Opinion
37758.
DECIDED SEPTEMBER 17, 1959. REHEARING DENIED NOVEMBER 5, 1959.
Action on insurance policy. Hall City Court. Before Judge Blackshear. March 30, 1959.
Robert J. Reed, for plaintiff in error.
R. Wilson Smith, Jr., contra.
Under the allegations of the petition and the terms of the power of attorney given by the insured to the discount company, the present suit was properly instituted, and same set out a cause of action good against general demurrers.
DECIDED SEPTEMBER 17, 1959 — REHEARING DENIED NOVEMBER 5, 1959 AND NOVEMBER 30, 1959.
The Nalley Discount Company, individually, and as attorney in fact for Ralph Armstrong, as plaintiff, filed a suit against the defendant Queen Insurance Company of America, a New York insurance corporation, having and maintaining an office and general agent, Harry Johnson, d/b/a Harry L. Johnson Insurance Agency in Gainesville, Hall County, Georgia. The suit was filed in the City Court of Hall County. The petition alleged that said defendant insurance company was indebted to the petitioners on an insurance policy in the sum of $225; that the petitioners have demanded payment on such indebtedness and the defendant has refused to pay it; that on April 22, 1957, the defendant issued its policy No. 15-09-91, a copy being attached to and made a part of the petition, wherein the defendant insured a 1950 Ford coupe in the name of Ralph Armstrong for its actual cash value in case the automobile was destroyed, less the sum of $50 and that the premium required by the insurance company of $98 was paid to the above named agent. It is alleged by the petitioners that the petitioner, Nalley Discount Company, has an insurable interest in the contract of insurance, it being designated therein as the "loss payee" under Item 4 of the policy, and also that on October 10, 1957, the above car was involved in an accident; that on said date and just before the accident this automobile had a cash value of $325, but that immediately thereafter the car was worth only $50; that the policy was issued for one year beginning April 22, 1957, and was in full force and effect on October 10, 1957, when the car was damaged; that on or about October 11, 1957, the day after the accident, they notified the defendant's agent, Harry L. Johnson, of the accident, and some four days thereafter "at the instance of the defendant" an adjuster of the General Adjustment Bureau of Gainesville contacted the plaintiffs and advised them that in his opinion the above Ford car, so insured, was beyond repair due to the severe damage sustained and that he would obtain salvage bids on it; that the plaintiffs have repeatedly made demand on said defendant for payment of the loss as provided in the policy of insurance and the defendant has refused to make any payment; and it is alleged that the plaintiffs are entitled to recover the 25 percent penalty and reasonable attorney's fees as provided for under the provisions of Code § 56-706; that on April 26, 1957, Ralph Armstrong appointed in writing and under seal the Nalley Discount Company as his attorney in fact in the event of damage to the Ford car and with full power to collect any loss under the policy from the defendant, just as he, Armstrong, could do. A copy of this power of attorney is attached to and made a part of the petition. At the time this Ford car was destroyed on October 10, 1957, Ralph Armstrong was indebted to the Nalley Discount Company in the sum of $193.80 as evidenced by a conditional-sale contract dated April 20, 1957, wherein he had conveyed title to this car to Nalley Discount Company, and the defendant attempted to cancel the said insurance policy by mailing a notice of cancellation to Ralph Armstrong at his address, Route 8, Gainesville, by United States mail, such cancellation to become effective September 16, 1957, "however, defendant did not advise plaintiff, Nalley Discount Company, of its intention to cancel the said policy," and "however, same was not received by Ralph Armstrong."
The plaintiffs prayed for judgment against the defendant in the principal sum of $225, together with 25 percent penalty and reasonable attorney's fees and also 8 percent interest to be determined by the court.
The copy of the insurance contract attached to the petition stated that the name of the insured was Ralph Armstrong and that "any loss hereunder is payable as interest may appear to the insured and Nalley Discount Company."
The writing executed by Armstrong to the Nalley Discount Company and attached as an exhibit to the plaintiffs' petition provided, among other things, that "I (we) do appoint and constitute the Nalley Discount Company my (our) due and lawful attorney in fact in case of fire, theft or collision of the said automobile described herein, and in the contract of purchase, and do authorize the said Nalley Discount Company to collect the loss under insurance policy No. 15-09-91 in the Queen Insurance Company, whether by adjustment or suit, to accept payment of any such loss, execute proof of loss, execute release to said insurance company and to apply such collection against this contract, after endorsing any check or draft for me and in my stead, as completely as I myself could do, hereby ratifying each and every act said attorney may do in connection herewith."
