Bailey v. Bankers Health & Life Insurance

The beneficiary under a policy which contained provisions for payment to the insured of weekly benefits on his total disability was not entitled, on the death of the insured, to maintain an action against the insurer for recovery of any weekly benefits which might have been due to the insured before his death. The policy having lapsed before the death of the insured, the plaintiff was not entitled to recover the death benefits.

DECIDED MARCH 10, 1943. The Bankers Health Life Insurance Company insured the life of J. H. Bailey. It was provided in the policy, that, in consideration of the payment of a weekly premium of twenty-five cents on or before each Monday during the continuance of the policy, the insurer would pay to the beneficiary $50, the amount of the death benefit set out therein, "within twenty-four hours after the acceptance at the home office of satisfactory proof of the death of the insured during the continuance of this contract." The policy also provided that the company agreed to pay "to said insured" the weekly benefit of $5 as set out in the policy in the event of sickness or disability from accident. Lula Bailey was named the original beneficiary, but the policy shows a change of beneficiary to Amanual Bailey, son of the insured. The policy provided, that "all premiums must be paid on Monday of each week, and any one failing to pay for four Mondays forfeits all he or she may have paid the company;" that no more than twenty full weekly benefits would be paid to the insured "in any one twenty months for the same disease;" that "should this policy not be observed in all respects . . then this policy becomes void;" and that "no suit shall be brought against the company under this policy within thirty days from date the claim submitted was due, nor after six months from date the sickness, or injury, or death occurred." On January 17, 1941, while the policy was in force, the insured became totally disabled physically from sickness, and continued in this condition until December 17, 1941, when he died. At the time the insured became totally disabled the company had notice thereof, and paid two weekly benefits of $5, refusing to pay any more weekly benefits to the insured for such disability.

On February 17, 1942, Amanual Bailey filed suit to recover the balance of the weekly sick benefits, amounting to eighteen payments of $5 each, which the defendant had refused to pay to the insured, and to recover $50 for the death of the insured, alleging that the defendant was due to pay to the plaintiff the remaining balance of the weekly benefits which totaled $90, less approximately $12, which was the amount of premiums due on the policy from the date of the insured's total disability to his death on December 17, 1941. The plaintiff alleged that the refusal to pay both the weekly benefits and the death benefit was in bad faith, and therefore that the defendant was liable for 25 per cent. as damages and $100 attorneys' fees as provided by law; and that by such refusal to pay the defendant had waived all compliances with the terms of the policy relative to giving notice of sickness, notice of proof of death, etc.

The court sustained a demurrer to the petition, and struck from it the allegations and prayer relative to recovery of the weekly benefits as provided in the policy, on the ground that the plaintiff, as the beneficiary under the policy or as the son and heir of the insured, could not recover such weekly benefits. The plaintiff excepted pendente lite. Thereafter he filed an amendment in which he alleged that he was amending the petition to meet such order of the court wherein his right to recover was confined to the death benefit. He alleged that from January 17, 1941, to December 17, 1941, his father, the insured, was totally disabled from his sickness and was confined to his room and bed until his death, and for that reason could not take any action against the company to enforce payment of the weekly benefits before his death; that during the sickness of the insured the plaintiff bore the expenses of caring for him, providing food and medicine for him; and that he paid his funeral expenses, and for that reason he was entitled to such weekly benefits; and that, "in so amending, plaintiff does not waive claim to the same, and at the same time of filing this amendment files his exceptions pendente lite to the order of the court restricting plaintiff to the death benefit." "For further amendment, not waiving rights to said disability benefits, and to conform to said order of the court, plaintiff sues for said death benefit in the sum of $50 as provided in said policy, and an additional sum of $12.50, twenty-five per cent. of said death benefit, the same being as damages as provided by laws of this State, by reason of failure and refusal to pay said death benefit, the same being in bad faith in so failing and refusing, and by reason of defendant's causing plaintiff time and expense of employing attorneys to prosecute this case, and for a further reason that defendant is unreasonably litigious and stubborn in refusing and failure to pay said benefits provided for in said policy, and for the same reason plaintiff further sues for the sum of $50 as attorneys' fees, making a total sued for in the sum of $112.50, less said premiums as herein before set forth, to wit, the sum of $11.75, deducted from said total in favor of defendant. Plaintiff further amends by striking, abandoning, and withdrawing any allegations in his original petition as amended that may be in conflict with the foregoing amendment, having reference to said disability benefits and any assignment of said policy." This amendment was allowed, subject to further demurrer.

