Opinion
37634.
DECIDED MAY 8, 1959.
Action on insurance policy. Albany City Court. Before Judge Jones. February 11, 1959.
Burt Burt, for plaintiff in error.
D.C. Campbell, Jr., H. G. Rawls, contra.
1. "All contracts of insurance, including life insurance, `to be binding, shall be in writing.' Code §§ 56-801, 56-911; Atlas Assurance Co. v. Kettles, 144 Ga. 306, 308 ( 87 S.E. 1). Nor can such a contract be made partly in writing and partly in parol. Athens Mutual Ins. Co. v. Evans, 132 Ga. 703 (4) ( 64 S.E. 993)." Mitchiner v. Union Central Life Ins. Co., 185 Ga. 194 ( 194 S.E. 530).
2. The fact that a soliciting agent of an insurance company may have unrestricted powers as to the making of the contract of insurance can in no way alter the requirements of law stated in the foregoing note. Athens Mutual Ins. Co. v. Evans, 132 Ga. 703, 704, supra; Burks v. Colonial Life Accident Ins. Co., 98 F. Supp. 140, affirmed 192 F.2d 643, certiorari denied 343 U.S. 915 ( 72 S. Ct. 648, 96 L. Ed. 1330).
3. For an insurance contract to be valid it must, among other requisites, contain an agreement as to period of duration of the risk assumed. Electric City Lumber Co. v. New York Underwriters Ins. Co., 43 Ga. App. 355 ( 158 S.E. 620); Electric City Lumber Co. v. Globe Rutgers Fire Ins. Co., 43 Ga. App. 444 ( 159 S.E. 122); J. T. Knight Son v. Superior Fire Ins. Co. of Pittsburgh, 80 F.2d 311.
4. While insurance companies are bound to know customs of places where they transact business, and are assumed to have made their contracts with reference thereto ( Todd v. German-American Ins. Co., 2 Ga. App. 789, 59 S.E. 94); and, while the custom of any business or trade is binding between contracting parties when it is of such universal practice as to justify the conclusion that it became by implication a part of the contract (Code § 20-704 (3)), the statutory requisite, that contracts of insurance be in a writing, or writings, setting forth all material elements of a contract of insurance before such a contract is enforcible, may not be obliterated by custom. Todd v. German-American Ins. Co., supra.
5. Under an application of the foregoing principles of law to the facts of this case as detailed in the statement of facts appended hereto, no enforcible contract existed between the parties to this suit. The entire contract was not in writing in compliance with the statute, as the duration of the risk to be assumed and the time at which the risk to be assumed would begin is not in writing, and this defect could not be supplied by oral agreement.
6. Should it be contended that the contract consisted of the application, the medical report illustrating the applicant's insurability, the payment of the first month's premium, which the defendant company retained until the death of the applicant, plus the alleged custom, such a contention is at variance with the stated law of this State as the application contains the stipulation "that the insurance hereby applied for shall not take effect until issued by the company and delivered to me [the applicant] and accepted by me and the first full premium paid during my good health . . ." and custom or usage cannot be set up to vary the written unambiguous provisions of a contract the terms of which are at variance with the alleged custom. Colfax Gin Co. v. Buckeye Cotton Oil Co., 24 Ga. App. 610 ( 101 S.E. 697). See also in this connection Pendley v. Union Bankers Ins. Co., 99 Ga. App. 189 ( 107 S.E.2d 910).
7. While contracts for interim insurance are well established in this State, where written binders are executed, as in Guest v. Kennesaw Life c. Ins. Co., 97 Ga. App. 840 ( 104 S.E.2d 633), no such question is presented in the case under consideration.
8. The sole assignment of error here, that the trial court erred in overruling the general demurrer to the petition, is well taken, and the judgment of the trial court must be
Reversed. Felton, C. J., and Nichols, J., concur.
DECIDED MAY 8, 1959.
On September 18, 1958, Mrs. Hilda P. Downard filed her petition in the City Court of Albany against Peninsular Life Insurance Company, seeking to recover the amount of $5,000 under the terms of an alleged contract of insurance between the defendant insurance company and her husband, David H. Downard. The material allegations of her petition as finally amended are these: On June 14, 1958, Mr. Downard applied to the defendant insurance company for insurance on his life in the amount of $5,000, naming his wife, the plaintiff, as his beneficiary. On the date on which he applied for such insurance, Mr. Downard, at the suggestion of the defendant's agent, C. C. Cook, had a medical examination for the purpose of determining his insurability. Following the completion of his medical examination on June 16, 1958, Mr. Downard drew his check in the amount of $8.80 payable to the defendant with the notation thereon that the check was "for ins. premium." The check was cashed by the defendant on June 18, 1958. Mr. C. C. Cook, the defendant's agent who obtained the application for insurance, had stated to Mr. and Mrs. Downard that if the first monthly premium were paid and sent to the defendant company along with the application, Mr. Downard would be afforded interim protection; that is, the life insurance policy would become effective from the date the premium was paid and would afford protection to Mr. and Mrs. Downard during the interim between the receipt of the application and the actual execution and delivery of the policy by the company. The application was received in the defendant insurance company's home office on June 17, 1958, where it was retained up to and until July 2, 1958, the date of Mr. Downard's death, and neither Mr. nor Mrs. Downard was notified of the rejection of the application or of the fact that the application was being questioned in any respect; and, as the defendant insurance company retained the advanced premium, it is now estopped to deny liability under the terms of the insurance contract. There is a general custom prevailing among some insurance companies, of which the defendant company is one, selling insurance in the vicinity of Albany, Georgia, that upon payment by the applicant of the first premium being forwarded to the company along with the application and medical report, the insurance for which application is made becomes effective as of the date of the payment of the premium and the applicant is insured during the interim between the receipt of the application by the company and the issuance of the policy applied for. The defendant was aware of this prevailing custom when it took the application from Mr. Downard and accepted from him the payment of $8.80 covering the first monthly premium for the insurance and is, therefore, bound to make payment of the insurance. On July 2, 1958, while the insurance contract was in full force and effect, Mr. Downard died of a heart attack. On July 17, 1958, the plaintiff, on a form furnished by the defendant, duly submitted her proof of claim. At no time prior to Mr. Downard's death did the defendant insurance company contend that the insurance was not in force; but, subsequently to his death and after due proof of death had been submitted, the defendant failed and refused to pay the claim and denied liability. The receipt by the defendant insurance company on "July 17, 1958" [June 17, 1958?], of the application for insurance, the report of the defendant's medical examiner reflecting the insurability of the applicant, together with the check bearing the notation "for ins. premium", which the defendant retained until after the death of the insured, constituted an acceptance of the application by the defendant, and it is now estopped to deny its acceptance of the risk assumed by it for interim insurance coverage.
The application for insurance, the medical examiner's report, and the proofs of claim were attached to and made a part of the petition.
The usual limitation upon the powers of the insurance soliciting agent to add to, take from, or vary the terms of the contract, is not contained in the application for insurance, nor is the nature of his agency indicated; that is to say, whether the agency was general or special. The application does contain, however, the following stipulation: "I agree that the insurance hereby applied for shall not take effect until issued by the company and delivered to me and accepted by me and the first full premium paid during my good health . . ."
Upon the trial court's overruling the defendant's general demurrer to the petition as finally amended it assigns error in this court.