# Petition for Writ of Certiorari — Burks v. Colonial Life & Accident Insurance

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1952
- **Citation:** 343 U.S. 915

## Text

IN THE SUPREME COURT OF THE
UNITED STATES

TERM, 1952

MRS. PAULINE R. BURKS
Petitioner
q v5.
» COLONIAL LIFE & ACCIDENT INSURANCE
: COMPANY OF COLUMBIA, SOUTH
CAROLINA

Respondent
PETITION FOR WRIT OF CERTIORARI

Bs the Honorable Chief Jusice and dhe Associate Justlons
3 of the Supreme Court of the United States:

: Mrs. Pauline R. Burks respectfully petitions that writ
Mf certiorari may issue to the United States Court of Ap-
leals for the Fifth Circuit to bring up the record from and
jo Teview the judgment of that court in the case of Mrs.
Pauline R. Burks, Appellant, vs. Colonial Life & Accident
urance Company of Columbia, South Carolina, Appel-
, No. 13713, and that said judgment may be reviewed
i reversed; and in support of this petition respectfully

STATEMENT OF JURISDICTION AND
oe ee QUESTION INVOLVED

E ‘This is a civil case and this Court has jurisdiction to
= in this petition and grant the writ of certiorari to
he United States Court of Appeals for the Fifth Circuit
under Section 1254 (1), Title 28, United States Code An-

(1)

- The judgment sought to be reviewed and reversed is
dated November $0, 1951, and this petition is submitted
within the nimety-day period prescribed by Section 2101
(c), Title 28, United States Code Annotated.

The District Court granted the motion of the insurance
company for summary judgment on all four counts of the
petition, and the Circuit Court of Appeals affirmed the
District Court. Both of such opinions are set forth at pages
138-145 of the certified Record from the Fifth Circuit
Court of Appeals which accompanies this petition.

The law of the State of Georgia prevails in this case. If
there is no Georgia court decision or statutory law con-
trolling the question, then the general law, as determined
by the Federal courts, controls the issues of the case.

With respect to Count III of the petition, both the Dis-
trict Court and the Circuit Court of Appeals rendered a
decision without Georgia precedent, statutory or otherwise,
and undoubtedly contrary to how the courts of Georgia
would decide the issues in the light of general Georgia law.
Neither Federal court cited or applied any Georgia law
in the decisions on this count. The decision of the Cir-
cuit Court of Appeals for the Fifth Circuit is in direct con-
flict with the following decisions of the Circuit Courts of
Appeals for the Sixth and Seventh Circuits on the same
question: |

American Life Ins. Co. of Alabama vs. Hutcheson,
109 F, (2d) 424 (6th Cir.) (Certiorari denied 310
U.S. 625; 84. L. Ed. 1397

Behnke et al. vs. Standard Accident Ins. Co. of
Detroit, Michigan, 41 F. (2d) 696 (7th Circuit)

The rule of law controlling this particular count is not »
embraced in the statutory law of Georgia and has never

“Gest pewed upon by the cour of George so far as is ascer-

“tainable, and, therefore, the general law controls this count
- of the petition.

_ This is not a case where there is a conflict in the deci-
“tions of the Circuit Courts of Appeals because of a con-

flict in the law of the respective states involved in the dif-

ferent circuits. There is no Georgia law sustaining the de-

: -tision of the Fifth Circuit Court of Appeals with respect to
Count III, although there is some Georgia law indicating
to the contrary of such decision.

Moreover, the decision of the Circuit Court of Appeals
for the Fifth Circuit with respect to the other three counts
of the petition, decided important questions of local law
applicable in Georgia, undoubtedly, we believe, in a man-

ner in conflict with applicable Georgia court decisions.

To secure uniformity of decisions among the Circuit
Courts of Appeals, certiorari was granted by this Court in:

Magnum Import Co. vs. Coty, 262 U.S. 159, 163;
67 L. Ed. 922, 924

Ruhlin vs. New York Life Ins, Co., 304 U.S. 202,
82 L. Ed. 1290

This Court has never passed upon the question of law
presented in Count III of the petition so far as can be
ascertained. However, this Court did deny certiorari in
the case of American Life Ins. Co. of Alabama vs..Hutche-

_ son, supra, in which the decision is in direct conflict with
the decision of the Circuit Court of Appeals for the Fifth
Circuit in this case.

The Fifth Circuit Court of Appeals in this case decided
_ important questions of local Georgia law in a manner, we
believe, in conflict with applicable local Georgia decisions,

4

justifying the grant of certiorari as contemplated by Rule
$8, Par. 5 (b) of this Court.

In addition to the foregoing, the questions involved are
substantial, in that this case involves a life and accident
insurance company of the State of South Carolina carrying
on interstate commerce in the State of Georgia, by and
through its general agent for the State of Georgia, in insur-
ing the lives of persons in the State of Georgia. The ques-
tions involved. and their correct decision by this Court are
of wide public interest, and affect property rights through- ©
out the United States.

SUMMARY STATEMENT OF THE MATTER
INVOLVED

Petitioner, a resident of the State of Georgia, initially
brought her petition in three counts in the District Court
against Colonial Life & Accident Insurance Company, a
resident of the State of South Carolina.

Because the case terminated solely on the pleadings and
supporting affidavits, on motion for summary judgment,
it will be necessary to set out the allegations of the complaint
in some detail. .

(a)
Count One

This count is based on the right of recovery by plaintiff
on the equitable remedy of specific performa:'<e.

In this count petitioner alleges that one G. C. Pool, of
Macon, Bibb County, Georgia, was the general agent of
the defendant in the State of Georgia, and that all during
the times complained of he was acting within the scope of
his employment and in furtherance of and the prosecution
of the defendant’s business; that the said Pool had full and }

5

actual authority, as well as apparent authority, to perform
all the acts, statements and agreements set out in the com-
plaint by and on behalf of the defendant.

That on November 15, 1949, the said Pool, acting as
aforesaid, approached David Halsey Burks, the deceased
husband of petitioner, and proposed to the deceased that
he buy an accident policy on his life known as “Executive
and Professional Accident Insurance,” a copy of the same
being attached to the complaint as Exhibit A (R., pp. 36
and 49. The policy actually attached did not have the
blanks filled in, as page 49 of the Record discloses) ; that
on the same day Pool explained to the deceased that he
could pay the premiums for the policy either annually, for
$116, or monthly, at the rate of $10 per month; and that
the monthly premium payment plan of the company was
as follows: The Company had printed, and Pool exhibited
the same to the deceased, checks entitled “Premium Pay-
ment. “The Executive and Professional Accident Policy,’ ”
in the amount of $10 each, payable to the defendant com-
pany, with the only blanks at all being the date thereof,
the name and address of the drawee bank and the signature
of the drawer.

That on November 15, 1949, the said deceased accepted
the proposal of the said Pool and accepted the monthly plan
of premium payment and signed twelve of the $10 checks
and gave them to the said Pool, said checks being drawn
on the joint bank account and joint funds of the deceased
and petitioner and both their names being signed thereto.
A copy of such a check, executed by petitioner and the de-
ceased and payable to the defendant, is attached to the com-
plaint as Exhibit B. (R., p. 37.)

One of the checks was then and there, on November 15,
1949, filled out and completed by the said Pool, as follows:
Dated November 15, 1949, drawn on the Commercial

Bank & Trust Company, Griffin, Georgia, the name of the _
bank where petitioner and deceased had their joint funds;
and that the said Pool agreed then and there that said check
so filled out was payment of the premium on said policy for —
the period November 15, 1949, to December 15, 1949. |

That on said date the form attached to the complaint and _
marked Exhibit C (R., p. $8) was filled out by the said _
Pool and signed by the deceased at the request of the said
Pool, who stated that the same was a formality required by
the defendant company. That said form attached as
Exhibit C was entitled “Application for Accident Insur- —
ance Policy,” was not attached to the policy that was issued |
on the life of the deceased; and if a policy on the life of the —
deceased had not been executed and issued, then said form
would not have been attached to said policy, had it been
issued, and therefore, under the law of Georgia, nothing —
in the “application” could be used as a defense to the ©
suit; neither was any application attached to the type policy —
herein involved that was issued on the life of any other
assured by the defendant; and it was not the policy, prac-
tice or custom of the defendant to attach the same to any
such policy of any assured; and, therefore, neither the
plaintiff nor her deceased husband is bound by any recitals
contained in said form, because it was not, nor would have
been, attached to the policy of insurance issued or to be
issued on the life of the deceased; and, therefore, was not a

part of the policy.

That all of said twelve checks, signed by both the peti-
tioner and the deceased, were forwarded to the home office
of the defendant in Columbia, South Carolina, and received
by the defendant on or about November 18, 1949, and
accepted and retained by the defendant.

7.

That after the delivery to the said Pool of the said twelve
checks, signed jointly by petitioner and the deceased, the

7

_ remaining eleven were filled out by the defendant and dated
monthly, beginning with December 15, 1949, and ending
with October 15, 1950, and with the bank of deceased and
petitioner filled in, that is, the Commercial Bank & Trust
Company, Griffin, Georgia.

That petitioner is the widow of the deceased and was
named as beneficiary in said policy.

That on November 15, 1949, the said Pool advised the
deceased, at the time of acceptance of said proposal of insur-
ance, that if the home office cashed his check dated No-
vember 15, 1949, it would mean the company had accepted
him and his policy would be forthcoming and would be
dated November 15, 1949; and petitioner alleges that this
was the general practice and custom of the defendant.

That on November 26, 1949, the defendant company, at
its home office in Columbia, South Carolina, unqualifiedly
and unconditionally, and without reservation or restriction
thereon, cashed said check dated November 15, 1949, by de-
posting the same into the general funds and into the gen-
eral treasury of the defendant company; that said check
was then transmitted in the usual course of banking busi-
ness, cleared, perforated and paid, and so marked by the
Commercial Bank & Trust Company of Griffin, Georgia,
on November 30, 1949; and the petitioner’s and the de-
ceased’s account and funds therein were reduced according-
ly on such date.

Prior to his death the deceased ascertained that said
check had been so cashed and paid, and was thereby assured
that he was covered and protected by said policy.

That the deceased contemplated obtaining other insur-
ance to protect his life against the risk covered by said poli-
ty of the defendant in the event he was not accepted by

defendant, but when he ascertained that defendant had
accepted him by cashing his said check, he was assured
that he was covered against such a risk and forewent ob. -
taining other insurance.

That the defendant, in addition to cashing said check
of November 15, 1949, as aforesaid, accepted the other
eleven checks as payment of said premium in advance, for
the period December 15, 1949, to and including November
14, 1950.

That the deceased was killed on the evening of Decem-
ber 3, 1949, by accidental means, within the meaning of
his policy and under Section 2 thereof and, therefore, the
company is liable for the amount set forth therein, to-wit:
$12,500.

That it was the intention and agreement of the parties
that the said policy when issued would take effect as of
November 15, 1949.

That by accepting said twelve checks and cashing the
one dated November 15, 1949, the defendant company.
as stated and agreed by the said Pool, confirmed and rati-
fied the agreement of the said Pool, and, as a matter of
law as well as a matter of fact, accepted the deceased for such
policy as set forth in Exhibit A, and became obligated to
issue and deliver to said deceased such a policy.

That, as a matter of law, in the absence of any agreement
or intention, the law would imply the insurance policy,
when issued, to be effective on November 26, 1949, the
date defendant cashed said check, as aforesaid; and that
said policy and contract of insurance was in effect and exist-
ing on December 3, 1949, when the deceased met his acci-
dental death, by the intention of the parties and as a matter
of law.

That the deceased had done and accomplished all that
was required of him to do in the premises to effectuate said
insurance; and that the defendant company had in fact
executed and issued the policy prior to the death of the
deceased, or if it had not executed and issued the policy, :
it had done all the acts and functions necessary to the issu-
ance of the policy, and all that was left to be done by it was :
the ministerial function of filling in the blanks in the form
of a policy, a copy of which is attached as Exhibit A to the
complaint; and that the defendant had many such blank
forms. ;

That the defendant company had in fact executed and
issued a policy prior to the death of the deceased; or, if it
had not, it would have thereafter done so had death not
ensued when it did.

That by its conduct and acts, as set forth hereinbefore,
the defendant company is estopped to deny the execution
and issuance of said policy, and defendant has waived any re-
quirement that the policy be executed, issued or delivered
during the life and sound health of the deceased.

That it would be a fraud upon petitioner and her de-
ceased husband to permit the defendant company to appro-
priate and convert to its own use said funds, as it did when
it cashed said check dated November 15, 1949, and not be
responsible and liable to her for the amounts sued for.

That petitioner is entitled to a decree of specific per-
formance and have the court, under its equitable powers
and jurisdiction, consider “that done which should have
been done,” and decree the policy, as attached as Exhibit
A, as executed, issued and delivered and of full force and
effect on the life of said deceased at the time of his death,
and have the court award judgment against said defendant,
based on said policy, in the amount sued for.

10 |

That proof of claim and demand was made on defendant
company by petitioner and denied, and the failure to pay
the same was in bad faith under the Georgia law, entitling
petitioner to the statutory penalty and attorney's fees.

