Progressive Life Insurance v. Bohannon

1. A stipulation in a life-insurance policy to the effect that the policy can not be assigned without the written consent of the insurance company does not apply to an assignment of the policy after the death of the insured.

2. Ground 3 of the demurrer is without merit.

3. A soliciting agent of an insurance company who negotiates the contract is a general agent of the company as to that particular contract and is the alter ego of the company as effectively as any officer thereof.

4. The question as to whether the policy in the instant case was delivered was one of fact to be determined by the jury.

5. A refusal by a life-insurance company of liability on a policy, based on lack of proof of death, when the life-insurance company refuses to furnish blanks upon which proof of death is to be made, relieves the insurer of complying with that provision of the policy regarding proof of death.

DECIDED OCTOBER 29, 1946. REHEARING DENIED DECEMBER 11, 1946. Mrs. Nina Bohannon brought suit on an insurance policy against Progressive Life Insurance Company. Demurrers, both general and special, were filed and overruled. On this judgment the defendant assigns error.

The petition, omitting the formal parts, reads: "1. That the defendant herein, the Progressive Life Insurance Company, is an insurance company having agencies, has an agent, an office and a place of business in Laurens County, Georgia, and had an agent and place of doing business in said State and county at the time the insurance contract hereinafter referred to was made out. 2. That the said defendant is indebted to your petitioner in the sum of $2,018.27, with interest thereon from July 1, 1945, at the rate of seven percent per annum, as will more fully appear from the facts herein set forth. 3. That the said defendant, on the first day of March, 1945, issued its policy of life insurance on the life of James F. Bohannon in decreasing amounts as shown by said policy, with the First Federal Savings and Loan Association, of Dublin, Georgia, a creditor of the said insured, as beneficiary. 4. A true and correct copy of the policy of insurance issued by the defendant is hereto attached and made a part of this petition. 5. Thereafter, on the 30th day of March, 1945, by proper endorsement of the defendant, the effective date of the policy was changed from March 1, 1945, to April 1, 1945. 6. On or about the 9th day of June, 1945, the defendant, through its duly authorized agent, the First Federal Savings and Loan Association, Dublin, Georgia, collected from said insured the sum of $5.37 in full payment of the premiums due on said policy for the months of April, May, and June, 1945, and delivered said policy of insurance to said insured, or retained the same in its possession for the use and benefit of the insured. 7. The said agent kept and retained said premiums and now keeps and retains them, for the use and benefit of said defendant. 8. At the time of the payment of said premiums, the said insured was alive and in good health. 9. The insured was not requested to furnish evidence of insurability, other than that already furnished, until July 3, 1945. 10. On or about the 19th day of June, 1945, the said James F. Bohannon was suddenly stricken with a heart attack and died in a few minutes and before medical aid could be had. 11. Your petitioner shows that there was no default in the payment of the premiums on said policy until said policy was put in effect by the payment of the first premium, and also shows that said policy could not be reinstated until it had once become effective by the payment of the first premium. 12. Petitioner further shows that the defendant waited an unreasonable length of time to insist that the insured furnish evidence of insurability, which petitioner insists was not required under the circumstances herein recited, to wit, from June 9, 1945, until July 3, 1945, at which latter time the insured was dead, and is now estopped to insist upon any part of its insurance contract relating to evidence of insurability. 13. Petitioner also shows that the defendant is further estopped to contend that said insured must furnish evidence of insurability, which petitioner denies to be necessary, by reason of the following facts. 14. That the said defendant prepared and executed said policy of insurance in its Atlanta, Georgia, offices, and mailed the same to its said Dublin agent for delivery, actual or constructive, to the insured, upon his paying the first premium while alive and in good health. 15. At no time after March 30, 1945, did the said defendant request its said agent to return the policy to the Atlanta office, or not to deliver said policy to the insured while he was alive and in good health, or to receive the payment of the first and additional premiums. 16. The defendant, well knowing that the premiums due on the 1st days of April, May, and June, 1945, had not been paid, still permitted said agent to retain said policy to become effective upon payment of the first and additional premiums by the insured while alive and in good health. 17. By reason of its said conduct, the said defendant is estopped to deny the authority of its said agent to receive said premiums and thereby put said policy of insurance in effect, and is further estopped to contend that the said insured must furnish evidence of insurability satisfactory to the defendant. 18. Petitioner shows that the defendant has waived the requirements of said policy relating to the furnishing of proofs of death, by refusing to furnish the same and by refusing to pay the proceeds of said policy and by denying liability thereunder. 19. On or about the 22nd day of October, 1945, the beneficiary under said insurance policy, transferred and assigned its right, title and insurance policy, transferred and assigned its right, title and interest in and to said policy to petitioner, the wife of the said insured, and authorized her to bring suit thereon in her own name, all of which will more fully appear from a true and correct copy of said assignment hereto attached and made a part of this petition."