The defendant insurance company filed its general and special demurrers to the petition as recast on June 12, 1958, and contended that no cause of action was set out by the petition against it upon which any valid judgment could be rendered; that the petition is brought in the name of Nalley Discount Company, individually, and as attorney in fact for Ralph Armstrong on a contract of insurance with Armstrong; that said petition does not set forth sufficient facts, showing the authority or legal right of the discount company to bring this action in its own name and individually, it not being shown that said company had any title to the insured automobile or interest in same or any claim against it and if so the amount and nature of the claim, and if in writing, no copy of the alleged written instrument is attached; and because the petition is brought in the name of Nalley Discount Company, individually, and as attorney in fact for Ralph Armstrong upon a policy of insurance between the defendant and Armstrong.
The defendant insurance company also demurred to the plaintiffs' petition specially on several grounds, one being that it demurs specially in so far as the petition relates to said discount company as attorney in fact for Armstrong in that there is no legal authority set forth permitting the institution or prosecution of an action by the Nalley Discount Company as attorney in fact for Armstrong. The petition is further specially demurred to on the ground that it shows that there is a nonjoinder of parties plaintiff. The defendant contends that the petition shows upon its face that the suit was brought by said discount company individually and as attorney in fact for Armstrong based on an insurance policy issued by the defendant to Armstrong, and that such action is not brought in the name of Ralph Armstrong, but in the name of said Nalley Discount Company, and Armstrong is not a party to said action and hence there is a nonjoinder of the necessary and essential party, to wit, Ralph Armstrong, in said cause; and further because there is a misjoinder of parties and that the Nalley Discount Company is not a proper party to said cause and it is not shown in the petition that the discount company has any right to the relief sought, but on the contrary the petition shows on its face that if any person is entitled to the relief sought it is Armstrong and not the discount company; that it is not shown anywhere in the pleadings that said discount company has a claim against the defendant insurance company under or incident to the policy sued on; that there is a misjoinder of parties in the said action brought by said discount company, individually, and as attorney in fact for Armstrong, without any facts showing the right of Nalley Discount Company to collect the claim forming the basis of the petition, said petition being based on a contract of insurance between Armstrong and the defendant; that there is no privity of contract alleged between the discount company and the defendant insurance company, and that it is not alleged in the petition of the discount company that the claim under which it is pursuing this action, is as great or greater than the amount sought in the within action. The defendant also demurred specially to certain paragraphs of the petition.
The trial court thereafter on March 30, 1959, rendered the following final order and judgment: "After argument and consideration the demurrers of the defendant filed February 6, 1959, are sustained and plaintiffs' petition, as amended, is dismissed."
It is to this judgment the plaintiffs sued out their bill of exceptions to this court.
Code § 81-304 provides: "A demurrer denies the right to the relief sought, in whole or in part, admitting all properly pleaded allegations in the petition to be true, and is founded either upon the want of jurisdiction in the court, or of right in the petitioner, or upon the nonjoinder or misjoinder of parties or causes of action, or the absence of liability by the defendant to the petitioner. Special defects or omissions in the petition may always be taken advantage of by demurrer; and unless cured by amendment the petition shall be dismissed." A misjoinder or nonjoinder of parties plaintiff or defendant is ground for special demurrer. However, failure to name a necessary or indispensable party leaves the court without jurisdiction. Sowell v. Sowell, 212 Ga. 351 ( 92 S.E.2d 524).
The allegations of said petition, if true, (and the case is in this court on demurrer), would show the defendant insurance company liable to the plaintiffs for the penalty and reasonable counsel fees as provided for in Code § 56-706.
