Gulf Life Insurance Co. v. Frost

186 S.E.2d 456, 125 Ga. App. 63, 1971 Ga. App. LEXIS 736

• Court: Court of Appeals of Georgia
• Decided: October 14, 1971
• Docket: 46245
• Status: Published

Opinions

Jordan, Presiding Judge.

This is an action against an insurer by the beneficiary of a life insurance policy. The insured died on February 8, 1970, at which time the monthly premium due on January 5, 1970, with a 31-day grace period, had not been paid. The company returned a check which the beneficiary sent on March 14, 1970, in payment of this premium. The insurance company appeals from the denial of a summary judgment. Held:

The controlling issue in the trial court, and here on appeal, is whether the evidence negates as a genuine issue of material fact -a waiver of the express terms of the contract for the payment of premiums so as to warrant a determination that the contract was in effect for the full •benefit, despite the fact that there was no timely payment of the required premium, which the company would not accept after the death of the insured. The waiver theory is one of long standing recognition in the insurance law of this State. See Illinois Life Ins. Co. v. McKay, 6 Ga. App. 285 (64 SE 1131).

The policy here, in the face amount of $5,000, dated November 5, 1968, provided, for the payment of premiums from the policy date on an annual, semi-annual, quarterly, or monthly basis, in advance at the home office or to an authorized agent of the company, with a 31-day grace period for payment, except for the first premium, during which the policy would remain in force, failure to pay any premium when due constituting a "default in premium.” Among other provisions covering the effect of a default in'premium the policy provided that unless surrendered for cash value, and it had no cash value for two years, it "may be reinstated while the insured is living (1) within 31 days after the expiration of the Grace Period of the first premium in default, without evidence of insurability, or (2) at any time thereafter within five years of such default, upon presenting evidence of insurability satisfactory to the company” subject to the payment of overdue premiums and indebtedness, with 6% per annum interest. The premiums were in fact collected by an agent on a monthly basis, who visited the insured at home or at work. There is no evidence of the time of payment of the premium due on December 5, 1968, the first monthly premium after the policy was issued, but the testimony of the agent discloses that the next five payments, January through May, 1969, were received by the company’s district office on or before the due date, and that the next four, June through September, 1969, were received within the grace period. The remaining three payments, October through December, 1969, were each received within the 31-day period after grace, on November 13, 1969, December 12, 1969, and January 8, 1970, and while the actual date of each payment is not shown, the agent testified that the payment received in the district office on January 8, 1970, was paid to him within the grace period.

The affidavit of the plaintiff beneficiary merely states that "[o]n certain occasions during the life of the policy, Hutto [the agent] called for said premium after the grace period, and same was accepted by the company.” This generalized assertion takes on meaning only with respect to the premium due on October 5, 1969, which the district office received on November 13, 1969, the premium due on November 5, 1969, which the district office received on December 12, 1969, and the premium due on December 5, 1969, and as to these premiums only because of the possibility that the agent could have collected them out of grace, having retained no record of the exact date of payment. But giving the plaintiff beneficiary the benefit of any doubt, these three premiums were obviously paid within the allowable 31-day period after "default in premium” upon expiration of the grace period, and thus come within what appears to be a virtually automatic reinstatement provision of the policy, even if "default in premium” lapsed the policy, upon payment of premium and indebtedness with interest at 6% per annum. Under the facts here shown, if the three payments were in fact made after grace the most the company waived, within the express provisions of the policy, was a negligible amount of interest at 6% per annum on each monthly premium of $22.31, which in our opinion in no way discloses a course of action to show a genuine issue of fact with respect to a waiver of the timely payment of premiums to cover the insured at the time of his death on February 8, 1970, while in "default of premium” with respect to the premium due on or bef&re January 5, 1970, but which could have been paid within 31 days thereafter for continuous coverage. Not only was timely payment of premiums of the essence of the contract, but the contract further provided that only the president, a vice president or secretary had authority to waive, change, or alter any of the terms or conditions of the policy, and then only in writing. Moreover, this court has held that the late payment of "two or three” premiums is insufficient evidence to show a custom of the insurer that would constitute a waiver of the provisions of the policy in the respect to a lapse for failure to pay premiums. Gulf Life Ins. Co. a. Yearta, 63 Ga. App. 43 (10 SE2d 120).

Argued June 2, 1971 Decided October 14, 1971 Rehearing denied November 19, 1971.

The remaining assertions of the plaintiff in her affidavit are without merit to preserve a genuine issue of fact to afford any legal basis to authorize a determination that the insurance company had waived the express provision of the policy. It was the responsibility of the insured to pay the premiums when due to keep the policy in force, and even if he did rely on the agent to keep him informed, it is clear that the agent did solicit payment in time to keep the insurance in force, and that the insured elected to make payment only on another policy.

The policy having lapsed for failure to pay premiums at the time of death, and no evidence appearing to disclose a genuine issue of fact as to waiver, the trial judge erred in refusing to grant summary judgment for the insurance company. See Sovereign Camp W.O.W. v. Hart, 187 Ga. 304 (200 SE 296); Rome Industrial Ins. Co. v. Eidson, 138 Ga. 592 (75 SE 657); Hutson v. Prudential Ins. Co., 122 Ga. 847 (50 SE 1000); Illinois Life Ins. Co. v. McKay, 6 Ga. App. 285, supra; The Praetorians v. Cowart, 50 Ga. App. 124 (177 SE 89); Gulf Life Ins. Co. v. Yearta, 63 Ga. App. 43, supra; Locomotive Engineers’ Mutual Life &c. Ins. Assn. v. Bobo, 8 Ga. App. 149, 156 (68 SE 842).

Judgment reversed.

Bell, C. J., Hall, P. J., Eberhardt, Pannell, Deen and Quillian, JJ., concur. Evans, J., dissents. Whitman, J., not participating because of illness. Ed G. Barham, for appellant. Coleman, Blackburn, Kitchens & Bright, J. Converse Bright, for appellee.