The prayer for specific performance was “That this court
declare, adjudge and decree the ‘Executive and Profes-
sional Accident policy,’ copy of which is hereto attached
and marked ‘Exihit A,’ to have been consummated on the
life of David Halsey Burks prior to his death on December
3, 1949, and of full force and effect on the said David
Halsey Burks prior to and at the time of his death.”

(b)
Count Two

This count is grounded on the legal remedy of breach
of promise to insure and damages therefor.

This count alleges the identical facts as set forth in
Count One, with the additional allegations:

That by virtue of the alleged foregoing facts (the same
as set forth in Count One hereinbefore) , defendant became
obligated under said intention and agreement to deliver
to said deceased said policy, dated November 15, 1949, to
be effective as of November 15, 1949, and having failed
to do so, breached its said obligation and agreement, and is
responsible in damages therefor to petitioner.

That by virtue of the foregoing, the defendant company
became obligated under the law to deliver to said deceased
said policy, dated November 26, 1949, the date it cashed
said check and converted the funds derived therefrom to
defendant’s own use, and having failed to do so, has
breached its said obligation and is responsible in damages
therefor to the petitioner.

ll
The prayer was for $12,500 damages and attorney’s fees.

(c)
Count Three

This count is grounded on negligence of the defendant
for unreasonable delay and failure to execute and deliver
the policy for an unreasonable time, or for unreasonable
delay and failure to notify plaintiff or her deceased hus-
band of a rejection, if such was the case, so that insurance
to cover the same risk could be obtained elsewhere, as was
contemplated in the event of a rejection.

This count likewise sets forth the same allegations as
Count One, with the additional allegations:

That neither she nor the deceased was notified by the
defendant that said policy was not in force prior to Decem-
ber 3, 1949.

That, under the circumstances, a reasonable time had
expired prior to December 3, 1949, for defendant to notify
the deceased that he was not accepted, if such were the
fact. That the defendant company gave every indication
that the deceased had been accepted and was insured prior
to his death, and led the deceased and petitioner to believe
that the deceased was accepted and that the policy was of
full force and effect prior to the death of the deceased.

That the defendant was negligent in not notifying de-
ceased within a reasonable time that he was not accepted
for said policy, if such were the case, and that the defend-
ant company had ample time between November }5 and
December 3 to so notify the deceased or plaintiff.

That the defendant company was negligent in failing to
notify the deceased that he was not covered by said policy

12

prior to his death, so that he could have acquired other —
insurance to protect him against the risk.

The specifications of negligence were that the defendant

was negligent:

(a) In failing to give notice within a reasonable
time and before the expiration of a reasonable time
that the policy was not of force on the life of said de-
ceased.

“(b) In giving the impression, by the statement of
its agent and by the acts and conduct of its agent and the

_ defendant itself, as aforesaid, at its home office, that

said policy was of full force and effect.

“(c) In giving the impression that said policy was
of full force and effect, by accepting said twelve checks
and cashing the one of November 15, 1949, as a fore-
said, and appropriating to its own use the funds de-
rived therefrom.

“(d) In failing to notify said deceased within a
reasonable time that the insurance involved was not
in force, so that he could have bought insurance to
protect against the same risk elsewhere.

“(e) In not delivering to said deceased said policy
prior to the death of the deceased, which would be of
full force and effect and binding on the defendant at
the time of the death of the deceased.

“(f) In advising deceased, by and through its duly
authorized agent, that if said check of November
15, 1949, were cashed by the home office, then said |
policy would be of full force and effect from the date
of the check, and then not delivering said policy ac-
cordingly.”

1
(@) |
Count Four (Added by Amendment)

This count is based on the legal remedy of reformation
and was filed as an amendment to petitioner's original com-
plaint, when it was first ascertained that the defendant
company admitted accepting the deceased for a policy and
had actually issued and executed a policy on December 5,
1949, the same as the one sued on. This information was ob-
tained in response to petitioner's notice to produce after
the filing of the 3 count petition.

The allegations of this count are practically identical with
the allegations in Count One, with the allegations adjusted
to the fact that a policy of insurance was actually executed
and issued by the defendant company and dated December
5, 1949, and set forth other facts, admitted by the defend-
ant in its response to petitioners’ notice to produce as fol-
lows:

(1) That the “Application for Accident Insurance Poli-
cy” attached to plaintiff's complaint as Exhibit C was re-
ceived at the defendant's home office on November 21,
1949. (R. pp. 83, 84.)

(2) That the application (R., 83,84) was uncondition-
‘ally and unqualifiedly accepted in writing by the company
on November 30 or December 1, 1949 (R., p 76)

(3) That the exhibit attached to the affidavit marked
“Exhibit 1-A,” was a carbon paper impression made from
making out the envelope “in which the policy would have
been mailed to Mr. Burks had his death not intervened.”

(R., p. 87)

(4) That the policy sued on was actually issued and
executed on December 5, 1949, but was not delivered to

14

the deceased because the company on December 5, 1949,
learned of his death. (R., p. 87)

(5) An identical copy of the policy the defendant com-
pany actually executed and issued (R., p. 49), which the
company dated December 5, 1949.

(6) That the policy issued and dated December 5, 1949,
was the policy applied for; it did not have attached to it
the application and had no provision at all referring to
issuance or delivery as a condition precedent to its becom-
ing effective and binding; and that had the policy been
issued on November 30 or December 1, 1949, the date of
the acceptance of the application, the application would
not have been attached, nor would the policy have had
in it any provision requiring issuance or delivery during the
lifetime of the applicant. (R., p. 88)

This count further alleges:

That under the facts hereinbefore set out, and under the
law in such cases, the effective date of said policy and the
date the deceased became insured thereby was November
15, 1949, as stipulated, fixed and agreed by the said Pool;
and by virtue of the acceptance of said application and cash-
ing of said check, said policy should be so reformed, and
petitioner should have judgment on said policy as herein
prayed; or the effective date of said policy, and the date
the deceased became insured thereby, be established not
later than December 1, 1949, the date said application was
unconditionally accepted by the defendant, the defendant
having theretofore cashed the check of November 15, 1949.

That after the acceptance of said application, which was
admitted to be not later than December 1, 1949, the only
remaining act the defendant had to do to execute and issue
said policy was to have a clerk or stenographer fill in
approximately eleven blanks on its printed form, all of
which were ministerial acts.

- ‘

S
s

That defendant had on said date of acceptance of the
application, not later than December 1, many blank forms
of said policy, and it was the company's practice and pro- .
cedure, after the acceptance of an application, to forthwith
and without further acts or doings have said blanks filled
in said policy and immediately mailed to the insured.

That such policy actually executed and issued did not
have the application attached to it, and, consequently, no
part of the application is concerned herein, and no limita-
tion, restriction or provision set forth in the application
may be used in evidence or otherwise by the defendant
herein as a defense to this count.

That said policy should be reformed so that its effective
date will read, and said policy be declared, in full force and
effect as insuring the life of the deceased on one of the fol-
lowing dates: November 15, 1949, or December 1, 1949.

The prayer for reformation was:

“That said policy of insurance dated December 5,
1949, be reformed so that the effective date thereof
will be either November 15, 1949, or November 30,
or December |, 1949, and said policy be declared and
adjudged in full force and effect on the life of the
deceased at the time of his death, on December 3,
1949.”

Judgment in the sum of $12,500, as provided in said
policy, was prayed for, together with statutory penalty and
attorney's fees.

WHY THIS COURT SHOULD EXERCISE ITS
JURISDICTION TO GRANT CERTIORARI

Statutory Provision Conferring Jurisdiction

Section 1254 (1), Title 28, U. S. Code Annotated,

a
16

establishes the jurisdiction of this Court to grant the writ
of certiorari to the Fifth Circuit Court of Appeals.

Grant of Writ Because of Conflict of Decisions
Among the Circuit Courts of Appeals

A decision of one Circuit Court of Appeals in conflict
with the decision of another Circuit Court of Appeals on
the same matter presents a special and important reason for
the grant of the writ, so that uniformity of decisions among
the Circuit Courts of Appeals may be secured.

Supreme Court Rule 38, Par. 5 (b)
Magnum Import Co. vs. Coty, supra
Ruhlin vs. New York Life Ins. Co., supra

Grant of Writ Because Decision of F ifth Circuit Court
of Appeals Decided an Important Question of Local
Law in Conflict with Applicable Local Decisions

A decision of the Circuit Court of Appeals on important
questions of local law in a way probably in conflict with
applicable local decisions is another special and important
reason which will be considered by this Court on petition
for writ of certiorari.

Supreme Court Rule 38, Par. 5 (b)

Petitioner contends the decision of the Court of Appeals
for the Fifth Circuit is in conflict with decisions of other
Circuit Courts of Appeals on the same matter and decides

questions of local Georgia law probably in conflict with
applicable local Georgia decisions.

THE QUESTIONS PRESENTED AND REASONS
RELIED ON FOR ALLOWANCE OF WRIT

The Questions Presented
In dealing with the entire case and all four counts of

17

the petition, the Circuit Court of Appeals stated:

“Upon our consideration of the claims of error
urged upon this appeal our conclusions both as to
the controlling issues involved in Counts I, Il and IV
of the complaint, and as to the decisions of the Court
of Appeals and the Supreme Court of Georgia which
in point and principle control the decisions of such
issues adversely to the contentions of the appellant co-
incide in all material respects with those expressed
by the Trial Court. There is consequently no necessity
for any other or further exposition why the judgment
of the trial Court upon these counts is correct. How-
ever, as to that portion of the opinion discussing the
ruling upon the merits of the Third Count of the
petition we refrain from any expression of approval
or disapproval, since we find this to be
in the present case. The allegations of this count of thé
complaint, together with the facts, when considered in -
the light of the law already held properly applicable to
the transaction now under review, are necessarily con-
fined in material substance to the claim of negligence
in failing to act with reasonable promptness in either
accepting or rejecting the application and in notify-
ing the plaintiff of its action. While we fully recognize
and give obedience to the fundamental principal that
the existence of negligence and the determination of
what constitutes a ‘reasonable time’ are generally for
determination as questions of fact upon consideration
of pertinent circumstances, we are nevertheless of the
firm opinion that under the precise facts and circum-
stances of this case a finding of negligence based upon
reasonable delay would not be legally supportable.
The minds of reasonable men could not differ on these
facts. We are therefore not required to determine, or
to express it more accurately, declare, the law of Geor-
gia which would be applicable if a factual basis for such

18

finding existed. The Georgia Courts do not appear to |

have passed upon the question and, since we find at
the beginning of our consideration of it the existence
of an insurmountable bar to any recovery by the com-
plainant a discussion of the legal merits, otherwise, of
this claim could be only academic.” (Emphasis sup-
plied.)

The first. question presented is whether the Circuit
Court of Appeals after conceding there was no applicable
Georgia precedent concerning Count III (unreasonable
delay count), was correct in holding that “The minds of
reasonable men could not differ on these facts”; thereby
holding that this count presented no factual issue for a
jury to pass upon. This holding is in direct conflict with
two Circuit Courts of Appeals decisions mentioned hereto-
fore, and in direct conflict with numerous other state court
. decisions on the same question. It is believed by petitioner
that the “insurmountable bar” referred to by the Fifth
Circuit Court of Appeals has no bearing whatsoever on this
count.

The “insurmountable bar” referred to could only be
that portion of the application (R. p. 39) which states:

“I further agree that this insurance shall not be
in force until the application is accepted and policy
issued by the company nor until policy is delivered to
and accepted by the applicant while in sound health
and free from injury.”

Because no policy of insurance was actually issued and
delivered to and accepted by the deceased while in life, the
Fifth Circuit Court of Appeals, in adopting the trial court's
decision with respect thereto, held that Counts I, II and
IV were without merit.

Means

19

_. ‘The second question is whether the Fifth Circuit Court
_ of Appeals in so holding decided this phase of the case
contrary to applicable Georgia State court decisions.

Reasons Relied On For Allowance of Writ

With respect to Count III, the Fifth Circuit Court of
Appeals did not express “approval or disapproval” of the
District Court’s decision. In conceding there was no Geor-
gia law or decision on the question involved, the Circuit
Court of Appeals did not attempt to ascertain what the
Georgia courts might hold on the facts presented, as this
Court held was vital in Ruhlin us. New York Life Insur-
ance Co., supra. The Circuit Court of Appeals determined
this count contrary to decisions of two other Circuit Courts
of Appeals and contrary to many decisions of numerous
state courts. The Circuit Court of Appeals unquestionably
was influenced in its determination of this count by the
“insurmountable bar’ referred to in its opinion, which
was undoubtedly the above-quoted part from the applica-
tion (R. p. 39) ; whereas, the law appears conclusively to be
that the provision in an application requiring delivery of
the policy during life and sound health of the applicant
places an additional burden on the insurance company not
to unreasonably delay the processing of the application,
and certainly can be no defense to this count.

It is contended the Circuit Court of Appeals’ decision
on this count is contrary to the decision thereon that would
be rendered by the Georgia courts.

It was admitted that:

(1) The application was unconditionally accepted two
days before the applicant's death. (R., p. 76)

(2) The applicant’s check for the first premium was
cashed approximately a week before his death, and the

proceeds thereof covered into its general treasury by the
defendant (R., p. 84).