The demurrers are: "1. The petition is demurred to generally because it fails to set forth a cause of action. 2. The petition is demurred to generally because the plaintiff shows no right of action in herself to bring said action. 3. Because the petition shows that the alleged assignment of the policy did not take place until after the death of the insured, and further to show any right or authority in the First Federal Savings and Loan Association, the beneficiary named in the policy, to transfer and assign said policy to the plaintiff. 4. Paragraphs 6 and 7 of the petition are specially demurred to because they show that the first premium, as well as the premiums for the months of May and June, 1945, were not paid when due, or that the time for their payment was extended by the President, Vice-President or Secretary of the defendant company in writing. 5. Said paragraphs 6 and 7 are further demurred to because they fail to show delivery of said policy to the insured and its acceptance by him and payment of the first premium in accordance with the stipulations of said policy. Ground 6 is abandoned. 7. Paragraph 18 is specially demurred to for the reason that it fails to show that any one entitled to make claim to the proceeds of said policy has offered to make proof of the death of the insured. 8. Paragraph 19 of the petition is specially demurred to for the reason that the allegations therein fail to show that the alleged transfer and assignment of said insurance policy was made after written notice had been given to the insurance company by the insured, and that such change of beneficiary had been assented to by an endorsement on said policy by the company at its home office and that said assignment was filed in duplicate at the home office of the insurance company." 1. We will discuss grounds 1, 2, and 8 of the demurrer together. These grounds attack the petition because the plaintiff had no right to maintain the action since the policy was not assigned in compliance with a stipulation in the policy concerning the assignment of the policy. The policy provides: "No assignment of this policy shall be binding upon the company unless filed in duplicate at the home office, one to be retained by the company, and the other to be returned to the insured. The company assumes no responsibility for the validity of the assignment." In Steele v. Gatlin, 115 Ga. 929, 931 (42 S.E. 253, 59 L.R.A. 129), it was said: "A policy of life insurance is a chose in action." The Code, § 85-1803, reads: "All choses in action arising upon contract may be assigned so as to vest the title in the assignee, but he takes it, except negotiable instruments, subject to the equities existing between the assignor and debtor at the time of the assignment, and until notice of the assignment is given to the person liable." Section 56-828 reads: "After the loss shall occur, a sale of the property insured and transfer of the policy shall not affect the liability of the insurer, but the assignee may recover on the policy to the same extent as the assignor could have done." In Georgia Co-op.Fire Association v. Borchardt, 123 Ga. 181 (1, 2) (51 S.E. 429, 3 Ann. Cas. 472), the Supreme Court said: "The assignment of a fire-insurance policy without the consent of the insurer, after a loss has occurred thereunder, does not render the policy void, but the assignee has the right to bring an action thereon. . . Such an assignment is valid without the consent of the insurer, although the written transfer of the policy purports by its terms to be subject to the consent of the insurer." See also Daniels v. Meinhard Bros. Co., 53 Ga. 359 (3). The Code, § 56-911, reads: "The principles before stated as to fire insurance, wherever applicable, shall be equally the law of life insurance."

In 46 C. J. S. 1169, p. 53, it is said: "Except under circumstances to which policy or statutory prohibitions expressly apply, the policy, or the claim or cause of action thereunder, may be validly assigned after maturity, even though, because of prohibitions or limitations in the policy, it could not have been assigned before the policy had matured; and stipulations prohibiting assignments after maturity have been held void as against public policy."

