. 60, 62 (61 S.E. 1034). There was evidence from which the jury were authorized to find that the agents of the defendant acted in bad faith and committed a fraud on the plaintiff in lapsing and causing to be cancelled, without the knowledge of the plaintiff, the first policy of insurance, and in continuing thereafter to accept premiums on this policy, knowing that he did not know that such policy had been lapsed and cancelled for nonpayment of premiums. If the evidence and the testimony of the plaintiff represented the truth of the transactions on which this suit is based, the defendant and its agents who dealt with the plaintiff were guilty of fraud beginning with the wrongful lapsing and cancellation of the first policy, without the plaintiff's knowledge, in 1933. The plaintiff's evidence fully justified the charge complained of in this ground of the motion.

The contention of the defendant that Code § 56-706 rather than § 20-1404 applied under the facts of the present case is entirely without merit. Mutual Life Insurance Co. v. Chambliss, supra. The Code, § 56-706, has reference to claims on policies of insurance and not to suits for fraud and for the return of premiums, as is the present case. It was held when this case was in this court on demurrer that the petition showed a cause of action for the recovery of all premiums paid on account of the alleged "fraud" of the defendant and its agents, but that there was no case made for the breach of the contract of insurance relatively to the provisions thereof whereby the company promised, after the insured had paid premiums on the policy for ten years, to issue to him a paid-up "free" policy. Plumer v.Bankers Health Life Insurance Company, supra. The present suit is not for the breach of the policy, but is one for the recovery of premiums, based on fraud and wrongful conduct of the defendant, and it has been adjudicated that a cause of action in this regard was alleged.

2. It follows from what is ruled in the foregoing division of this opinion, to the effect that under the pleadings and evidence the court did not err in charging the provisions of the Code, § 20-1404, which permit the recovery of attorney's fees as expenses of litigation, that the court did not err, as complained in ground 2 of the motion, in admitting evidence to show what were reasonable attorney's fees under the particular facts of this case. Mutual Life Insurance Co. v. Chambliss, supra. The court properly permitted the present counsel for the plaintiff, as well as the former counsel to give their opinions as to what was a reasonable attorney's fee in this case, each witness giving in detail the facts on which he based his opinion.

3. In ground 3 the defendant assigns error on the following charge of the court: "There is no rule of law which requires the jury to accept as true entries in a receipt book in preference to the testimony of a witness. It is a question for the jury to say what weight and credit is to be given all evidence in the case." This excerpt stated a correct and applicable principle of law, and was not error for any of the reasons assigned. See BankersHealth Life Ins. Co. v. Nichols, 44 Ga. App. 536 (162 S.E. 161). The contention that this charge unduly emphasized the plaintiff's contention to the defendant's detriment is without merit. The above excerpt was not inapplicable under the evidence because there was only one receipt book introduced and this book did not cover payments made in 1933 and prior thereto when the defendant claimed the first policy had lapsed. The above excerpt was applicable under the evidence for the reason that the policy number on the receipt book was different from the number of the policy on which the plaintiff claimed that he had paid the premiums to the defendant. The plaintiff contended that he was an illiterate colored man; that he paid the premiums on the first policy; that his understanding was that the defendant accepted such premiums on the first policy; that the defendant wrongfully and fraudulently lapsed the first policy, and substituted another policy without this being known to the plaintiff, which second policy bore the number that was on this receipt book. These contentions were denied by the defendant. There was a conflict on this issue. The court correctly instructed the jury that they were not required to accept as true entries in this receipt book as being payments of premiums on the second policy in preference to the testimony of the plaintiff that he paid the premiums, as he thought, on the first policy. The court properly instructed the jury that the weight and credit to be given all of the evidence was a question for their determination.

4. The court did not err in charging the jury as complained of in the fourth special ground as follows: "If you find that the plaintiff is entitled to recover the measure of recovery would be the amount actually paid by the plaintiff as premiums together with interest thereon from the time of payment to the date figured at the rate of 7 per cent. per annum." The measure of damages under the original petition was the return of all premiums paid, with interest. This court on exception to the sustaining of the general demurrer to the petition, held that a cause of action was alleged "for recovery of all premiums paid, with interest," and reversed the lower court. Plumer v.Bankers Health Life Ins. Co., supra.

5. In ground 5 it is contended that the court erred in charging the jury as follows: "If you believe from the evidence that the plaintiff applied for and accepted a new policy of insurance from the defendant company, and that he knew that premiums paid by him were being applied to the new policy instead of to the old, the plaintiff would not be entitled to recover." This charge stated a correct rule. It was favorable to the defendant and was not error for any of the reasons assigned, among them being that the court did charge another proposition of law.