(3) Because of the procedural routine in the defend-
ant’s policy-issuing office, no policy was actually issued
until two days after the death of the deceased. (R., p. 84)

(4) The policy actually issued two days after the death
of the applicant, did not have attached to it the application,
nor did the policy itself have any provision such as con-
tained in the application to the effect that delivery and ac-
ceptance was necessary; and that had the policy been issued
prior to the death of the applicant, the application would
not have been attached, and the policy itself would have
contained no provision requiring delivery or acceptance.

(R., p. 88.)

Petitioner feels confident that under the law of Georgia
and the admitted facts above set forth, the Circuit Court
of Appeals erred in its judgment on Counts I, II and IV.

Petitioner respectfully submits that the law of Georgia
is that no delivery or acceptance of a policy is required
unless so provided in the contract; and that no application,
nor any part thereof, which is not attached to the policy
may be used in defense of any action in any controversy
between the parties to or interested in the policy; and that
such a non-attached application can never be considered as
a part of the policy or contract between the parties.

Petitioner contends that under the law of Georgia, where
the application was unconditionally accepted two days prior
to the applicant’s death, and since there was nothing more
for the applicant to do to effectuate the binding force of the
contract, and since nothing remained for the insurance
company to do except to fill in blanks on its policy form
and countersign the policy and mail the policy to applicant

(and since the application would not have been attached
to the policy if issued and executed when the application
was approved, two days prior to the applicant's death) ,
petitioner is entitled to have the contract specifically per-
formed and declared of force and effect the date of the
unconditional approval of the application, two days prior
to her husband's death, with the application unattached.

seseaidinttliataaiaeataiiead
, :

Petitioner also contends, under these facts and the Geor-
gia law, that she is entitled to have the policy, which was
actually executed issued and dated two days subsequent
to her husband’s death, reformed and declared dated and
of full force and effect the date the application was uncon-
ditionally accepted, two days prior to her husband's death.

Petitioner contends that if the defendant company could
cash and cover into its general treasury one of the twelve
monthly premium checks accepted by it from the applicant,
approve the application and delay the issuance of the policy
for four days, and not be liable for death ensuing two days
prior to the issuance of the policy, but two days subsequent
to the unconditional acceptance of the risk, then the de-
fendant company could have cashed all twelve premium
checks and delayed the issuance of the policy for 365 days,
though the application was unconditionally approved ap-
proximately a week after the cashing of the first check, and
not be liable for death ensuing two days before the expira-
tion of the $65 days. The principle, in law, is the same for
four days or 365 days.

It is also respectfully contended that the Circuit Court
of Appeals erred in its judgment with respect to Counts
I, II and IV in deciding that the facts set forth therein did
not present a jury question under the law of Georgia, with
respect to the following matters:

(1) Whether the defendant company waived the pro-

a,
22

visions of issuance and delivery of policy required in the
application by its own acts and the acts and oral agree-
ments of its General Agent for the State of Georgia.

(2) Whether the defendant was estopped from urging
the defense based on such provisions of the application be-
cause of the acts and oral agreements and knowledge of its
General Agent and because of its own acts.

This petition is accompanied by a certified transcript
of the record in the Circuit Court of Appeals for the Fifth
Circuit, including the proceedings in that court in this
matter, and ten additional copies thereof. A supporting
brief follows hereafter.

WHEREFORE, Petitioner prays that a writ of certio-
rari be issued and directed to the United States Court of
Appeals for the Fifth Circuit to bring up the record in this
case, and that the decision of that court be reviewed and

reversed.
This ____. day of February, 1952.
Respectfully submitted,
Joun J. Frynt, Jr.
P. O. Box 103
Griffin, Georgia

WALLACE MILLER, JR.
515 Persons Building
Macon, Georgia

Miter, MILLER & MILLER
515 Persons Building Attorneys for Petitioner
Macon, Georgia

IN THE SUPREME COURT OF THE
UNITED STATES

No

MRS. PAULINE R. BURKS

Petitioner

COLONIAL LIFE & ACCIDENT INSURANCE
COMPANY OF COLUMBIA, SOUTH
CAROLINA

Respondent

Brief in Support of Petition for
Certiorari

‘SUBJECT INDEX

Preliminary statement 1
Statement of Jurisdictional Grounds Invoked _...____ 1, 2
Statement of the Case 2, 3
Specification of Assigned Errors Oe
_ Argument and Citation of Authority 6-41
Conclusion 41
CASES CITED
, Page
American Life Ins. Co. of Ala. vs. Hutcheson, 109,
F. oy Pog 29, 34, 36, 38
American Life Ins. Co. of Ala. vs. Stone, 78 Ga. App. 98 16
Armour & Co. vs. Ross & Barfield, 110 Ga. 408 9

Behnke vs. Standard Acc. Ins. Co., 41 F (2d) 696, 699 (7th Cir.) 34
Bankers Life & Casualty Co. vs. Cravey-—Ga.— (unreported) 36
Beswick vs. National Casualty Co. 226 S.W. 1031 _...._._.. 17

Chidester vs. Newark, 58 Fed. Supp. 787 37
Clark vs, National Aid Life Assn. 57 Pac. (2d) 882 17 ©
Clubb vs. The American Accident Co. of Louisville, Ky.

97 Ga. 502 10
Cooper Company vs. State of Ga. 187 Ga. 497, 500 ss 35

DeFord vs. New York Life Ins. Co. 224 Pac. 1049, 1050 __. 35, 86

‘Douglas vs. Mutual Benefit H.& A. Assn. 76 Pac. (2d) 453 36, 38
Fargo G. & P. Co. vs. Globe Corp. 161 F. (2d) 811 (7th Cir.) _. 87

Fi Id vs. Colorado Life Co. 116 S.W. (2d) 242
Ft. Valley Coca-Cola Bottling Co. vs. Lumbermen’s

a

Mutual Ins. Co. 69 Ga. App. 120, 124-125 20
Georgia Masonic Mutual Ins. Co. vs. Gibson, 52 Ga. 640 (3) 15, 30
German-American Life Asso.vs. Farley, 102 Ga. 720, 735 _....._ 9
Gulf Life Ins. Co. vs. Bloodworth 73 Ga. App. 102 27

Hahn National Casualty Co. 136 Pac. (2d) 739
Hornstein vs. Cramer Bros. Freight Lines, 188 F. (2d)

148 (8rd Cir.) 36
Insurance Company vs. Colt, 20 Wall 560, 22 L. Ed. 423... 22
Company vs. McCain, 96 U.S. 84, 86 10
Insurance Company vs. Wilkinson, 80 U.S. 222 ll

Johnson vs. Aetna Ins. Co. 123 Ga. 404, 406, 407, 410 11, 14

Keller ve. Provident Lite & Acc, Ine: Cow 40S2. (2d) 877 38. =

Lea vs. Harris 88 Ga. 236 40

L. & N. Ry. Co. vs. Spinks, 104 Ga. 692 40°
Likenhoger vs. Owens, 181 F. (2d) 97,99 "th Cir.) ————____ 33
Life & Cas. Ins. Co. of Tenn. vs. , 48 Ga. App. 380 (2) 17, 27

Magnum — Co. vs. Coty 262 U.S. 159, 163;

67 L. 922, 924 - 2
Mass, Benefit Life Assn. vs. Robinson, 104 Ga. 256 (2) 32
Mechanics, etc. Ins. Co. vs. Mutual Real Estate Assn. 98 Ga. 262 14
Metropolitan Life Ins. Co. vs. Hale, 177 Ga. 632 15
Mutual Benefit H. & A. Assn. vs. Bell, 49 Ga. App 640, 643 __. 27

National Li Ins. Co. of America vs. Jones, 183 S.E. 443 — 25
New York Life Co. vs. Babcock, 104 Ga. 67 18, 25

Parham vs. National Relief Assurance Co. $3 Ga. App. 59 ____. 3
Payne vs. Watters, et al, 9 Ga. App. 265 (2nd case) ——______ 40
Postal a & Cable Co. vs. Kaler et al, 65 Ga. App. 641 _ 40
Progressive Fire Insurance Co. vs. Morrison, 72 Ga. App.

473, 482 30
Progressive Life Ins. Co. vs, Bohannon, 74 Ga. App. 617 (8) — 9

Rublin vs. New York Life Ins. Co. $04 U.S. 202, 82 L. Ed. 1290 2, 32

Shell Oil Co. vs. Manley, 124 F. Cd) 714 (7th Cir.) ________. 87
Simonton et al vs. Liverpool, Lon

Ga. 76-77
Southern Life Ins. Co. vs. Kempton 56 Ga. 339 (1) _______—. 28
State Mutual Life Assn. vs. Baldwin, 116 Ga. 855, 860 40

on & Globe Ins. Co., 51

State Mutual Life Ins. Co. vs. Forrest, Admrx., 19 Ga.

App. 296 (1)

The st & Suburban Ry. of Savannah vs. Brauss, 70 Ga.

(1)

Tobert vs. Cherokee Ins. Co., 141 Ga. 773 (1)
Travelers Ins. Co. vs. Taliaferro 54 Pac. (2d) 1069

United National Ins. Co. vs. Cody, 81 Ga. App. 527

Wellborn vs. Johnson, 204 Ga. 389
Witten vs. Beacon Life Assn. 33 S.W. (2d) 989

Zephyr American Corp. vs. Bates Mfg. Co. 128 F (2d)
(3rd_ Cir) = a

STATUTES CITED

Sect. 3-108, 1933 Code of Ga. Ann.
Sect. 3-109, 1933 Code of Ga. Ann.
Sect. 4-301, 1933 Code of Ga. Ann.
Sect. 37-106, 1933 Code of Ga. Ann.
Sect. 56-801, Code of Ga. Ann.
Sect. 56-904, Code of Ga. Ann.

TEXTBOOKS CITED
~ $2C.J. Sect. 182, p. 1098

$2CJ. Sect. 196 p. 1107

_ 58 C.J. Sect. 297 p. 1054

_ 44 CJS. Sect. 282, p. 987
e Wi

on Contracts, Revised Ed., Vol. 8, Sects. 747-750.
pp. 2120-2126

IN THE SUPREME COURT OF
THE UNITED STATES

No

MRS. PAULINE R. BURKS
Petitioner
vs.

COLONIAL LIFE & ACCIDENT INSURANCE
COMPANY
Respondent

BRIEF IN SUPPORT OF PETITION FOR
CERTIORARI

PRELIMINARY STATEMENT

This case terminated adversely to petitioner herein in
the District Court for the Middle District of Georgia upon
grant of motion for summary judgment filed by the re-
pondent herein. The United States Circuit Court of Appeals
for the Fifth Circuit affirmed the judgment of the District
Court. The Circuit Court of Appeals’ affirming decision
is reported in the official reports as follows:

Burks vs. Colonial Life & Accident Insurance Co., No.
13713; 192 F. (2d) 648.

STATEMENT OF JURISDICTIONAL GROUNDS
INVOKED

This Court has jurisdiction to grant the writ of certio-
rari applied for in this case.

(1)

7

Sect. 1254 (1), Title 28, U.S.C.A.

Rule of Supreme Court

Rule 38, Par 5 (b) of this Court sets forth that a petition
for writ of certiorari may be considered and granted by this
Court in a case where a Circuit Court of Appeals rendered
a decision in conflict with decisions of other Circuit Courts
of Appeals on the same matter, or where the Circuit Court
of Appeals has decided an important question of local law
in a way probably in conflict with applicable local decisions.

It is respectfully submitted that the Circuit Court of
Appeals for the Fifth Circuit in its decision in this case
rendered a judgment in conflict with that of other Circuit
Courts of Appeals on the same subject matter and decided
important questions of local Georgia law contrary to appli-
cable Georgia decisions.

Decisions of This Court

The following decisions of this Court hold that the grant
of writ of certiorari is proper to secure uniformity of deci-
sions among the Circuit Courts:

Magnum Import Co. vs. Coty, 262 U.S. 159, 163, 67
L. Ed. 922, 924

Ruhlin vs. New York Life Ins. Co., 304 U.S. 202, 82
L. Ed. 1290

STATEMENT OF THE CASE
This case terminated on the plaintiff's petition in the
District Court on grant of motion for summary judgment
and supporting affidavits filed by the defendant therein;

and the Circuit Court of Appeals affirmed the judgment of
the District Court.

For fear of being burdensome, we shall not repeat here

8

the allegations and prayers of the four-count petition nor
the facts set forth in the motion for summary judgment
and supporting affidavits, all of which are set forth in the
attached and foregoing petition for certiorari (Pet. Cert.
pp. 4-15 and pp. 19-20)

SPECIFICATIONS OF ASSIGNED ERRORS

It is respectfully contended that the Circuit Court of
Appeals erred in holding:

As to Count I

(a) That the oral agreements and promises made by
and between the deceased and the company’s General
Agent for the State of Georgia were unenforceable, and
that all such agreements and promises merged into and
were rendered nugatory by the written application.

(b) That the provision of the written application con-
trolled where contradictory to such oral agreements and
promises made by and between the company’s general agent
and the deceased.

(c) That the provision in the application concerning
issuance and delivery of the policy during the life and
sound health of the applicant was not waived, nor was the
defendant estopped from insisting on it as a defense, by
virtue of the oral agreements and promises of its general
agent, his acceptance and retention of twelve premium
payment checks, the later acceptance and retention of the
twelve premium payment checks and the cashing of the
one dated November 15, 1949, by the defendant's home
office, and the unconditional and unqualified acceptance
of the application on December 1, 1949.

