Life Casualty Insurance Co. v. Williams

The evidence demanded a verdict for the defendant, and the court erred in overruling its motion for new trial.

DECIDED FEBRUARY 8, 1946. Sammie B. Williams sued Life and Casualty Insurance Company of Tennessee on a policy of industrial life insurance, written on the life of his wife, in which he was the beneficiary. Under the terms of the policy the insured paid premiums of 18 cents per week, and the beneficiary was entitled to death benefits of $250. The policy contained the following provisions: "Limitation of Insurance — Within two years from date of issuance of this policy, the liability of the company under same shall be limited, under the following conditions, to the return of premiums paid thereon: (1) If the insured was not in sound health upon the date of issuance and delivery of this policy, or if the insured before its date had tuberculosis, or diabetes, or cancer, or chronic bronchitis, or disease of the heart or blood vessels, or disease of kidneys, or cirrhosis of the liver, . . Alterations, Waiversand Premiums — This policy shall constitute the entire contract. Any erasure or alteration made herein except by endorsement signed by the president or secretary, actuary, or other officer of the company, shall be void. Agents (which includes managers and superintendents) are not authorized to make, alter, or discharge contracts or waive forfeitures, or any provisions or terms of this polity."

The company defended on the ground that the insured was not in sound health upon the date of issuance and delivery of the policy, alleging that she had tuberculosis, or some other serious disease rendering her of unsound health within the meaning of the policy, before its date and at the time of its delivery. The company contended that for these reasons its liability under the terms of the policy was limited to a return of premiums paid, and that these had been tendered to the plaintiff before the suit was filed, and paid into court upon the filing of the answer.

The policy was dated February 24, 1941, and the insured died on August 3, 1942. The cause of death, as shown by the proof of death signed by the plaintiff, was tuberculosis. The testimony of a physician, who began treating the insured, in her last illness, on February 7, 1941, showed that she had consumption or pulmonary tuberculosis at that time, and that she died from that disease. Claims filed with another insurance company for disability benefits, from February 20 through May 22, 1941, showed that the cause of the insured's disability was pulmonary hemorrhage. The plaintiff testified that the agent of the company had been coming to his house for approximately three years prior to February, 1941, to collect premiums on two policies which the plaintiff had with the company on the lives of his children, and that the agent knew the condition which his wife was in; that, when the agent solicited the insurance on the wife, the plaintiff told him the doctor had said she had tuberculosis, and he replied, "She doesn't look like a woman to me that had TB, I don't think there is anything wrong with her, I don't see why the company wouldn't pass her up." There seems to have been no issue as to the physical condition of the insured at the time when the policy was written. Counsel for the defendant in error concede in their brief that "the insured was not in sound health at the time the application was taken by defendant's agent." It seems also without dispute that the agent of the company knew of the condition of the insured before and when the policy was written.

The case was submitted to the presiding judge for trial without the intervention of a jury. After the introduction of evidence by both sides and the argument of counsel, the judge found in favor of the plaintiff for the full amount of the policy as sued for, and entered judgment accordingly. The defendant filed its motion for new trial on the usual general grounds, and excepts to the overruling of that motion. This case was certified by this court to the Supreme Court. The question propounded was whether the insurer was estopped from asserting non-liability, except for a return of premiums paid, under the limitation-of-insurance clause and non-waiver provisions contained in an industrial life insurance policy, as set out in the foregoing statement of facts. The Supreme Court answered the question in the negative, holding that the insurer is not estopped from asserting its non-liability, except for a return of premiums paid, under the conditions set forth in the question. See Life Casualty Insurance Co. v.Williams, 200 Ga. 273 (36 S.E.2d 753).

As shown in the preceding statement of the case, the policy provided that within two years from the date of issuance, the liability of the company was limited to a return of premiums paid, "if the insured was not in sound health upon the date of issuance and delivery of this policy, or if the insured before its date had tuberculosis," etc. The policy was dated February 24, 1941, and the insured died within two years, on August 3, 1942. The uncontradicted evidence showed that the cause of death was tuberculosis, and that the insured had consumption or pulmonary tuberculosis, the disease from which she died, prior to the date of the policy. Although it appeared from the evidence that the agent of the company had full knowledge that the insured was not in sound health when the policy was written and delivered, and that she had tuberculosis at that time, the insurance company may assert its non-liability, beyond the return of premiums paid, under the provisions of the policy that "agents are not authorized to make, alter, or discharge contracts or waive forfeitures, or any provisions or terms of this policy." Therefore the evidence demanded a verdict for the company, the verdict for the plaintiff was not authorized, and the court erred in overruling the defendant's motion for new trial.

Judgment reversed. Sutton, P. J., and Felton, J., concur.