Opinion
44401.
ARGUED APRIL 9, 1969.
DECIDED APRIL 24, 1969.
Action on insurance policy. Cook Superior Court. Before Judge Lott.
Harris, Russell Watkins, R. Reese Watkins, Philip R. Taylor, for appellant.
Reinhardt, Ireland, Whitley Sims, Tyron Elliott, for appellee.
1. (a) Insurance, including group insurance, is a matter of contract, and the language used is to be construed by giving the usual and ordinary meaning to it in arriving at the intention of the parties. If there is no ambiguity it must be construed to mean what it says.
(b) A contract of group insurance is made up of the master group policy and the certificate, which must be construed together. The certificate holder is bound by the provisions of the group policy, the certificate being evidence of coverage thereunder.
2. Contracts, including insurance policies, even when ambiguous, are for construction by the court unless, after applying all pertinent rules of construction the ambiguity remains.
3. Where the master group policy provided that the maximum liability of the company as to any one certificate holder between the ages of 61 and 65 years at the time of issue should be $5,000, the amount of its liability was not increased beyond that amount by the issuance to a man 62 years of age of certificates for a total of $10,000 insurance. The only liability of the company in connection with the excessive amount was for a return of the premiums paid therefor.
4. Where a provision appears in the master group policy that all agreements of the company must be signed by its president or secretary and that no other person could waive or alter the policy provisions, issuance by an agent of certificates in excess of the company liability under the specific terms of the policy could not increase the liability of the company beyond that provided in the policy.
ARGUED APRIL 9, 1969 — DECIDED APRIL 24, 1969.
On March 30, 1964, Cherokee Credit Life Insurance Company issued to the Bank of Lenox a master group credit insurance policy by and under which certificates of insurance might be issued to borrowers from the bank insuring their lives in connection with the making of loans, and which provided, inter alia:
"4. Each debtor of the creditor, who is in insurable health, in the following classes of indebtedness shall be eligible for insurance hereunder.
"(a) On a level loan basis (indebtedness repayable in one sum at maturity), the insurance shall equal the amount of such loan and shall be in force for the number of months for which premiums are paid but shall not, on the effective date for the nearest birthday ages between . . . 61 and 65 years, exceed 36 months, and the amount of $5,000 for any one insured debtor. . .
"General Provisions.
"12. All Agreements Must Be Signed by an Executive Officer: All agreements made by the company are signed by its president and secretary. No other person can alter or waive any of the conditions of this policy or make any agreement which shall be binding upon the company. . .
"17. The creditor is hereby authorized to issue certificate [sic] of insurance on the company's forms to the debtor when the latter has complied with the requirements for coverage hereunder. . .
"22. Maximum Amount of Insurance: The company shall not be liable for any insurance on any one life in excess of $10,000 through age 60, nor in excess of $5,000 on ages of issue from 61 through 65. Any premium paid to the company which results in an excess under one or more certificates issued by the insurance company on the same life shall be refunded. Furthermore, the company shall not be liable for any insurance on any one life in excess of $1,000 on age of issue from 66 through 70."
On October 20, 1967, while the master group policy was in force, J. W. Baker, Sr. negotiated a loan from the Bank of Lenox, executing to it his promissory note for $8,000, and in connection with that transaction the bank issued to him a group credit life insurance certificate in the amount of $9,000. On October 28, 1967, he negotiated another loan from the bank in the amount of $7,000, and in connection with that transaction the bank issued to him a group credit life insurance certificate in the amount of $1,000. Each of the certificates was issued under and pursuant to the master group policy and each provided, inter alia, as follows:
"Conditions of Coverage.
"Cherokee Credit Life Insurance Company hereby certifies that under and subject to the terms of a master group credit insurance policy issued to the creditor [Bank of Lenox] named on the reverse side the debtor, if he is in insurable health at the time this certificate is written, is insured for one or more of the coverages listed below, provided, however:
"3. That no coverage shall exist, whether indicated or not, which is not expressly granted in the master policy issued to the creditor."
Applications for the certificates, signed by Mr. Baker, listed his age as being 62. These were sent in to the company, and on November 10, 1967, a communication was directed by it to the Bank of Lenox calling attention to the fact that at age 62 Mr. Baker was entitled to no more than $5,000 coverage, and a refund was enclosed for the excess premium.
Mr. Baker was killed in an automobile accident November 1, 1967, and proof of death and claim under the certificates was sent in by the bank to the company, crossing in the mail with the notification of excess coverage and premium refund.