(d) That the agreement to insure was not complete
when the offer (the application) was unconditionally and
unqualifiedly accepted on December 1, 1949.

4
fo

(e) That this count set forth no issue for determina-
tion by a jury.

As to Count II

(a) That the oral agreements and promises ma: ".y
and between the deceased and the company’s Geucral
Agent for the State of Georgia were unenforceable, and
that all such agreements and promises merged into and
were rendered nugatory by the written application.

(b) That the provision of the written application con-
trolled where contradictory to such oral agreements and
promises made by and between the company’s general agent
and the deceased.

(c) That the provision in the application concerning
issuance and delivery of the policy during the life and
sound health of the applicant was not waived, nor was the
defendant estopped from insisting on it as a defense, by
virtue of the oral agreements and promises of its general
agent, his acceptance and retention of twelve premium pay-
ment checks, the later acceptance and retention of the
twelve premium payment checks and the cashing of the one
dated November 15, 1949, by the defendant's home office,
and the unconditional and unqualified acceptance of the
application on December 1, 1949.

(d) That the agreement to insure was not complete
when the offer (the application) was unconditionally and
unqualifiedly accepted on December 1, 1949.

(e) That this count set fort!» ao iesce for determination
by a jury.

As to Count Ill

(a) That the requirement of issuance and delivery of
the policy in the application was a bar or was a defense in
any respect to a right of recovery by petitioner.

(b) That, as a matter of law, although questions of
diligence, negligence and what is a “reasonable time” are
generally questions of fact for a jury determination, “minds
of reasonable men could not differ on these facts.”

(c) Indirectly, that the judgment of the District Court
was correct which held that petitioner could not maintain
this count in her own individual name, but if the same was
maintainable at all, it should be brought in the name of
the personal representative of the deceased; and that no
action would lie in the name of the personal representative
of the deceased, because such an action would be personal to
the deceased and died with him.

(d) That this count set forth no issue for a determina-
tion by a jury.

As to Count IV

(a) That the provision in the application requiring
issuance and delivery of the policy during the lifetime and
good health of the applicant was a defense to this count.

(b) That the provision in the application requiring
issuance and delivery of the policy during the lifetime and
sound health of the applicant was a conclusive bar to right
of recovery in this count.

(c) That the ministerial duty of filling in blank spaces
on the policy form after the death of the applicant, pursu-
ant to the official, unqualified and unconditional accept-
ance of the application prior to his death, could not be con-
sidered at all.

(d) That the agreement to insure was not completed
when the offer (application) was unqualifiedly and uncon-
ditionally accepted on December 1, 1949.

(e) That petitioner was not entitled to reformation of
the policy actually issued as prayed for in this count.

6
ARGUMENT

Preliminary Summary

This Court should take jurisdiction of this case and grant
the writ of certiorari because the Circuit Court of Appeals
has decided a very important question of Georgia law which
has never been passed upon by the courts of Georgia, and
the Circuit Court of Appeals has decided such question
without any effort whatsoever on its part to ascertain how
the court of Georgia might decide the question. Moreover,
the Circuit Court of Appeals decided this question con-
trary to decisions of two other Circuit Courts of Appeals
on the same question. This is with respect to Count III of
the petition, and the principal question here is whether the
facts alleged present a factual question of unreasonable
delay on the part of the insurance company in accepting
or rejecting the application of petitioner’s deceased hus-
band and notifying petitioner and her husband accordingly.

With respect to Counts I, II and IV, the Circuit Court
of Appeals decided the questions presented therein con-
trary to applicable Georgia appellate court decisions.

The principal questions in these three counts are:

(a) Did all the oral promises, representations and agree-
ments of the defendant's General Agent for the State of
Georgia merge into the written application? We contend
the answer is no.

(b) Did the facts alleged (assuming them to be true,
as we must on motion for summary judgment) concerning
the promises, representations and agreements of the general
agent of the defendant, the cashing of the first premium
check and the unqualified acceptance of the application by
the defendant company on December 1, 1949, constitute
a waiver of, or estop the defendant company from insisting

ae
7

on, contrary provisions appearing in the written applica-
tion? We contend the answer is yes.

(c)

(1) Did the unqualified acceptance of the applica-
tion on December 1, 1949, disregarding entirely the allega-
tions of oral promises, representations and agreements of
the general agent, together with the prior cashing of the
first premium check, entitle applicant and petitioner on
December 1, 1949, to the policy applied for? We contend
the answer is yes.

(2) If petitioner and her husband were entitled to
the policy on December 1, 1949 (it being admitted that
the application would not have been attached and that no
provision would have been in the policy requiring the issu-
ance or delivery as a condition precedent to the binding
effect of the policy) , was the issuance or delivery necessary
to bind the company for the risk commencing on December
1, 1949? We contend the answer is no.

(3) If petitioner and her husband were entitled to the
policy on December 1, 1949, with no application attached
and with no provisions therein requiring the issuance or de-
livery of the policy as a condition precedent to its binding
effect, is petitioner entitled to have the policy actually is-
sued and dated December 5, 1949, reformed tothe date of
entitlement thereof, that is, December 1, 1949? We contend
the answer is yes.

If our answers to questions (a) or (b) above are correct,
necessarily a factual question is presented, and the Circuit
Court of Appeals erred in holding otherwise.

If our answers to questions (c) (1), (2) and (3) are cor-
rect, it necessarily follows that the Circuit Court of Appeals
erred in its decision and that this Court should not remand

;
i
;
‘
;

oS Oa TEN teres

— lh Nee SES AE OPM ELON OGLE IOI LI EEE DAI flo ne =

PLT ERNE DEH I

the case back to the Circuit Court of Appeals for it to de-
termine for itself how the courts of Georgia would decide
the questions presented in Count III, but this Court should
direct that judgment be rendered in favor of petitioner on
her motion for summary judgment. (R., p. 111)

Counts I, II and IV

We shall present these counts together, for it is believed
that such presentation will dispense with repetitious argu-
ment and citation of authority.

The defendant’s General Agent for the State of Georgia
represented to petitioner’s husband that the written appli-
cation was a formality required by the company. He fur-
ther represented and agreed with petitioner and her hus-
band that if the company cashed their first premium pay-
ment check, the check being signed by both petitioner and
her deceased husband, such check having printed on it
“Premium Payment—The Executive and Professional Pol-
icy”, then the policy would be forthcoming and would be
dated and of force and effect on November 15, 1949, the
date of the first premium check signed by both petitioner
and her husband on their joint banking account. The
check was cashed on November 25, 1949, by the defend-
ant’s home office, and petitioner and her husband ascer-
tained this fact on November 29, 1949, and forewent obtain-
ing other contemplated insurance to cover the same risk.
The husband died as a result of an accident within the pro-
visions of the policy applied for on December 3, 1949.

There was no notice of any limitation of the authority
of the defendant’s general agent in the application, or other-
wise, to petitioner or her husband; and it was alleged that
the general agent had actual as well as apparent authority
to make the representations and agreements on behalf of
and to bind the company therefor.

9

“The agent's authority shall be construed to include
all necessary and usual means of effectually executing
it. Private instructions or limitations not known to
persons dealing with a general agent shall not affect
them.”

Sect. 4-301, 1933 Code of Georgia Annotated

Limitation of authority on the general agent unknown
to persons dealing with them will not bind them.

Armour & Co. vs. Ross & Barfield, 110 Ga. 403

Under the law of Georgia, and under the allegations of
the complaint, General Agent Pool had authority to bind
the company the same as its president, and, consequently,
had authority to bind the company in his agreement with
the deceased as to when the insurance was to become effec-
tive.

“One who solicits insurance, and represents the com-
pany in conducting the negotiations which lead up to
the execution of the contract and subsequently in the
delivery of the contract itself, is the general agent of the
company, with reference to that particular contract.
Relatively to it, he is as much the alter ego of the com-
pany as any other corporate officer.”

German-American Life Assn. vs. Farley, 102 Ga. 720,
735

Progressive Life Ins. Co. vs. Bohannon, 74 Ga. App.
617 (3)

This is the same rule as laid down by this Court as fol-
lows:

‘“‘No company can be allowed to employ another as
its agent and then disavow responsibility for his acts. . .

10

“The law is equally plain, that special instructions —
limiting the authority of a general agent, whose powers
would otherwise be coextensive with the business en-
trusted to him, must be communicated to the party with
whom he deals, or the principal will be bound to the
same extent as though such special instructions were
not given. Were the law otherwise, the door would be
open to the commission of gross frauds. Good faith
requires that the principal should be held by the acts
of one whom he has publicly clothed with apparent au-
thority to bind him.” (Emphasis ours.)

Insurance Co. vs. McCain, 96 U.S. 84, 86

This rule was followed and applied in Lumbermen’s Mu-
tual Ins. vs. Slide Rule Co. (and vice versa), 177 F. (2d) 305
(7th Cir.)

On the authority of an insurance agent “to solicit and for-
ward applications for policies of insurance,” to bind his
company, contrary to his actual authority, on a matter con-
trary to that as written in the application itself, an early
Georgia Supreme Court case, which is still the Georgia law,
held:

“Where soliciting and forwarding applications for
policies of insurance was withinthe scope of the duties
of an agent of an insurance company, and such agent
undertook to prepare for another an application for
insurance and wilfully inserted therein a false answer
to a material question, he will be regarded in so doing
as the agent of the company and not of the applicant,
and the agent’s knowledge of the falsity of the answer
will be imputed to the company.” Clubb us. The Amer-

ican Accident Company of Louisville, Ky. (and vice

versa) 97 Ga. 502

In deciding that case, the Supreme Court of Georgia

ann
Ca

11

followed and quoted at length from the case of Insurance
Co. us. Wilkinson, 80 U.S. 222, part of which follows:

“The agents are stimulated by letters and instruc-
tions to activity in procuring contracts, and the party
who is in this manner induced to take out a policy,
rarely sees or knows anything about the company or
its officers by whom it is issued, but looks to and relies
upon the agent who has persuaded him to effect in-
surance as the full and complete representative of the
company, in all that is said or done in making the
contract. Has he not a right to so regard him? ... . .
But to apply such a doctrine in its full force to the
system of selling policies through agents, which we
have described, would be a snare and a delusion, lead-
ing, as it has done in numerous instances, to the gross-
est frauds, of which the insurance companies receive
the benefits, and the parties supposing themselves in-
sured are the victims.”

No knowledge of any limitation on the authority of the
company’s general agent was brought to the attention of
petitioner or her husband; but even if there had been such
notice or knowledge, the acts and representations of the
defendant's general agent, made before the issuance of the
policy, would, under the law of Georgia, constitute a waiver
of any provision in the application or ,olicy that was to the
contrary, and the company would be estopped to urge the
same as a defense.

This is the often-announced law in Georgia.

“Where a policy of fire insurance contained a stipu-
lation that it should be void ‘if the subject of insurance
be a building on ground not owned by the insured
in fee simple’ but at the time the application for insur-
ance was made the company, through its agent, knew
that the applicant did not own the land on which

12

the building sought to be insured was situated, it will
not be heard, in defense to an action on the policy, to
set up the non-compliance of the plaintiff with this
condition of the contract.

“. . . . It will be seen that the controlling ques-
tion for decision is whether, under the allegations of
the petition as amended, the defendant, by reason of
the knowledge of its agent as to the real character of the
plaintiff's ownership of the property, is estopped to
defend on the ground of the plaintiff's non-compliance,
with the conditions of the contract of insurance,
or whether the plaintiff, by accepting the policy on
those conditions, and with notice of the limitation on
the power of the agent to make a waiver for the com-
pany, is precluded from recovering on the policy.
There is no principle of law more firmly established
than that, in general, the knowledge of an agent as to
a material fact bearing upon the validity of a contract
made on behalf of his principal is imputable to the
principal; and this principle has uniformly been ap-
plied by our courts in actions on contracts of insurance.

. Here the insured made written application for
a policy of fire insurance. Upon being asked the ques-
tion as to the character of his ownership of the prop-
erty, he frankly informed the agent with whom he
was dealing that he owned the building but did not
own the land. There is no intimation in the petition
that the insured was on notice, before receiving the
policy, that the agent had no power to write the insur-
ance with the title to the property held as it was. There
is nothing from which an inference can be drawn that
the agent and the insured colluded to defraud the in-
surance company by concealing the truth as to the
_ ownership of the property. . . .

Sa SIS 3 One of the rules of the company is

13

that insurance will not be issued upon a building situ-
ated on land not owned by applicant. But the com-
pany, through its agent knows that the applicant owns
the building which he wishes to have insured, but does
not own the land on which it is situated and with this
knowledge nevertheless issues a policy on the building.
Certainly, after leading the applicant to believe that
he would be protected, and receiving from him the
premiums charged for the insurance, it should not in
good conscience be heard to set up, in defense to an
action on the policy, that the ownership of the building
and of the land were in different persons. True, the
policy states on its face that no agent has the power to
waive any of the conditions of the policy, and that none
of them will be deemed to have been waived unless
such waiver is attached to or endorsed upon the policy
in writing. But this is not a question of waiver, so much
as of notice and estoppel. The agent’s knowledge, as
has been seen, is the company’s knowledge. In spite of
the assertion in the policy that the contract shall be
void if the ownership of the property is of a given
character, the policy has been issued with notice
to the company that the ownership is of that
character. Regardless of any question of waiver, then,
the company has placed itself in a position where it
would be inequitable to allow it to make the defense
which it seeks. “Waiver is sometimes the express aban-
donment of a right. More frequently it is implied from
acts that are inconsistent with its continued assertion. .
Estoppel ‘is the shield of justice interposed for the pro-
tection of those who have not been wise or strong
enough to protect themselves. It is the special grace
of the court, authorized and permitted to preserve
equities that would otherwise be sacrificed to cunning
and fraud.”