The defendant renewed its general demurrer to the petition as a whole. The judge sustained the demurrer and dismissed the action. The plaintiff filed exceptions to the appellate division of the trial court, in which he assigned error on the exceptions pendente lite and on the dismissal of the action. The appellate division affirmed the rulings complained of, and the plaintiff excepted. 1. The plaintiff, as the son and heir at law of the insured, would not be entitled to recover the weekly benefits which the defendant agreed to pay to the insured in the event of his becoming disabled from sickness and confined to his bed. The same is true as to the plaintiff as beneficiary of the policy. The policy provides that the company agrees "to pay to said insured the amount of the weekly benefit." The insured became disabled from sickness on January 17, 1941, and continued in such condition until his death on December 17, 1941; and it was alleged that the company paid to him two of the weekly benefits but refused to pay the remaining eighteen weekly benefits of $5 each. Any right to recover the weekly benefits was in the insured until his death; and if any right to recover them survived his death, it would be in his administrator if he died intestate. "Upon the death of a person intestate, choses in action in his favor pass to his administrator; and his heirs at law can take no more than an equitable interest therein, except through the intermediation of the administrator. The heirs, although all of them are sui juris and of full age, can not maintain an action at law upon a chose in action in favor of the intestate, notwithstanding there is no administrator and all debts due by the intestate have been paid." Hill v. Maffett, 3 Ga. App. 89 (59 S.E. 325). See Moore v. Cox, 54 Ga. App. 207 (187 S.E. 609); Code, §§ 113-901, 113-907.

In a suit on the policy for the weekly benefits which the defendant had contracted to pay to the insured, the plaintiff would not be entitled to recover, either as beneficiary or as the son and heir of the insured, because he supported and cared for the insured during the time he was disabled. The policy was a contract between the insured and the defendant, and under it the company agreed to pay the weekly benefits to the insured, and not to the plaintiff either as the beneficiary named in the policy or as the heir of the insured. The court properly sustained the demurrer and struck that portion of the petition which sought to recover the weekly benefits.

2. The court did not err in dismissing the petition in which the plaintiff sought to recover the death benefit provided for in the policy. It affirmatively appeared from the petition as amended that the insured paid no weekly premiums after January 17, 1941, and that his death occurred on December 17, 1941, which was more than four weeks after the payment by the insured of any premium. The policy provided that the payment by the company of the death benefit was predicated on the payment by the insured of a weekly premium on or before each Monday, and that the company agreed to pay such death benefit within twenty-four hours after the acceptance by it of satisfactory proof of the death of the insured "during the continuance" of the policy. The policy also provided that the claim for death benefit must be accompanied by satisfactory proof of the insured's death; also that no claim should be paid that was not presented in accordance with the terms of the policy; also that all premiums must be paid on Monday of each week, and that failure to pay premiums for four Mondays forfeited all premiums paid; and that should the policy not be observed in all respects it would become void. Therefore it affirmatively appears from the plaintiff's allegations that, relatively to payment of the death benefit, the policy had lapsed for non-payment of premiums, and was unenforceable at the time of the death of the insured.

It is claimed by the plaintiff that the company, being due to the insured eighteen weekly benefits of $5 each, could not lapse the policy for non-payment by the insured, during his total disability and confinement to his bed from sickness, of the weekly premium of twenty-five cents, the total amount of such unpaid weekly premiums being far less than the total amount of the weekly benefits due the insured. It is contended that the company should have applied the amount owing the insured to the premiums due, and should not have lapsed the policy. The plaintiff assumes that the weekly benefits provided for under the policy became payable to the insured upon his disability, whereas under the provisions of the policy "each week's benefit must be separately applied for, and are due after seven days of total disability from date the company received the notice at their office." There is no contention that these provisions of the policy were complied with. Consequently it does not appear that the weekly benefit provisions of the policy became operative so as to warrant the finding that the company had money due to the insured in its possession, to be applied toward the payment of the weekly premiums, and thus prevent the lapsing of the policy for non-payment of premiums before the death of the insured.

It is true that the authorities hold that where an insurer has in its hands a fund absolutely due and payable to the insured before the date on which his premium becomes due, the company should apply such fund if necessary to avoid a forfeiture of the policy for non-payment of premiums. See 32 C. J. 1308. However, an entirely different situation is presented in this case. Here the claim of the insured for weekly benefits for the full twenty weeks, as provided in the policy, was denied by the insurer, and payment thereof was refused; and although the insured did not die until December 17, 1941, after he became disabled on account of sickness and confined to his bed on January 17, 1941, he made no effort during his lifetime to have his right to these weekly benefits determined. In such a case, there being no funds in the hands of the company due from it to the insured when these weekly premiums fell due, which it should have applied to avoid lapsation of the policy, the contention that the policy had not lapsed for non-payment of weekly premiums at the time of the death of the insured, for the reason that the company should have applied the weekly benefits owing to the insured to the payment of these premiums, can not be sustained. The precise question for determination here was not presented in Washington NationalInsurance Co. v. Dukes, 53 Ga. App. 293, 298 (185 S.E. 599). That case was an action by the insured to recover the weekly benefits. The court held that the insurer could not lapse the policy, during the continuance of the insured's total disability, for non-payment of premiums, where it appeared that the amount of premiums claimed and due were less than the amount of disability payments due to the insured.

The appellate division of the court properly affirmed the rulings of the trial court sustaining the demurrers.

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