It is stated in 37 C. J. 140, note 85 (d): "After the maturity (1) of the policy by the happening of the loss, consent of the company to the assignment is immaterial (Meagher v. Life Union, 65 Hun. 354, 20 N. Y. Supp. 247; Mower v. Reverting Fund Assurance Association, 1 Pa. Super. 170); (2) because it has become a debt and is no longer subject to the restrictions in the policy (Mower v. Fund. Assur. Assoc., supra)." It would thus appear that after the life-insurance policy has matured by the death of the insured, the policy may be assigned as any chose in action regardless of any stipulation in the policy. A stipulation in a life-insurance policy as above set forth, relative to an assignment thereof, applies to an assignment during the lifetime of the insured, and has no application whatsoever to an assignment after the death of the insured. Counsel for the defendant cite a number of authorities to sustain their contention that the plaintiff had no right to maintain the action because there was no transfer to her in accordance with the stipulations in the policy. The cases cited by counsel are:Security Mutual Life Ins. Co. v. Bankers Trust c. Co.,32 Ga. App. 536 (124 S.E. 53); Thomas v. Metropolitan LifeIns. Co., 144 Ga. 367 (87 S.E. 303); McNeil v.Metropolitan Life Ins. Co., 58 Ga. App. 588 (199 S.E. 442);Metropolitan Life Ins. Co. v. Applewhite, 66 Ga. App. 290 (18 S.E.2d 93); Tyler v. National Life c. Ins. Co.,48 Ga. App. 339 (172 S.E. 747). Upon an examination of these cases, it will be found that the assignment or attempted assignment was made during the lifetime of the insured, except in the Tyler case, where it is apparent that there was an attempted assignment after the death of the insured. If there be any conflict in what we have herein ruled, based on both statutory law and the decisions of the Supreme Court which we have cited, the ruling in the Tyler case, must yield to the statutory law and to the Supreme Court decisions. It might be that the facts in the Tyler case differentiate it from the facts in the instant case.

2. Ground 3 of the demurrer attacks the petition because it does not allege what amount, if any, was due to the beneficiary, First Federal Savings and Loan Association, at the time of the death of the insured, and because the only consideration expressed in the transfer from the loan association to the plaintiff was "for a sufficient and valuable consideration." It clearly appears from the petition that the beneficiary was a creditor of the insured. It is elementary that a creditor has an insurable interest in the life of his debtor to the extent of the debt. A specific amount is alleged in the petition to be due, under the policy, to the assignee. She stands in the shoes of the assignor to the extent of his debt. This is a question of proof.

3. Ground 4 of the demurrer attacks the petition on the ground that the first premium had not been paid in accordance with the stipulation of the policy, and that the time for payment was not extended by the president, vice-president, or secretary of the company, in writing, in accordance with the terms of the policy. The petition alleged that the policy was effective April 1, 1945, and that the soliciting agent of the company, First Federal Savings and Loan Association, held it until June 9, 1945, at which time the soliciting agent collected the premiums for the months of April, May, and June, and delivered the policy to the insured at a time when he was in good health; that the soliciting agent retained the premiums and has them now. On June 19, 1945, the insured was stricken with a heart attack and died before medical aid could reach him.

The stipulations of the policy concerning the premiums and the delivery of the policy are:

"Consideration: This contract is made in consideration of the advance payment of One and 79/100 Dollars which maintains this policy in force for a period of one month from the date hereof and the payment hereafter on the 1st day of each month of the monthly premium stipulated in the table of premiums on the fourth

"Premiums: The policy shall not take effect until it has actually been delivered to and accepted by the insured, nor until the first premium shall have been paid while the insured is alive and in good health. Possession of this policy shall not be construed as a waiver of these conditions.

"All premiums are payable on or before their due date at the home office of the company, or to an authorized agent of the company, etc. . . Failure to pay any premium or installment thereof when due shall cause this policy to cease and determine, except as herein provided, and all payments made hereon shall remain the property of the company.

"Only the president, vice-president, or secretary has the power on behalf of the company, and then only in writing, to make or modify this or any other contract of insurance, or extend the time for paying any premium, and the company shall not be bound by any promise or representation heretofore or hereafter given by any agent or person.

"Application for insurance B: The insurance issued in pursuance of this application shall in no event take effect or be binding until the written policy is delivered to the assured while in good health and the full first premium paid."