14

Johnson vs. Aetna Insurance Co., 123 Ga. 404, 406, £
407,410 .

This last cited Georgia case reviews practically every case
in Georgia on the subject and announces that the rule in
the following early Georgia case is the proper rule in Geor-
gia, and all decisions to the contrary were overruled.

The early Georgia case so followed held:

“Conditions which enter into the validity of a con-
tract of insurance at its inception may be waived by the
agent and are waived if so intended, although they
remain in the policy when delivered; a limitation
therein upon the authority of the agent to waive such
conditions otherwise than in writing attached to or
endorsed upon the policy are treated as referring to
waivers made subsequently to the issuance of the pol-
icy.”

Mechanics, etc. Ins. Co. vs. Mutual Real Estate, etc.

Assn., 98 Ga. 262

We can see no distinction between the facts in the case
of Johnson vs. Aetna Ins. Co., supra, cited above and the
facts in the instant case. In both cases the agent had knowl-
edge of the full facts. The knowledge of the agent is the
knowledge of the principal, and with this knowledge money
was accepted and the application itself was accepted; and,
therefore, the company has waived, or is estopped to in-
sist on, provisions in the written application that are con-
trary to the agreements and representations made by the
agent.

“Where a member of a mutual insurance company
fails to meet the assessments made upon him, but sub-
sequently transmits to the secretary thereof an amount

15

of money in payment of all dues then demanded of
him, which sum the company retains until after his
death without notifying him whether it was satisfactory
or not, such action was a waiver of the default and
restored him to membership.”

Georgia Masonic Mutual Ins. Co. us. Gibson, 52 Ga.
640 (3)

In a later Georgia decision the same rule was applied,
that is, an agent can waive provisions in a written applica-
tion or policy and the company is estopped to insist on the
same; and in that later Georgia case the agent was not a
general agent, as in the instant case.

Metropolitan Life Ins. Co. vs. Hale, 177 Ga. 632

_ The District Court, affirmed by the Circuit Court of
Appeals, in holding that the representations and agreements
made by the general agent of the company were of no avail
to the petitioner in that all such representations and agree-
ments merged into the written application, said:

“All previous negotiations are merged therein and
no oral representations may be relied upon to vary its
terms. Mitchiner vs. Union Central Life Ins. Co., 185
Ga. 194; Wheeler vs. Fidelity & Casualty Co., 129 Ga.
237.”

(Ctf. Rec., p. 141, Footnote)

Neither of these Georgia cases cited by the District Court
dealt with an application and in neither was the contention
of waiver or estoppel involved.

_. However, in an insurance case similar to the instant case
where the point of estoppel and waiver was involved, the
appellate courts of Georgia, recognizing that the rule set

16

forth in these two cases cited by the District Court was
not in point, ‘stated:

“The defendant (the insurance company) relies on
Fowler vs. Preferred Accident Ins. Co., 100 Ga.
300; Life & Cas. Co. of Tenn. vs. Williams., 200 Ga.
273; MITCHINER VS. UNION CENTRAL LIFE
INS. CO., 185 Ga. 194. . . We have considered all of
these cases and do not think that they require a differ-
ent holding in the instant case.”

American Life Ins. Co. of Ala. vs. Stone, 78 Ga. App.
98-103.

As we view the decision of the District Court in this
case, affirmed as to counts I, II and IV, by the Circuit Court
of Appeals without elaboration, it completely overlooks the
law of Georgia that an agent for an insurance company
can, by his agreements, acts and representations, waive
written provisions in an application for insurance or the
policy itself, made prior to the issuance of the policy, as
in the instant case; the rule being that the notice, knowl-
edge and agreements made by the agent are imputed to the
company, and that with such knowledge, if the company
accepts the application or accepts money from the appli-
cant for the insurance, the company waives such written
provisions and is estopped to insist on them.

This rule of waiver and estoppel is recognized elsewhere.

“If a casualty insurance agent exceeded his authori-
ty in fixing the date, when the insurance should be-
gin, the insurer, by accepting and retaining the premi-
um secured under such circumstances by the agent,
ratified his act and waived the provision of the appli-
cation that it should not be binding until accepted by
the secretary of the insurer or an authorized agent,

17

and was estopped from denying the authority of such
agent.” (Emphasis ours) .

Beswick vs. National Casualty Co. (Kas.) 226 S.W. 1031

The same rule was announced and applied in the case of
Fitzgerald vs. Colorado Life Ins. Co. (Kas.) 116 S W (2d) 242

“Applicant need not scrutinize blank submitted to
him by soliciting agent as being proper blank for appli-
cant to sign to make contract of insurance effective,
but applicant may rely upon positive representations
of agent.”

Clark vs. National Aid Life Assn. (Okl.) 57 Pac.
(2d) 832 ,

Next we come to consider the effect of the unqualified
acceptance of the application on December 1, 1949, about
a week after the company had cashed the first “Premium
Payment” check and converted the proceeds thereof to its

own use.

A contract of insurance becomes effective upon the ac-
ceptance of the premium by the company and the acceptance
of the application, notwithstanding the policy may, accord-
ing to its terms, take effect at a later date.

Life and Casualty Ins. Co. of Tenn. vs. Palmer, 48
Ga. App. 380 (2)

In the instant case it was alleged that prior to the accept-
ance of the application by the company, and therefore at
the time of the acceptance of the application by the com-
pany, there remained nothing for the applicant to do to
effectuate the insurance.

“A contract of life insurance is consummated upon
the unconditional written acceptance of the application

18

: “|. , When the application is accepted and
nothing remains for the applicant to do, the contract
becomes complete.

“It (the insurance company) would have been
guilty of no breach of trust in appropriating the fund
to its own use. For this privilege, it thus acquired there
must have been a corresponding benefit accruing to
the original owner of the fund; and what he acquired
in lieu of his money was an insurance upon his life,
and a right to the policy which evidenced the con-
summation of the contract.

“This owner had a right to demand possession of it.
Upon refusal, he could have recovered it by an action
of trover. Conceding this right, we cannot see how
death can rob the beneficiary of her rights under
the contract.”

New York Life Ins. Co. vs. Babcock, 104 Ga. 67,
73-74

It cannot possibly be denied, nor even questioned, that
the petitioner and the deceased were entitled to the policy
on December 1, 1949, and that it would have been delivered
to them on that date had they gone to the company’s home
office in South Carolina and requested it.

This being true, petitioner is entitled to have the follow-
ing equitable maxim enforced in her favor:

“Equity considers that done which ought to be done
and directs its relief accordingly.” :

Sect. 106, Title 37 1933 Code of Georgia Annotated

ANS Sata cab ieee eee a

19

It is true that a policy of insurance in Georgia is required
to be in writing:

“The contract of fire insurance is one whereby an
individual or company, in consideration of a premium
paid, shall agree to indemnify the assured against loss
by fire to the property described in the policy, accord-
ing to the terms and stipulations thereof. Such con-
tract, to be binding, shall be in writing; but delivery
shall not be necessary if, in other respects, the contract
shall be consummated.”

Sect. 801, Title 56, 1933 Code of Georgia Annotated
By another Code section this rule is made applicable to
all types of insurance.

The requirement that the policy of insurance be in
writing does not apply to any count of the petition except
Count I.

Count II is an action for breach of promise or agreement
to insure, and, therefore, it recognizes that no policy was
issued and sets forth that there was an agreement to do so,
and the failure to do so according to the agreement is
grounds for recovery of damages.

Likewise, Count III recognizes that no policy was issued
and is strictly an action for unreasonable delay in passing
on the application.

In Count IV the requirement that the policy be in wsit-
ing was met, in that the policy identically as agreed upon
between the deceased and the company’s general agent was
actually issued in writing. The written policy was dated
December 5, 1949, and this count prays for reformation of
the contract so as to make it read as effective November 15,
1949, the date agreed upon by and between the general

me

agent and the deceased, or December 1, 1949, the date of
the unqualified acceptance of the written application.

With respect to the requirement of the policy being in
writing, as to Count I, the law appears to be that where the
facts authorize it, the court can decree specific perform-
ance, compel the contract to be considered executed at the
time justified by the facts, and grant a recovery on the policy
in the same action.

“ «The insured may bring an action at law upon the
preliminary contract in the same manner as upon the
policy. He may, however, treat the contract as an agree-
ment to insure, and resort to a court of equity to com-
pel the delivery of a policy either before or after the
happening of the loss; and being properly in that
court after the loss has happened, it is according to
established course of procedure, in order to avoid de-
lay and expense to the parties, for that court to proceed
and give such final relief as the circumstances of the
case demand. . . If the parties have entered into a
preliminary agreement for insurance, the insurer is
bound in good faith to furnish a policy in the usual
form and with the usual clauses. If the policy does not
conform to the previous agreement, the applicant may
refuse to accept it, and recover back any money he
may have paid in the premiums; or if he has accepted
it, supposing it to conform to his contract with the
insurer, a court of equity will reform it in a proper
case.’ 16 Am. & Eng. Enc. Law, 853.”

Fort Valley Coca Cola Co. vs. Lumbermen’s Co.,
69 Ga. App. 120, 125.

It was alleged that it would be a fraud upon petitioner to
permit the company to accept her and her husband's funds
on the representations of the company’s agent and not be

21

responsible to her on the agreement for which the funds
were given and accepted. Otherwise, as was held in New
York Life Insurance Co. vs. Babcock, supra., it would be
guilty of a wrongful conversion of the funds. Pursuant to
the agreement of the general agent, that the insurance would
be in effect on November 15, 1949, if the company cashed
the first premium check, the petitioner and her husband
forewent obtaining other contemplated insurance when
they ascertained that the check had been cashed. These facts
warrant specific performance under the law of Georgia.

“Where the law requires a contract to be in writing,
equity will grant relief, if the party complaining has
so acted on the parol contract as that it would be a
fraud upon him to permit the other to deny the con-
tract. But in such cases, the act must be in pursuance
of the contract, on the faith of it, and induced by it.”

Simonton, Jones & Hatcher vs. The Liverpool, Lon-
don and Globe Insurance Co., 51 Ga. 77 (2)

This rule is of universal application.

“An insurance company is bound by the acts of its
agent, whether general or special, which are within
the scope of his real or apparent authority, notwith-
standing that they are in violation of private limitations
upon his authority of which the person dealing with
him, acting in good faith, has no knowledge.’

“Where insurer's soliciting agent had apparent au-
thority to accept application, and applicant for acci-
dent policy, some eight days before her accidental
death, had acted upon such apparent authority with-
out notice to the contrary, to her detriment, benefi-
ciary was entitled to specific performance of the al-
leged oral contract, notwithstanding that soliciting

“f
ae
Se

22

agent was the general agent and did not have real au-
thority to make oral contracts for insurance.”

Hahn vs. National Casualty Co. (Idaho), 136 Pac.
(2d) 739

“When a preliminary contract for insurance is valid
it may be enforced in a court of equity against the com-
pany, and being enforced by the procurement of a
policy, an action can be maintained upon the instru-
ment; or the court in enforcing the execution of the
contract may enter a decree for the amount of the in-
surance.”

Insurance Company vs. Colt. 20 Wall. 560 (3), 22
L. Ed. 423

_‘. . . . Where the policy would have been binding
if it had been issued, the agreement to insure will be
held binding. Such an executory contract may be oral,
although the statutes or the charter or by-laws of the
insurance company provide that policies shall be in
writing, or prescribe the mode of executing them.”

32 C. J., Sect. 182, p. 1098

“It is well settled that a contract to insure or to
deliver a policy of insurance may be specifically en-
forced even though a loss has already occurred, where
there was a valid agreement before the loss; and in
the latter case, the court having acquired jurisdiction
of the cause, will retain it for the purpose of adjusting
the loss and awarding damages. . . . .

58 C.J. Sect. 297, p 1054

The right of reformation of an insurance policy which is

a
3 Fan

dated a different date from that agreed upon or implied
by law is recognized and applied in Georgia.

“Equity has jurisdiction to reform a written instru-
ment, where there has been ignorance or mistake on
the part of one of the parties accompanied by fraud,
or inequitable conduct on the part of the other party.
If the fraud or inequitable conduct complained of con-
sists of an alleged misrepresentation of fact, it is im-
material whether the party making the misrepresen-
tation of fact knows it to be false or not; it is nonethe-
less fraud in law, even though not fraud in fact.”

Wellborn vs. Johnson, 204 Ga. 389

This rule is likewise recognized as the authority by Wil-
liston in his work on contracts.

“Some decisions hold that the parol evidence rule
forbids enforcement of the parol waiver contemporan-
eous with the creation of a written contract. . . . .