The company issued its check for $5,000 to the bank and denied liability for any further sum. The bank accepted the $5,000 for crediting on Mr. Baker's indebtedness to it, and his widow, as temporary administratrix of his estate, made claim for an additional $5,000. When the company refused to pay, under a provision in the policy that any coverage in excess of the debt should be paid to the beneficiary or the insured's estate, and under a similar provision of Code Ann. § 56-3306 (2), the administratrix filed suit to recover the additional $5,000 claimed.
After defensive pleadings were filed, both plaintiff and defendant moved for summary judgment, the plaintiff relying upon the pleadings and exhibits (the policy and certificates) and the defendant presenting additionally the deposition of Roby H. Robinson, Sr., President of the Bank of Lenox, and affidavits of Roby H. Robinson, Jr., and Mrs. Sandra Rountree, employees of the bank, and of Don K. Miller, a vice president of the company.
Plaintiff's motion was granted and summary judgment for the $5,000 was entered in her favor, and the motion of defendant was denied. From these rulings defendant appeals.
1. Insurance is a matter of contract, and the language used is to be accorded its general ordinary meaning, bearing in mind that the contract is to be construed in accordance with the intention and understanding of the parties, and in construing it the court cannot go further than a fair construction of the language used will permit. North British c. Ins. Co. v. Tye, 1 Ga. App. 380, 389 ( 58 S.E. 110). "The contract must be construed by the words, unless there be some reason for taking the case out of this first great rule for the construction of contracts." Roberts v. Willink, 21 Ga. 97, 103. "There is no greater sanctity and no more mystery about a contract of insurance than any other. The same rules of construction apply to it as to other contracts, and the true rule for their interpretation may be stated to be, that stipulations and conditions in policies of insurance like those in all other contracts, are to have a reasonable intendment, and are to be so construed, if possible, as to avoid forfeitures and to advance the beneficial purposes intended to be accomplished." Clay v. Phoenix Ins. Co., 97 Ga. 44, 53 ( 25 S.E. 417). Where the contract is unambiguous, it must be construed to mean what it says. This rule applies to language limiting coverage. State Farm Mut. Auto. Ins. Co. v. Sewell, 223 Ga. 31 ( 153 S.E.2d 432).
In construing a contract of group insurance we are to apply, additionally, the rule that the master group policy and the certificate of insurance must be construed together, for it takes both to make the contract. "The certificate is not, of itself, a complete contract by the company. It expressly provides that the terms and conditions of the contract are to be regulated by [group] policy number ______. On its very face, the paper produced shows that it does not contain the whole contract. How can any one say what the contract was from the certificate alone? What is the risk taken?" Underwriters' Agency v. Sutherlin, 46 Ga. 652, 655. And see Sutherlin v. Underwriters' Agency, 53 Ga. 443. "What relation does the certificate bear to the policy? It cannot be assumed but that the obligation of the certificate was in the contemplation of both of the parties to the contract of insurance. The policy refers to the certificate, and the certificate refers to the policy as the basis of its issuance. . . The policy and the certificate are interlocked like the Siamese twins. Contemporaneous instruments, each affecting and controlling the same subject matter . . . the two writings may be considered as essential, indivisible parts of one contract. United it stands, divided it falls." Carruth v. Aetna Life Ins. Co., 157 Ga. 608, 616 ( 122 S.E. 226). Accord: Lipshitz v. New Zealand Ins. Co., 34 Ga. App. 825 ( 132 S.E. 131); Metropolitan Life Ins. Co. v. Harrod, 46 Ga. App. 127 ( 166 S.E. 870); Aetna Life Ins. Co. v. Padgett, 49 Ga. App. 666 ( 176 S.E. 702); Lancaster v. Travelers Ins. Co., 54 Ga. App. 718 ( 189 S.E. 79). Cf. Edwards v. Farmers Mut. Ins. Assn. of America, 128 Ga. 353 ( 57 S.E. 707, 12 LRA (NS) 484, 119 ASR 385, 10 AC 1036); Hynds v. Farmers Mut. Ins. Assn., 45 Ga. App. 751 ( 165 S.E. 839). Of course, if the contract is ambiguous the ambiguity is to be resolved against the insurer. Aetna Life Ins. Co. v. Padgett, 49 Ga. App. 666, supra, and citations. But ambiguity is not to be created by lifting a clause or portion of the contract out of context ( Midland National Ins. Co. v. Wright, 117 Ga. App. 208 (1) ( 160 S.E.2d 262)), nor are we to call forth doubt or make hypercritical constructions. New York Life Ins. Co. v. Thompson, 45 Ga. App. 638 ( 165 S.E. 847). The natural, obvious meaning is to be preferred over any curious, hidden meaning which nothing but the exigency of a hard case and the ingenuity of a trained and acute mind would discover. Maddox v. Life Cas. Ins. Co., 79 Ga. App. 164, 174 ( 53 S.E.2d 235). The language of the contract in its entirety should be given a reasonable construction, not beyond that fairly intended within its terms. New York Life Ins. Co. v. Thompson, 45 Ga. App. 638, supra.