It must be kept in mind that First Federal Loan and Savings Association was the soliciting agent for the policy of insurance in question. The insurance company sent the policy to the loan company, its soliciting agent. The loan company kept it and finally, on June 9, 1945, collected the monthly premiums for April, May, and June and delivered the policy to the insured, according to the allegations of the petition. It is well established that stipulations in a life-insurance policy similar to the provisions now under consideration apply only after the policy is put into effect by the payment of the premiums and delivery of the policy. They do not apply to negotiations leading up to the execution and delivery of the contract and the payment of the first premium. In Progressive Life Ins. Co. v. James,62 Ga. App. 387 (8 S.E.2d 91), Chief Judge Broyles speaking for the court said: "One who solicits insurance and represents the company in conducting the negotiations which lead up to the execution of the contract, and subsequently in the delivery of the contract itself, is the general agent of the company with reference to that particular contract. Relative to it, he is as much the alter ego of the company as any other corporate officer." Therefore the contention that the first premium was not paid on April 1, and that the time had not been extended by the president, vice-president, or secretary of the defendant company, in writing, is without merit. See also in this connection Life Casualty Ins. Co. of Tenn. v. Jordan, 69 Ga. App. 287 (25 S.E.2d 103); Citizens National Life Ins. Co. v. Ragan, 13 Ga. App. 29 (2) (78 S.E. 683); Kelley v. Carolina Life Ins. Co.,48 Ga. App. 106 (171 S.E. 847); Causey v. Gulf Life Ins. Co.,62 Ga. App. 378 (8 S.E.2d 535); Jones v. Pacific MutualLife Ins. Co., 57 Ga. App. 16 (194 S.E. 249). It therefore follows that this ground of the demurrer shows no cause for reversal.

4. Ground 5 of the demurrer attacks the petition on the ground that it does not allege facts sufficient to show delivery during the life of the insured while he was in good health and after the collection of the first premium. We have partially covered this question with reference to the payment of the premium. The question of delivery is one of fact. On this subject we find in 145 A.L.R. 1436, the following: "Whether a policy of insurance has been ``delivered' or ``actually delivered' within an express provision for delivery in order to make the policy effective as a contract of insurance, is dependent chiefly upon the intention of the parties as shown by their acts or agreements. And as said in Couch on Insurance, Vol. 1, p. 277, Par. 119, ``the criterion by which the question is to be determined is not who has actual possession of the policy, but who has the right of possession.' The tentative statement of the general rule, suggested with certain reservations in the previous annotation at 493, and adopted by American Jurisprudence (29 Am. Jur. 164, 165, Insurance, Sec. 148) has proved its correctness by the later decisions. The rule is stated as follows: ``Where an application for a policy of insurance has been accepted, and a policy issued, the premium paid, and nothing remains to be done by the applicant, any disposition of the policy by the insurer which evidences an intention to put the policy out of its control, and in the control of the applicant, is sufficient to amount to a delivery, or actual delivery, of the policy within the terms of a provision referring to delivery or actual delivery.'" This ground shows no cause for reversal.

5. Ground 7 attacks the petition on the ground that no one entitled to do so has offered to make proof of the death of the insured. Paragraph 18 of the petition reads: "Petitioner shows that the defendant has waived the requirements of said policy relating to the furnishing of proofs of death, by refusing to furnish the same and by refusing to pay the proceeds of said policy and by denying liability thereunder." The allegations of this paragraph dispense with the requirement to make proof of death of the insured. Adams v. Washington Fidelity National Ins. Co., 48 Ga. App. 753 (3) (173 S.E. 247), reads: "A denial by an insurance company of liability under a life-insurance policy after it had received notice of the insured's death, and a refusal by the company to furnish blanks upon which proofs of death should be made as required by the policy, dispenses with a compliance with this provision of the policy." There is no merit in this ground.

We have carefully read the authorities cited by the attorneys for the defendant, and while we have not called attention to all of them, they are not authority, as we see it, for the contentions urged.

The court did not err in overruling the demurrers for any of the reasons assigned.

Judgment affirmed. Broyles, C. J., and MacIntyre, J.,concur.