“Most decisions, however, support the right of the
insured to recover, and to most minds these decisions
will seem preferable if their result can be reached
without wrenching legal principles. Most of the cases
so deciding speak ofestoppel, . . . .......~.,
Two other principles have been invoked to explain,
at least partially, the conclusion of the majority of the
decisions: fraud and reformation of contract. The con-
duct of the insurer is not generally intentionally fraud-
ulent, but to take money as a premium in return for
a promise which the insurer must be held to know
is invalid may fairly be regarded as a fraud in law by
a court which does not require as an invariable requi-
site of fraud or deceit that an actual wrongful intent
should exist, if the transaction is fraudulent the ques-

‘tion then arises as to the remedy of the defrauded —
party.

“The other explanation suggested for allowing the
plaintiff to recover is that the contract should be re-
formed in equity to express the real intention of the
. parties and that as a short cut an action at law on the
policy is permitted on evidence being given that would
warrant reformation.” 7

Willison on Contracts, Revised Edition, Vol. 3,
Sects 747, 748, 749, 750, pp 2120, 2123, 2124, 2125,
2126

It is also recognized that in such cases as the instant case —

an action may be brought for specific performance of the
agreement to insure, as in Count I, or for breach of con-
tract to insure.

“Where insurer received application for insurance,
together with premium thereon, implied promise is
thereby created on the part of the insurer to act on
application within reasonable time, and insurer may
be held liable for breach of implied promise, or appli-
cant may waive contract and sue in tort for negligence
on insurer's failure to act within reasonable time.”

Travelers Ins. Co. vs. Taliferro (Okla), 54 Pac. (24)
1069

“The failure on the part of the insurer to deliver the
policy in accordance with the agreement at the time
stipulated or within a reasonable time will render him
liable in an action for breach of contract, or to a suit
in equity for specific performance.

“Indeed, no citation of authorities is necessary to

a

25

support the proposition that damages may be based
upon a broken promise to insure.”

National Liberty Ins. Co. of America vs. Jones (Va.)
183 S. E. 443

Next we come to consider, with respect to Counts I and
IV, whether the provisions in the application requiring
issuance and delivery of the policy during the life and
sound health of the deceased can be availing to the insurance
company as a defense.

The company admits that if the policy had been issued
prior to the death of the deceased the application would not
have been attached, nor would any provision requiring
issuance or delivery of the policy during the life and sound
health of the deceased been in the policy itself.

This being true, and no delivery of the policy being
required as a condition precedent to its binding effect
under the law of Georgia, unless so stipulated in the policy
itself or an attached application, the defendant company
cannot insist upon issuance or delivery of the policy as a
defense.

Delivery of the policy is not required by law:

“. . . . Such contract, to be binding, shall be in
writting: but delivery shall not be necessary if, in other
respects, the contract shall be consummat

Section 801, Title 56, 1933 Cole of Georgia Annotated

“Actual delivery of the policy to the insured is not
essential to the validity of a contract of life insurance,
unless expressly made so by the terms of the contract.”

New York Life Ins. Co. vs. Babcock, 104 Ga. 67 (2)

The policy of insurance itself, which is sued on in Count
IV, wherein reformation is prayed, and which is prayed to ©
be décreed in effect by decree of specific performance in
Count I, does not have any requirement of issuance or
delivery in it.

; The provision of issuance and delivery in the application

: is unenforceable and nugatory as a defense because the

: application is not attached to the policy dated December
5, 1949, and would not have been attached had the policy
been issued and dated December 1, 1949, or previously.

“All life insurance policies issued upon the lives of
persons within this State, whether issued by companies
organized under the laws of this State or by foreign
companies doing business in this State, which contain
any reference to the application for insurance, or the
constitution, by-laws, or other rules of the company,
either as forming part of the policy or contract between
the parties thereto or having any bearing on said con-
tract, shall contain, or have attached to said policy, a
correct copy of said application signed by the applicant,
and of the constitution, by-laws, and rules referred to
and unless so attached and accompanying the policy,
no such application, constitution, by-laws or rules shall
be received in evidence either as part of the policy or
as an independent contract in any controversy between
the parties to or interested in the said policy, nor shall
such application, constitution, by-laws, or rules be con-
sidered a part of the policy or contract between such

parties.’

Sect. 904, Title 56, 1933 Code of Georgia Anno-
tated

This statute has been repeatedly held as meaning exactly
what it says:

27

‘A stipulation in an application for insurance, where-
by it is agreed between the insured and the insurance
company that the agent of the company has no author-
ity to waive or dispense with full, true and complete
answers to the questions contained in the application,
may not, when the application is not attached to the
policy, serve as notice to the insured of the limitation
of the agent’s authority. To allow it to so serve would
be in contravention of Code Sect. 56-904, requiring
the application to be attached to the policy before it
may be introduced as a part of the contract of insur-
ance or as an independent contract in any litigation
between the parties interested therein.” (Emphasis
ours.)

Gulf Life Ins. Co. vs. Bloodworth, 73 Ga. App. 102
The following cases apply the same rule:

Torbert us. Cherokee Ins. Co., 141 Ga. 773 (1)
Mutual Benefit Health & Accident Assn. vs. Bell,
49 Ga. App. 640, 643, and_ cases cited.

On December | there was nothing left for the defendant
to do except fill in the blanks in its policy form. Had this
been accomplished, on December 1, 1949, but the policy
dated December 5, 1949, it would still be binding as of
December 1, 1949.

Life and Casualty Co. of Tenn. vs. Palmer, 48 Ga.
App. 380 (2)

In the following Georgia case the facts were that the life
policy application stated: “The insurance applied for shall
not be binding on the company until the amount of the
first premium shall be received in cash by said company
or by some authorized agent thereof, during the lifetime of

the applicant. . .” The applicant forwarded the premium
to the soliciting agent at the time the application was made
but the agent refused it; and the agent refused to deliver
the policy later or accept the premium payment because the
applicant was then sick.

“Held, that on a bill filed for the recovery of the
amount of the policy, equity will consider that done
which ought to have been done. That under the cir-
cumstances it was the duty of the agent of the insur-
ance company, who had received the policy from the
company as the agent also of the applicant, and who
had himself waived the payment of the premium when
the application was made to him and had assured him
that he would be insured any how, and had agreed
to make the application for him, and had written to
him that the policy was issued and ready for him, and
he would deliver it the next week, to comply with his
promise and to deliver it on payment of the premium
by the applicant or his agent; and that it would be in-
equitable for the insurance company to refuse to pay
the amount of the policy under these circumstances.”

The Southern Life Ins. Co. vs. Edward T. Kempton,
56 Ga. 339

Therefore, it appears that petitioner is entitled to both
specific performance and reformation, and it necessarily
follows that she is entitled to a recovery.

Count II presents a factual question, requiring a jury —
determination, of whether under the circumstances there —
was an implied acceptance of the applicant during his
lifetime, due to the conduct of the company and its general

agent.

“It is the general rule that mere delay in passing
upon an application for insurance is not sufficient in

and of itself to amount to acceptance even though the
premium is retained. Misselhorn vy. Mutual Reserve
Fund Life Assn. C.C., 30 F. 545; 32 C. T. 1106. But
an acceptance may be implied from retention of the
premium and failure to reject within a reasonable time.
] Joyce on Insurance, Sect. 57; Richmond v. Travelers’
Ins. Co., 123 Tenn. 307, 180 S W. 790, 30 L.R.A.,.N. S.

“A strong decision in support of the present view
is Douglass v. Mutual Benefit Health & Accident Assn.,
42 N. M. 190, 76 P. 2d 453. This was an action on an
accident and health policy involving facts very similar
to those presented here. The soliciting agent there
informed the applicant that the policy would be in
effect as soon as the application and premium were
received at the home office. The court held that the
company was required to return the premium with-
out unreasonable delay if the application was rejected,
with notice of that fact, and sustained a recovery based
upon an implied acceptance of the application. A
similar holding was made in a life insurance case, Reck
v. Prudential Ins. Co. 116 N.J.L. 444, 184, A. 777,
cf. Peoples Life Ins. Co. vs. Whiteside, 5 Cir. 94 F. 2d
409; Williams vs. Home Ins. Co., 102 Kan. 74 169 P.
545; Phoenix Ins. Co. v. Hale, 67 Ark. 433, 55 S. W.
486.”

American Life Ins. Co. of Ala. vs. Hutcheson, 109
F. (2d) 424,427, 428

There appears to be no direct authority in Georgia on

this particular point, as is the case with respect to questions
presented in Count III, although the following Georgia
cases certainly indicate that the Georgia courts would up-
hold this contention of petitioner.

“Where a member of a mutual insurance company

pte hee gas ee ¥ pikes 5

fails to meet the assessments made upon him but sub-

. sequently transmits to the secretary thereof an amount —
of moriey in payment of all dues then demanded of
him, which sum the company retains until after his
death without notifying him whether it was satisfac-
tory or not, such action was a waiver of the default
and restored him to membership.”

Georgia Masonic M utual Ins. Co. vs. Gibson, 52 Ga.
640 (3)

“In our opinion the acceptance of the premiums
and placing the money in the general funds of the de-
fendant amounted to such an unconditional accept-
ance as to estop the defendant to contend that the policy
was not in force at the date of the fire.”

Progressive Fire Ins. Co. vs. Morrison, 72 Ga. App.
473,482

The policy issued by the defendant, which was dated
December 5, 1949, was identical with that which the de-
ceased unconditionally agreed to accept on November 15,
when he and petitioner paid their money for the policy.
On page 1, this policy actually issued recited that it insures
the defendant from December 5, 1949, for one month. On
page 4, Section 3, under “General Provisions,” it is stated:
“This policy cannot be cancelled for the term which the
premium has been paid.” (R., pp 49, 52.)

The check of the plaintiff and the deceased, which was
dated November 15, 1949, and which the defendant cashed
on November 25, 1949, is contended by the defendant as
being payment of the premium for “the term” commenc:
ing December 5, 1949. The petitioner contends that the
check was payment for “the term” commencing November

$1

15, 1949, or at least not later than the term commencing
November 25, 1949, the date the check was cashed. The
check had printed on it: “Premium Payment. The Execu-
tive and Professional Accident Policy.”

We submit that these two clauses, under the facts of the
case, subject the policy to a construction with respect to
what is meant by “the term.” The policy nowhere, except
in this Section 3 under General Provisions, on the last page,
uses the words “the term.”

In cases of possible construction the Georgia courts have
consistently and repeatedly held that that construction will
be taken which enures to the benefit of the insured, or
beneficiary, and works to the detriment of the insurance

company.

“In determining whether under the terms of the
contract of insurance the policy had lapsed at the time
of the accident in question (or, in the instant case, had
commenced at the time of the loss) , there being a con-
flict in its provisions as to when the insurance became
of force, the provision most favorable to the insured
must control. . . .”

Parham vs. National Relief Assurance Co., 33 Ga.
App. 59

“Insurance policies are prepared and proposed by
the insurer; and where such a contract is capable of
being construed in two ways, that interpretation must
be placed upon it which is most favorable to the in-
or, EE: ” (Emphasis ours.)

State Mutual Life Ins. Co. vs. Forrest, Admrx., 19
Ga. App. 296 (1)

Following this rule are the following cases:

$2

United National Ins. Co. vs. Cody, 81 Ga. App. 527
Mass. Benefit Life Assn. vs. Robinson, 104 Ga.
256 (2)

Count III

There is no direct Georgia law for precedent in determin-
ing the questions in this count.

The Circuit Court of Appeals for the Fifth Circuit, citing
no authority whatsoever, and making no attempt at all to
ascertain how the Georgia courts would determine the
questions if presented to the Georgia courts, held that,
as a matter of law, this count was without merit.

This is clearly contrary to the decisions and previous man-
dates of this Court.

“In view of the fact that the question in the case
was regarded below, both by the courts and by counsel,
as one of ‘general’ or ‘Federal’ law, thie interest of jus-
tice requires that the judgment be vacated and the
case remanded for the enforcement of the applicable
principle of state law.”

Ruhlin vs. New York Life Ins. Co., 304 U.S. 202,
82 L. Ed. 1290.

Though not applying the above rule of this Court, the
Circuit Court of Appeals for the Fifth Circuit has recog:
nized this rule in another case. a

“The command of Erie Railway Co. vs. Tompkins,
304 U. S. 64, is that the ultimate results reached in
litigation in the Federal courts, predicated upon causes
of action arising from the State law, must be the same
as if the litigation had been conducted in the State
courts. While the Federal court should properly em-

33

ploy its own rules of procedure to secure the just, effi-
cient and prompt determination of all claims inherent
in any litigation before it, nevertheless, the ultimate
results reached must be such as accord with the sub-
stantive jurisprudence of the state of the forum. Thus,
if there be no directly applicable state authority, the
court must ascertain for itself what would be the dec-
laration of the state law by the state courts in such a
situation as confronts it.”

Likenhoger vs. Owens, 181 F. (2d) 97, 99 (5th Cir.)

Two Circiut Courts of Appeals have held directly in con-
flict with the decision of the Circuit Court of Appeals in
this case on the same subject matter.

“An insurer may be held liable in tort for damages
to life policy applicant, where there has been unreason-
able delay in acting on application, since business of
life insurance is affected with public interest and in-
surer is bound to furnish indemnity State has author-
ized it to furnish or to decline to do so within such
reasonable time as will enable applicant to act intelli-

gently upon rejection.