The certificate is evidence of coverage under the master policy. Lancaster v. Travelers Ins. Co., 54 Ga. App. 718, supra; Blaylock v. Prudential Ins. Co., 84 Ga. App. 641, 644
(67 S.E.2d 173). And the certificate holder is bound by the provisions of the master policy. Moore v. Prudential Ins. Co., 56 Ga. App. 356, 362 ( 192 S.E. 731). "True, [the group policy] is in the custody of [another]; but that was well known to the parties. . . . In any event, the paper certificate declares and notifies all concerned that it is not the whole contract. It was in the power of the plaintiff to compel the production of the policy. . . ." Underwriters' Agency v. Sutherlin, 46 Ga. 652, 655, supra.
Where an insured contended that he had paid for and accepted the certificate of insurance, which declared in general terms that he was insured against loss by fire, but which elsewhere referred to another instrument, presumably a blank form of policy, containing certain limitations of the risk assumed, which policy he never saw and the terms of which he never knew, "To that contention the law makes this answer: The [insured] accepted an instrument which contained a reference to another instrument in which were embodied the limitations, and which were made a part of the contract. [He was] presumed to know the contents of the paper which [he] received, and if [he] had read it [he] would have observed that it referred to and adopted the provisions of the other instrument. [He] had the right to demand an inspection of that instrument, and, if inspection had been refused, to decline to enter into the contract." Conner v. Manchester Assur. Co., 130 F 743, 745 (9th Cir.) and see State Farm Mut. Auto. Ins. Co. v. Sewell, 223 Ga. 31, 32, supra.
2. Contracts, including insurance policies, even when ambiguous, are to be construed by the court, and it is only after application of the pertinent rules of construction and the ambiguity remains that a fact question arises to be explained by extrinsic evidence and resolved by a jury. Davis v. United c. Life Ins. Co., 215 Ga. 521 (2) ( 111 S.E.2d 488). Where there is no ambiguity, construction of the contract is solely within the province of the court, and the court must expound it as made. Yancey v. Aetna Life Ins. Co., 108 Ga. 349 ( 33 S.E. 979); Wheeler v. Fidelity Cas. Co., 129 Ga. 237 ( 58 S.E. 709); State Farm Mut. Auto Ins. Co. v. Sewell, 223 Ga. 31, supra.
3. Applying these rules of construction it becomes apparent at once that there is no ambiguity in the contract. The limit of liability arising upon the death of Mr. Baker was the sum of $5,000 plus a refund of premiums for any insurance in excess of that as represented by certificates issued by the bank. Cf. Life Cas. Ins. Co. of Tenn. v. Carter, 55 Ga. App. 622 ( 191 S.E. 153), affirmed 185 Ga. 746 ( 196 S.E. 415); Gray v. Life Cas. Ins. Co., 48 Ga. App. 80 ( 171 S.E. 835); Tate v. Industrial Life Health Ins. Co., 58 Ga. App. 305 ( 198 S.E. 303). Cf. Johnson v. American Nat. Life Ins. Co., 134 Ga. 800 (2) ( 68 S.E. 731).
4. No increase in the company's liability under the contract could be assented to save in writing and signed by its president or secretary, for the policy provides on its face that only these could alter or waive any conditions of the policy or make any agreement binding upon the company. Hutson v. Prudential Ins. Co., 122 Ga. 847 ( 50 S.E. 1000); Rome Industrial Ins. Co. v. Eidson, 138 Ga. 592 ( 75 S.E. 657); Reliance Life Ins. Co. v. Hightower, 148 Ga. 843 ( 98 S.E. 469); New York Life Ins. Co. v. Patten, 151 Ga. 185 ( 106 S.E. 183). And see Vulcan Life Accident Ins. Co. v. United Banking Co., 118 Ga. App. 36 ( 162 S.E.2d 798).
The company has discharged its liability under the contract by payment of the $5,000 and refund of premiums on the excess of insurance issued above that amount. It was error to enter summary judgment for the plaintiff; judgment should have been entered for the defendant.
Judgment reversed with direction that judgment be entered for the defendant. Bell, P. J., and Deen, J., concur.