Robertson v. Southland Life Insurance

204 S.E.2d 505, 130 Ga. App. 807, 1974 Ga. App. LEXIS 1271

• Court: Court of Appeals of Georgia
• Decided: January 17, 1974
• Docket: 48710
• Status: Published

Opinions

Stolz, Judge.

This is the second appearance of this case in this court. See Robertson v. Southland Life Ins. Co., 127 Ga. App. 143 (192 SE2d 910), in which we held that the defendant insurer, which was defending on the basis of the lapse of the life insurance contract for nonpayment of premium, had failed to carry its burden of proof on summary judgment that it had presented a pre-authorized check to the insured’s bank at the time the premium was due and that it had been returned or that the plaintiff beneficiary had failed or refused to supply pre-authorized checks. The defendant filed a second motion for summary judgment, from the granting of which the plaintiff appeals. Held:

1. Although the insured paid his first premium upon his signing of the application for insurance on April 13,1970, and although the policy provides that there shall be no liability thereunder until delivery of the policy to the insured (which occurred on May 7, 1970), the evidence demanded a finding that the premium in question was due on August 23,1971. The policy was dated April 23,1970, and provides that when it is delivered and paid for, the policy shall be in force from its policy date; that "policy years, months and anniversaries will be determined from the policy date which is the effective date of this policy” (emphasis supplied); that the premium was due as of the annual policy date and thereafter as provided in the policy (monthly). The premiums were paid by the insured monthly on the 23rd day by pre-authorized checks. The policy was effective as of the policy date as a matter of law. See Code Ann. § 56-2429 (Ga. L. 1960, pp. 289, 671).

2. The uncontested showing of the defendant upon the present motion was that it had presented the pre-authorized check to the insured’s bank at the time the premium was due (August 23, 1971); that the check had been dishonored and returned marked "account closed”; that the insured received the defendant’s written notice, dated September 14, 1971, of the dishonored check; that neither the insured nor the plaintiff had ever paid the premium within the grace period or at any time thereafter, either by valid, pre-authorized check or otherwise; and that the insured died on September 25, 1971, after the expiration of the grace period. As to the contention that the affidavits supporting the motion did not affirmatively appear to have been made upon the affiant’s personal knowledge, see Harvey v. C. W. Matthews Contracting Co., Inc., 114 Ga. App. 866 (1) (152 SE2d 809) and cits. The above facts demanded a finding that the policy had lapsed as a matter of law. See Kersh v. Life & Cas. Ins. Co., 109 Ga. App. 793 (2) (137 SE2d 493); Progressive Life Ins. Co. v. Reeves, 89 Ga. App. 900 (81 SE2d 519); Gulf Life Ins. Co. v. Frost, 125 Ga. App. 63, 66 (186 SE2d 456); Bankers Health & Life Ins. Co. v. Crozier, 65 Ga. App. 329 (1) (16 SE2d 65).

3. The plaintiff contends that the policy did not automatically lapse for failure to pay the premium, and that it had to be affirmatively canceled by the defendant insurer by written notice of cancellation under the provisions of Code Ann. § 56-2430 (Ga. L. 1960, pp. 289, 671; 1967, p. 653; 1968, p. 1126).

This contention is without merit. Code Ann. § 56-2430 has no application in this case as it applies only to the cancellation of an insurance policy. The facts in the case show beyond all doubt or question that the insurance policy in issue was not canceled, but simply expired ox lapsed because of nonpayment of premium. Code Ann. § 56-2429 (Ga. L. 1960, pp. 289,671) provides: "A policy of insurance or an annuity or endowment contract shall run from mid-day of the date of the policy or contract, and the time shall be calculated accordingly, if the policy or contract is to be in force for a specified period of time unless the hour and minute of attachment of liability is specified.” As noted in Division 1, the policy date was April 23, 1970, and the premiums were due as of the annual policy date and thereafter as provided in the policy (monthly). Each monthly premium as it was paid extended the life of the insurance policy for an additional premium paying period and continued the grace period in effect. See Code Ann. § 56-2503 (1) (a) (Ga. L. 1960, pp. 289, 677). The failure to make timely payment of the premium, even within the grace period, caused the policy to expire. To hold otherwise would extend indefinitely the grace period for the payment of premium, which by statute is limited to 30 days, unless otherwise provided in the insurance contract, if the insurer does not meet the requirements of "cancellation” provided by Code Ann. § 56-2430, supra. We believe it unreasonable to hold that the General Assembly intended to create such a situation with the enactment of this statute. The statute does not apply, nor was it intended to apply, to the expiration or lapse of an insurance contract (policy) because of failure to pay premium necessary to keep a policy in force according to its terms.

Submitted October 9, 1973 Decided January 17, 1974 Rehearing denied February 8, 1974 Robinson, Buice, Harben & Strickland, Sam S. Harben, Jr., for appellant. Smith, Smith & Frost, R. Wilson Smith, Jr., for appellee.

The defendant’s showing upon the present motion having supplied the deficiencies pointed out by this court on the previous appeal, the trial judge correctly granted summary judgment in favor of the defendant.

Judgment affirmed.

Eberhardt, P. J., concurs. Pannell, J., concurs specially.