“Generally mere delay in passing upon life insur-
ance application is not sufficient to constitute accept-
ance of application, even though premium is retained,
but acceptance may be implied from retention of
premium and failure to reject within reasonable time.

“The case is governed by the law of Tennessee.
Erie Ry. Co. vs. Tompkins, 304 U. S. 64.

“No insurance decision in Tennessee is found pre-
cisely in point upon these facts.

“The judgment (in favor of the wife beneficiary of
the husband insured) is affirmed.”

an

ee

LPARAM

34

American Life Ins. Co. of Ala. vs. Hutcheson, 109 F,
(2d) 424 (6th Cir. Certiorari denied 310 U. S. 625,
84 L. Ed. 1397)

In that case the Sixth Circuit Court of Appeals could
find no Tennessee decision to uphold the verdict and judg-
ment and looked elsewhere and cited authority to support
its decision from the courts of eleven states, Corpus Juris
and several Federal court cases.

The Circuit Court of Appeals for the Seventh Circuit
states the rule of law that an action lies for unreasonable
delay in passing on an insurance application so emphati-
cally as to leave no question.

“It is equally well settled that an insurance com-
pany may be liable for its delay in passing upon an
application for insurance.” (Citing cases.)

Behnke vs. Standard Accident Insurance Co., 41 F.
(2d) 696, 699 (7th Cir.)

The Circuit Court of Appeals in its judgment in this case
: held that the provisions in the application requiring issu-
' ance and delivery were a bar to recovery on this count. This
action is for tort and no provision in the application could
possibly be a defense to this count. If anything, the provi-
sions of the application concerning delivery placed a greater
burden on the company to speedily pass on it, particularly
when the applicant was contemplating obtaining other in-
surance in the event of a rejection of his application.

q “It is alleged further that under the policy the com-
a pany was being paid for insurance from the time of the
{ application though it did not become effective until
the policy had been ‘delivered to and received by the
applicant during his lifetime and in good health,’ be-

35

cause of these conditions the company owed a duty to
the applicant to use reasonable care and diligence in
passing upon the application and in the execution and
delivery of the policy. . . .

“The cause of action being for damages resulting

from the defendant's neglect to act promptly in con-
sidering the application, and in the issue and delivery
of the policy there is no occasion for considering wheth-
er or not the policy was delivered as required by the
contract, of which question the briefs contain an ex-
tended discussion.” (Emphasis ours.)

DeFord vs. New York Life Ins. Co., 224 Pac. 1049,
1050-51

All of the cases upholding an action for unreasonable de-
lay hold that insurance is affected with the public interest
and the company must use reasonable diligence in passing
on the application for insurance.

It has been held by the courts of Georgia that insurance
in Georgia is affected with the public interest.

“The business of insurance is one so clothed with a
public interest, affecting the community at large as
to render it peculiarly subject to proper governmental
regulation. German Alliance Ins. Co. vs. Lewis, 233
U.S. 389, 58 L. Ed. 1011.”

Cooper Co. of Gainesville vs. The State, 187 Ga. 497,
500

“Of course, being affected with the public interest, its
(insurance company’s) business operations were subject
to regulations prescribed by the laws of this State as a con-
dition upon which the right to do business was granted.”

36

Bankers Life & Casualty Co. vs. Cravey, Comptroller
General, etc., Supreme Court of Georgia Decision
No. 17687, decided January 29, 1952 (Not yet re-

ported in official reports.)

In the case at bar eighteen days elapsed between the date
of the application and the death of the applicant, and no
direct notice or rejection or acceptance was given petitioner
or her husband in the meantime.

In the following cases the question of delay in passing
on the application was properly held a question of fact
for the jury, and the verdicts for the plaintiff were upheld:

American Life Ins. Co. of Ala. vs. Hutchinson, 109
F. (2d) 424, 16 days involved.

DeFord vs. New York Life Ins. Co., 77 Colo. 146,
224 Pac. 1049, 1050-51 18 days involved.

Witten vs. Beacon Life Assn. (Kan.), 33 S.W. (2d)
989, 13 days involved.

Douglass vs. Mutual Benefit Health & Accident
Assn. (N. Mex.) 76 Pac. (2d) 452, 2 days involved.

In the absence of applicable local laws, Federal courts are
authorized and should look elsewhere for the rule to be
applied in determining how the local State courts would
decide the question.

“In the absence of local authority, Federal court
may rely on general statement of the law.”

Hornstein vs. Cramer Bros. Freight Lines, Inc., 133
F (2d) 143 (3rd Cir.)

“In the absence of any applicable local law, a Fed-
eral court is free to apply general law as most likely
comporting with the local state’s outlook.”

37

Zephyr American Corp. vs. Bates Mfg. Co., 128 F.
(2d) 380 (25) (3rd Cir.)

“Federal court, in absence of any applicable local
law, is free to apply general law as most likely comport-
ing with local state’s outlook.”

Chidester us. City of Newark (Dist. Ct. of N. J.),
58 Fed. Supp. 787, following Zephyr American,
supra.

“Where Illinois law had not been declared on state
of facts alleged in complaint arising under Illinois con-
tract, Circuit Court of Appeals was free to look else-
where for rule of law that ought to be applied.”

Fargo Glass & Paint Co. vs. Globe American Corp. ie
161 F. (2d) 811 (7th Cir.), citing:

Shell Oil Co. vs. Manley Oil Corp., 124 F. (2d) 714
(7th Cir.)

Following is additional authority that the questions pre-
sented in this count are jury questions:

‘What is a reasonable period depends on the facts
in each case.

“When the reasonable period expired and the in-
surer failed to communicate its rejection to applicant
and also failed to return the amount paid with the
application, applicant may assume, at least for a time,
that the application has been accepted, and the insurer
will be liable for the loss resulting from applicant's
failure to attempt to place the insurance elsewhere, in
reliance on his assumption of acceptance. . .”

44 C.J.S., Sect. 232, pp. 987.

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“notice to the applicant of the rejection of the appli :

cation is necessary where it is the understanding or

agreement between him and the agent that insurance
is effective unless disapproved or rejected by the com-
pany.”

32 C.J., Sect. 196, p. 1107

‘‘An insurer has the duty to act upon an application
for life insurance with reasonable promptness and to
refrain from doing anything reasonably calculated to
mislead the applicant.”

Keller vs. Provident Life & Accident Ins. Co., (S.C.)
49 S.E. (2d) 577

“What was the reasonable time within which the
premium could be returned and the applicant thus
apprized that the insurance had been declined would

be a question of fact to be determined in the particular -

case . . . Norcould the death of the insured within
two days of the application and delivery of the receipt,
as contended for by the appellant, affect the result.”

Douglas vs. Mutual Benefit Health & Accident Assn.
(N. Mex.), 76 Pac. (2d) 453, 460

“Where insurer accepted and retained life policy
premium, received medical examination report on ap-
plicant on October 12, and on October 14 requested
another blood pressure test to be taken, whether in-
surer unreasonably delayed its action on application
so that acceptance was implied, and policy was in force
on date of insured’s death, which occurred on October
26, was for jury.”

American Life Ins. Co. of Ala. vs. Hutcheson (6th
Cir.) 109 F. (2d) 424

89

It is contended once this Court takes jurisdiction of this
_ tax all questions propounded should be determined by this
Court. Consequently, we shall point out the right of the
petitioner to maintain this count in her own individual
name. The District Court, though as obiter dictum and not
considered by the Circuit Court of Appeals, held that the
petitioner could not maintain this count in her individual
name.

It must be borne in mind that it was the joint funds of
petitioner and her husband that the defendant appropri-
ated to its own use when it cashed the check for the first
premium; that petitioner was named as the sole beneficiary
in the application and that petitioner was the only person
who could suffer if her husband met accidental death with
no insurance protection in force. Petitioner had a property
right in the application and in the funds that the defend-
ant appropriated to its use.

“As a general rule, the action on a contract, whether
express or implied or whether by parol or under seal,
or of record, shall be brought in the name of the party
in whom the legal interest in such contract is vested,
and against the party who made it in person or by
agent. The beneficiary of a contract made between
other parties for his benefit may maintain an action
against the promisor on said contract.”

Sect. 108, Title 3, 1933 Code of Georgia Annotated

“An action for a tort shall, in general, be brought
in the name of the person whose legal right has been
affected, and who was legally interested in the prop-
erty at the time the injury thereto was committed, and
against the party committing the injury, either by him-
self, his servant, or agent in his employment.”

Sect. 109, Title 3, 1933 Code of Georgia Annotated

iacechanenel sag ges

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Papi rao at

"Certainly petitioner had a legal right that was affected.
In the absence of unreasonable delay the policy would have
been in her hands at the time of her husband’s death, and
there would have been no question of liability.

Moreover, there can be no doubt that petitioner has a
legal right to maintain an action in her own name for
breach of the promise to insure, as set out in Count II.
Under the law of Georgia, she has a right to bring an action
in tort for this breach of a duty created by contract, express
or implied.

“If a contract imposes a legal duty upon a person,
the neglect of that duty is a tort founded upon a con-
tract. In such a case, the liability arises out of the breach
of duty incident to and created by the contract, but is
only dependent upon the contract to the extent neces-
sary to raise the duty. The tort consists in the breach
of the duty.”

The City & Suburban Ry. of Savannah vs. Brauss,
70 Ga. 368 (1)

This rule of law is also set forth in the following cases:

Payne vs. Watters et al., 9 Ga. App. 265 (2nd case)
Lea vs. Harris, 88 Ga. 236
L. & N. Ry. Co. vs. Spinks, 104 Ga. 692

State Mutual Life Assn. vs. Baldwin, 116 Ga. 855,
860

Postal Telegraph & Cable Co. vs. Kaler et al. 65 Ga
App. 641

Therefore, petitioner has the right to prosecute thi
count oh the ground that she has a property right in the

41

subject matter and the funds that were accepted by the
“defendant company, and because insurance in Georgia is
‘affected with a public interest, and insurance companies
“must use diligence in passing on an application for insur-
“ance; also, because of the breach of the agreement to insure.
Petitioner can maintain this tort count in her own name
‘on the grounds that the tort grew out of the breach of the
duty created by the agreement.

CONCLUSION

It is respectfully submitted that this Court should grant
the writ of certiorari 1: this case and review all of the ques-
tions presented.

Although the Circuit Court of Appeals for the Fifth
Circuit failed to attempt to ascertain what the courts of
Georgia might do with the question presented in Count III,
and this alone would require a reversal and the remanding
of the case to that court for a determination of what the
Georgia courts would decide, we respectfully urge this
Court to review the entire record and adjudicate the cor-
rectness of petitioner's contentions that the Circuit Court
of Appeals erred with respect to Counts I, II and IV, and
also determine the applicable law of this case with respect to
Count III.

Respectfully submitted,

J. J. Frynt, Jr.
P. O. Box 103
Griffin, Georgia
WALLACE MILLER, JR.
515 Persons Building
Macon, Georgia
Miter, MILLER & MILLER
: Attorneys for Petitioners
515 Persons Building
Macon, Georgia

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Statement of the Case

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sinions of District and Circuit Courts

and Argument

Importance of Questions and Reasons
Relied on for Allowance of Writ

(1) The Decision of the Circuit is not in
Conflict with the Decision of other Circuits

(2) No Conflict with Georgia Decisions

e itioners Real Reasons for Asking Issuance of Writ
Ge nts I, Il and IV

No Recovery on Tort Theory (Count III)

Conclusion

Page

19
23

LIST OF CASES CITED

Americn Life Ins. Co. of Alabama vs. Hutcheson,
10$ F. (2d) 424 (6th Cir.) (Certiorari denied
314 Uy. S. 625; 84 L. Ed 1397)

Behnke ¢ aj vs. Standard Accident Ins. Co. of
Déyoit, Michigan, 41 F (2d) 696 (7th Ciruit)

Boswell ys/ Gulf Life Ins. Co., 197 Ga. 269 ()),
272 29S. E.2nd71 .

Bradley ys Federal Life Ins. Co., 129 N. E. 171;
15a. L. R. 1021, 1024 ek Cvs

Code 0: Georgia, Section 3-505

Code ©! Georgia, Section 56-801

Code 0! Georgia, Section 56-911

Code 0! Georgia, Section 58-213 .

Code 0! Georgia, Section 105-101 .

Code 0! Georgia, Section 105-103 .

Code © Georgia, Section 105-104 . pee
DeFordys. New York Life Ins. Co., 75 Colo. 146 P. 1049, 1050 .

Duffie ys. Bankers Life Asso., 160 Iowa 19; 139
N.W. 1087; 46 L. R. A. (N.S.) 25 .

Fowler ys. Liberty National Ins. Co., 73 Ga. APP.
76!, 770 (4); 38S. E. 2d 60 .

Fowlerys, Preferred Accident Ins. Co., 100 Ga. 330
(13), 331-384 ;28 S. E. 398 .