6. In ground 6 the defendant contends that the court erred in admitting over its objection the following testimony of the plaintiff: "Mr. Mercer [an agent of the defendant] said: `Abe [the plaintiff], we aint going to let you lose money that you put in it; we are going to pay you your money; we aint going to let you lose it. . .' He said, `They are going to come over here and pay you. . . Like I told you at your home, we are going to come over here and pay you your money. You aint going to lose your money.' And then Mr. Sanders [an agent of the defendant] said, `Abe, I am going to give you Mr. Tomlin's [an agent of the defendant] address in Athens, and I am going to tell him when I get back to Athens, and we will come over here and pay you your money. We are not going to let you lose your money.'" The defendant objected to the admission of the evidence because the defendant was not and could not be bound by any promises of payment made by Mercer or Sanders; it not being shown they had any authority to bind the company, nor that the company knew of any such promises. This ground is without merit. The court did not err for the above reasons in admitting the testimony. It does not appear, and it is not contended in this ground, that the above evidence was harmful and prejudicial in any manner to the defendant.

7. Error is assigned in ground 7 to the admission of the following testimony of Joseph M. McGinty, counsel for the plaintiff: "Assuming what Uncle Abe says is true, I have calculated as closely as I can the amount of money he has paid to the company. The principal amount, as I figure, would be $184.80. If in the event he is entitled to recover, as I understand, he would be entitled to recover interest at the rate of 7 per cent. per annum on each amount he has paid to the company from the date of each payment, but to calculate that strictly, you might say according to law, would be a technical task, because we don't have the dates and the amounts of payments, and the highest and best evidence according to the testimony has been destroyed. It would seem from a logical standpoint the best thing to do would be to put it on an annual basis, starting from the year 1927; if the policy was delivered in 1926, in November, 1927, the policy would have been a year old, and that would be 52 weeks in a year. The payment of 35 cents a week for 52 weeks would be $18.20 a year premium that would be paid to the company as principal; the interest on that sum of $18.20 at 7 per cent. is $1.27. From 1927 up until now would be about 15 years, and the interest on $18.20 at 7 per cent. per annum for 15 years would be $19.05. With each year thereafter the amount of interest would come down $1.27. Figuring it on that basis the total interest would be at 7 per cent. per annum, as closely as I can calculate it, $133.35; principal $184.80 and the interest would be $133.35 at 7 per cent. per annum." The admission of this testimony was not error for any of the reasons assigned. By this testimony the plaintiff did not usurp the function of the jury, and such testimony was not calculated to unduly impress the jury and to prejudice the defendant. This testimony was not inadmissible because the witness did not have the dates of payments and the amount of each. This court had previously ruled in this case that the plaintiff, if entitled to recover, could recover the sum of "all premiums paid with interest," and the facts and figures on which the witness based his calculations were in evidence in the case. It is not contended by the defendant that the calculations were erroneous. The plaintiff was entitled to recover all premiums paid, and it is undisputed that the plaintiff paid for the policies, or policy, as the case may be, a weekly premium of 35 cents. The date of the first policy was not disputed. The fact that the plaintiff paid the premiums until January, 1937, was not disputed. The dispute was whether the plaintiff paid the premiums on the first policy or on another policy, as contended by the defendant, which had been issued by it when it cancelled and lapsed the first policy.

8. It is contended in ground 8 that a new trial should be granted because during his examination of the plaintiff the plaintiff's counsel in the presence of the jury stated to the court: "I would like in the presence of the jury to let the plaintiff sit down and write his name;" that the defendant objected, and on the objection being sustained the plaintiff's counsel asked if he might be permitted to state to the court what he had in mind; that being so permitted the plaintiff's counsel said: "I would like to get permission in the presence of the jury for the plaintiff to write his name in order that the jury . ."; that here the defendant again objected to such statement before the jury, but before the court ruled thereon the plaintiff's counsel continued ". . could compare it and the alleged signature on the application, I could have my client claim the paper a forgery," and then counsel for the plaintiff proceeded to argue it; that the defendant renewed its objection, when, without reprimand of counsel for making an improper statement and without cautioning the jury not to be influenced by it, the court remarked, "I have ruled on it." The defendant contends that merely ruling on the objection and sustaining it were insufficient to cure the evil, and that the court, without a request, should have cautioned the jury not to be influenced by it, and should also have reprimanded counsel for making the proposition before the jury. The defendant did not move for a mistrial and there was no request that the court caution and instruct the jury relatively to this matter. The defendant did not request the court to reprimand the plaintiff's counsel for making such statement. The foregoing was not error for any of the reasons assigned.

9. The evidence authorized the verdict for the plaintiff, and the finding of all premiums paid, with interest, was not contrary to law. See Plumer v. Bankers Health Life Insurance Co., supra, where it was held that a cause of action for the recovery of such premiums was alleged. The evidence tended to support the allegations of the petition, and the verdict was not without evidence to support it and contrary to law, as contended by the defendant.

While all the evidence has not been referred to or quoted, a sufficiency thereof has been referred to or quoted in the opinion for the purpose of illustrating the conclusion at which this court has arrived. There having been no plea of the statute of limitations filed by the defendant, no question as to whether the claim is barred by the statute of limitations is presented. The court did not err in overruling the motion for new trial.

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