We have read carefully the decisions cited by counsel for the defendant. After studying these decisions we are still of the opinion that (a) since the Nalley Discount Company was shown as an insured under the policy covering the car which was damaged, the interest of Nalley Discount Company being shown in the policy such as it might appear when and if any damage occurred, Nalley Discount Company, the loss payee, should have been notified of the cancellation of the policy; and (b) since Armstrong had appointed Nalley Discount Company his due and lawful attorney in fact, the notice of cancellation should have been sent to the Nalley Discount Company as well as to Armstrong. There is nothing in any of the cases cited by counsel for the insurance company to contravene this contention. It follows that the policy was in force on October 10, 1957, when the damage was caused by the accident covered by the policy. The following cases cited by the insurance company are not applicable to the case at bar: Genone v. Citizens Ins. Co. of N. J., 207 Ga. 83 ( 60 S.E.2d 125); Southern States Fire c. Ins. Co. v. Napier, 22 Ga. App. 361 ( 96 S.E. 15); Sheppard v. State, 26 Ga. App. 241 ( 105 S.E. 736); and Saint Paul Fire c. Ins. Co. v. C.I.T. Corp., 55 Ga. App. 101 ( 189 S.E. 390). Counsel for the insurance company has failed to differentiate the cases cited by counsel for the plaintiff sufficiently to prevent those cases from sustaining the position here held, nor do we discern any inapplicability.
The petition as recast was not subject to dismissal on general demurrer, and the court erred in sustaining the general demurrer and dismissing the petition.
Judgment reversed. Townsend and Carlisle, JJ., concur.
ON MOTION FOR REHEARING.
As to the question of whether Nalley Discount Company was a proper party plaintiff to bring this action "individually and as attorney in fact for Ralph Armstrong," the insured, we have discussed somewhat in detail in the original opinion our position that the suit was properly instituted in the name of Nalley Discount Company. The policy was issued April 22, 1957. On October 10, 1957, the car was practically destroyed. On October 11, 1957, the insurance company was notified of the loss. Several days later an adjuster notified Nalley Discount Company that the car was beyond repair and that salvage bids would be secured on the car. It is elementary that when the insurance company took up negotiations with Nalley Discount Company the insurance company thus approved the power of attorney between Armstrong and Nalley Discount Company and further that the insurance company cannot now repudiate that approval and cannot now claim that such agreement between Armstrong and Nalley Discount Company was of no avail. Such would amount to a legal fraud.
The record shows that there was an attempt made to cancel the policy on September 5, 1957, by mailing a notice to Armstrong that the effective cancellation date would be September 16, 1957. It will be noted that as of September 16, 1957, and as of October 10, 1957, the date the car was demolished, there had been no offer to return the unearned insurance premiums to anyone, nor for that matter has there been to the present time. The policy provides: "If the company cancels, earned premium shall be computed pro rata. Premium adjustment may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancellation." Certainly from the time the alleged notice of cancellation was given to the time the suit was returnable to the trial court, i.e., May 23, 1958, is much longer than a reasonable time for the return of the premiums, such elapsed time being approximately eight months. Certainly no one can contend that any tender of earned premiums was offered, "as soon as practicable after cancellation." This court holds, as a matter of law, that the time here involved between the alleged notice of cancellation and the time suit was brought, approximately eight months, does not comply with the policy provision that the unearned premiums be returned "as soon as practicable after cancellation." The conduct of the insurance company in failing to return the unearned premiums as soon "as practicable after cancellation" affirmatively showed that the insurance company waived the notice of cancellation. Therefore, the policy of insurance was not legally cancelled as to Armstrong or as to Nalley Discount Company.
The plaintiff in the instant case is shown on the face of the policy as follows: "Loss Payee. Any loss hereunder is payable as interest may appear to the insured and Nalley Discount Company, Gainesville, Georgia." The record does not show whether the original policy of insurance was in the hands of Armstrong or in the hands of Nalley Discount Company. It is thus evident that Genone v. Citizens Ins. Co. of N. J., 207 Ga. 83, supra, is not contrary to what we are holding. In that case, as here, the return of the unearned premium is a consequence of cancellation and not a condition precedent to cancellation. As stated hereinabove, the instant case shows no attempt to return the unearned premiums at any time.
As to the point regarding the proper party plaintiff, we wish to reiterate that we stand on the original position taken in this case that Nalley Discount Company was a proper party to the suit. The insurance Company, by negotiating with Nalley Discount Company recognized that the Nalley Discount Company was a proper party plaintiff. The insurance carrier cannot accept advantages and refuse to accept the disadvantages involved in a policy of insurance, such as here shown.