Frazietys. Ga. Railroad, 101 Ga. (1); 28 S. E. 662

Genera Talking Pictures Corporation vs. Western
Elctric Company, Inc., 304 U. S. 175, 178;
58S. Ct. 849; 82 L. Ed. 1273

Georgi Kaolin Co. vs. Walker, 54 App. 742, 746-47 .
Gidditys vs. Ins. Co., 102 U.S. 108, 111; 26 L. Ed. 92 .
Home ins. Co. vs. Swann, 34 App. 19 (2), 24,25 .

|

_ Johnson vs. American Nat. Ins. Co., 5 tO ‘ie 801,

3; 68 S. E. 731

"Knight vs. Superior Fire Ins. Co., 80 Fed. 2d 311 GCCA)

Lane & Bowler Corp. vs. Western Well Works, 261
U. S. 387, 393; 67 L. Ed. 712, 714 .
Life & Cas. Co. of Tenn. vs. Carter, i Cu Ave:

622, 626; 191 S. E. 153; Affmd. 185 re
746; 196 S. E. 415 eh

Maddox. vs. Life & Cas. Co., 79 Ga. App. 164, 176

(5); 53S. E. 2d 235 .

Metropolitan Life Ins. Co. vs. Brady (ind),
N. E. 99 ,100, 102-3. .

Pde: os Life Ins. Co., vs. Tharpe 20 Ga. App.
98S. E.299 . .

Mitchiner vs. Union Central Life mn ‘Cn 185
Ga. Rep. 194, 196; 194 S. E.530 . . . .

Munger vs. Equitable Life Assur. Soc. of the U. s.
é "3 Fed. Supp. 914 (1-2), 915-921 (Dist. Ct. W. Dist. Mo.)

National Union Fire Ins. Co. vs. School ee se
182 S. W. 547 (1, 3, 4) 548 . .

Newark Fire Ins. Co. vs. Smith, 176 Ga. Rep. 91 94.6;
167S.E.79.. . .

New York Life Ins. Co. vs. ‘Babcock, 104 Ca. 67 :

_ Newton vs. Gulf Life Ins. Co., 55 Ga. Seid $30, 332;

190 S. E. 69

Reese vs. Fidelity Mut. ‘Life we Co. im Ga.
eR: OB. Gs Be GBF oe be

Reserve Loan Life Ins. Co. vs. Philips, “156 Ga.
372, 376; 119S. E. 315 . eins

Ruhlin vs. New York Life Ins. Co., 304, U. s.
202, 82 L. Ed. 1290 . .

Savage vs. Prudential Life Ins. Co. a a: (Miss) ,
121 Southern Reporter 487 (2 and 3) 488-489

United States vs. Johnston, 268 U. S. 220, 45
S. Ct. 496, 69 L. Ed. 925 be tanhiae

Volunteer State Life Ins. Co. vs. McGinnis, 99 ine
App. 370-371; 115 S. E. 287. . .

Vuke Stray vs. Western Life Ins. Co., 300 Pacific
1046; 75 A. L. R. 950-952 bi

17
10

11, 16, 19

13, 19

24

13

IN THE SUPREME COURT OF
THE UNITED STATES

swiss DRM, 1962

MRS. PAULINE R. BURKS

Petitioner
vs.

COLONIAL LIFE & ACCIDENT INSURANCE
COMPANY OF COLUMBIA, SOUTH CAROLINA

Respondent

BRIEF OF RESPONDENT OPPOSING GRANT OF
WRIT OF CERTIORARI

STATEMENT OF THE CASE

In the statement of the case contained in the petition
for writ of certiorari, petitioner, the plaintiff in the court
below, undertakes to give in narrative form the allegations
of the four counts of her complaint and in the main it does
correctly set out substantially the allegations of these four
counts of her complaint. She does not undertake to give
any other summary of the evidence which was submitted i
to the court by the various affidavits of defendant's offic-
ets and employees, though she does include, as if it were
some of the allegations of the complaint, some of this evi-
dence and also some argumentative matter. We respectfully

Tefer the court to the complaint itself for its exact allega-

1

tions and in addition we set forth briefly the undisputed
facts given in evidence by the affidavit of defendant's offic.
ers and employees as follows:

David Halsey Burks, on November 15, 1949, signed an
application for accident insurance in the defendant com-
pany, copy of which application is attached to the com-
plaint as Exhibit C. Said application contained the follow.
ing provisions:

“I further agree that this insurance shall not be in
force until the application is accepted and the Policy
issued by the Company nor until the Policy is delivered
to and accepted by the applicant while in sound health
and free from injury.”

Said application was mailed by the agent on November
19 and received by the defendant at its home office on
November 21, 1949. In due course it was considered and
was on November 29 marked rejected, but was reconsid-
ered on November 30 or December | and marked “O.K.,
J.C.J.”. It was sent to the Policy Issuing Department of
defendant company either late Friday afternoon, Decem-
ber 2 or Monday morning, December 5, defendant's office
having been closed on Saturday and Sunday, December
3 and 4. A policy was prepared, dated and countersigned
on the morning of December 5, 1949, but before the usual
letter of transmittal of said policy had been written, and on
the same morning defendant was informed of the death
of the said David Halsey Burks on December 3, 1949. Said
policy was not mailed or delivered and remained in the
possession of defendant. On the same day December 5, 1949,
defendant wrote a letter to the estate of David Halsey
Burks enclosing defendant’s checks for $10.00 as a refund

2

of the deposit delivered to it to cover first premium, and
also enclosing eleven unused monthly checks which had
been delivered to it. The Company's check for $10.00 was
subsequently returned to it by plaintiff's attorney and was
thereafter continuously tendered to the plaintiff. (R.83-87)

The foregoing facts were set out in substance as state-
ment of facts by the District Court in its opinion in this
case (R.116-117) and were admitted and _ practically
adopted as allegations of the plaintiff in Count Four of her
complaint which was added by way of amendment at a
later date. In addition to these undisputed facts, plaintiff
alleges in her complaint, and the defendant denies in its
answer, that G. C. Poole, agent of the defendant company,
advised the applicant at the time of his application “that
if the Home Office cashed the check dated November 15,
1949, it would mean the company had accepted him and
his policy would be forthcoming and would be dated No-
vember 15, 1949.” It is further alleged by the plaintiff, and
denied by the defendant, that it was agreed between this
agent and the applicant that the check which was later
deposited was payment of a policy premium for the period
beginning November 15, 1949, for one month and that if
accepted he would be covered by insurance during that

period.

OPINIONS OF DISTRICT AND CIRCUIT
COURTS

The District Court in this case dismissed the complaint
on motion for summary judgment. It treated together
Count I (for specific performance) , Count II (for breach) ,
and Count IV (for reformation) , of the complaint, as being
dependent upon a valid, completed contract of insurance.

3

The opinion of thesDistrict Court is set out at pages 115-
126 of the record and was incorporated in full in the opin.
ion of the Circuit Court of Appeals (R. p. 138-145) . The
opinion of both of these courts as to Counts I, II and IV of
the complaint was squarely based on controlling decisions of
the courts of the State of Georgia and the statutes of that
state Count III of the complaint sought damages for the
alleged negligence of defendant in delaying in the issuance
of the policy. In dealing with Count III the District Court
recognized that there was no Georgia statute or case im-
mediately controlling on the right to sue an insurance com-
apny in tort because of such alleged delay. It recognized the
rule of Georgia courts as being the elemental rule that
there can be no tort without a breach of duty and that the
mere filing of an application for insurance did not impose
upon defendant any duty to act at all, much less promptly.
This amounted only to an offer which defendant might
accept, reject or leave unanswered. The District Court
therefore chose to follow what it considered the better rule
as laid down by cases from other jurisdictions and held that
there could be no tort, because no breach of duty, in such
circumstances. The District Court further held that it was
immediately controlled, as to Count III by the Georgia
statutes and decisions that lay down the rule that a right
of action in tort does not survive the death of the person
injured or damaged and that only he, in his life-time, can
commence on action for such a tort.

The Circuit Court of Appeals dealt with Counts I, Il
and IV by affirming that they were controlled in point and
principle by the Courts of Georgia and adopted the opin-
ion of the District Court as to those counts. It expressly re-
frained from approving or disapproving the opinion of the
District Court as to Count III alleging a right of action in

4

tort for the alleged delay in accepting the application or
the issuance of a policy. As to Count III (R. p. 142-5)

Judge Russell, speaking for the Circuit Court, said:

“While we fully recognize and give obedience to
the fundamental principle that the existence of negli-
gence and the determination of what constitutes a
‘reasonable time’ are generally for determination as
questions of fact upon consideration of pertinent cir-
cumstances, we are nevertheless of the firm opinion
that under the precise facts and circumstances of this
case a finding of negligence based upon reasonable
delay would not be legally supportable. The minds of
reasonable men could not differ on these facts. We are
therefore not required to determine, or to express it
more accurately, declare, the law of Georgia which
would be applicable if a factual basis for such finding
existed. The Georgia Courts do not appear to have
passed upon the question and, since we find at the be-
ginning of our consideration of it the existence of an
insurmountable bar to any recovery by the complain-
ant a discussion of the legal merits, otherwise, of this
claim could be only academic. We therefore refrain
and, setting forth the trial Court’s opinion upon this
feature of the case only for the purpose of complete-
ness of quotation, place our decision of affirmance of
the ruling of the trial Court upon the third count of
the complaint upon the grounds which we have
stated.”

Through her petition for writ of certiorari and support-

ing brief, we think that petitioner indicates a misconcep-
tion of what the Circuit Court referred to as constituting
“an unsurmountable bar to any recovery by the complain-

5

ant’. Petitioner says the Court could only have been refer-
ring to the requirement in the application that the insur-
ance shall not be in force until the policy is delivered to
and accepted by applicant while in sound health. We submit
that the Circuit Court referred to its decision on the facts
that “under the precise facts and circumstances of this case
a finding of negligence based upon reasonable delay would
not be legally supportable”. This is the only point de-
cided by the Circuit Court as to Count III.

BRIEF AND ARGUMENT

Importance of Questions and Reasons Relied
on for Allowance of Writ

Petitioner seeks to bring the questions involved within
the suggestions of Supreme Court Rule 38; paragraph
5 (b), contending that the decision of the Circuit Court
was: (1) in conflict with decisions of two other circuits
as it concerned Count III and, (2) in conflict with decisions
of the courts of Georgia as to Counts I, II and IV.

(1)
The Decision of the Circuit Court does

not conflict with Decisions of other Circuits

Petitioner contends the decision as respects Count III is
in conflict with these two decisions of other circuits, towit:

American Life Ins. Co. of Alabama vs. Hutcheson,
109 F. (2d) 424 (6th Cir.) (Certiorari denied 310
U. S. 625; 84 L. Ed. 1397)

Behnke et al. vs. Standard Accident Ins. Co. of
Detroit, Michigan, 41 F. (2d) 696 (7th Circuit)

6

In the Hutcheson case any decision on the tort theory
was obiter for the recovery allowed was on an implied
contract and was squarely based on decisions for the Courts

of Tennessee, where the Federal Court was sitting.

In the Behnke case the 7th Circuit followed the law of
Wisconsin which holds that an oral contract of insurance
is valid (in Georgia such a contract must be wholly in
writing) . The Court went on to hold, in headnote 7, that
in that case as a matter of law, the insurance company was
not negligent under the facts alleged and proved.

In the Behnke case the decision was exactly to the same
effect as in the instant case and obviously could not be in
conflict with it. In the instant case the Circuit Court re-
fused to rule on whether such a tort action would lie but
held that even if it would lie no jury question was presented
by the facts alleged and proved as to the supposed delay.
This could not be in conflict with the Hutcheson case or
any other case which had ruled on the question of whether
there could be a right of action asserted in tort in such cir-
cumstances. Whether in a given case the pleadings and
evidence are sufficient to carry a case to a jury is an every
day question common to every type of case. Such a decision
sets no precedent and can never conflict with other decisions
on principle for it depends purely on a question of fact—
the sufficiency of the evidence. It could not constitute such
“special and important reasons” for granting a writ of
certiorari as is contemplated by Supreme Court Rule 38

par. 5.

Petitioner cites on page 3 of her petition the case of
Ruhlin vs. New York Life Ins. Co., 304 U. S. 202, 82 L. Ed.
1290 to support her contention that uniformity between

7

the circuits will be enforced by grant of certiorari where
conflict appears. After certiorari had been granted in that
case and oral argument had been heard on March 10, 1938,
but before the decision had been rendered on May 2, 1938,
the case of Erie R. R. vs. Thompkins, 304 U. S. 64 was
decided by the Court on April 25, 1938. In the Ruhlin case
this Court commented, “Had Erie R. Co. vs. Thompkins
been announced at some prior date the course of this case
might have been different. This Court might not have
issued a writ of certiorari’. This Court went on to say
(headnote 2):

“As to questions controlled by state law, conflict
among Federal Circuit Courts of Appeals is not of itself
a reason for granting a writ of certiorari by the Su-
preme Court of the United States, as the conflict may
be merely corollary to a permissible difference of opin-
ion in the state courts.”

This court in the Ruhlin case further held “we decline
to decide the issue of state law’’. This Court then remanded
the case because the circuit court (having decided the
case before Erie R. Co. vs. Thompkins) had refused to
consider the state court decisions and had decided the case
independently under general principles of law.

As both the Hutcheson case and the Behnke case followed
the decisions of their respective state courts, they could not,
under the ruling of this Court in the Ruhlin case, constitute
such conflict as would be a reason for granting the writ of
certiorari.

(2.)
No Conflict With Georgia Decisions

Petitioner contends that the decisions of the District
Court and the Circuit Court are in conflict with Georgia

8

decisions as to Counts I, II and IV. But

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_1064%3A1. Public record. Not legal advice.