I think that his Honor, Judge Henry, was entirely right in directing a verdict for the plaintiff in this case, and therefore dissent from the contrary conclusion announced in the opinion of the Chief Justice, for the reasons which follow.
The action is upon two notes given by the defendants upon their application for $3,400 insurance against fire, lightning, tornadoes, cyclones, and windstorms. The application and notes were dated August 23, 1921. The insurance was to continue for 5 years from that date, and the premiums were to be paid; $78.25 on October 1, 1921, and $72.40 on each of the 1st days of September, 1922, 1923, 1924 and 1925, making a total of $367.85. At the time of the application the defendants executed two notes, one for $78.25, payable October 1, 1921, without interest, and the other, making up the other four installments, for $289.60, payable in installments as stated above, without interest. *Page 21 Both contained the attorney's fee clause. The smaller note contained this clause: "This note shall not be valid unless policy is issued by said company." The larger note did not contain this clause. There was in the larger note a provision that default in the payment of any installment, when duc, should mature the entire amount of the note.
The opinion of the Chief Justice is apparently based upon the theory that an actual delivery of the policy to the insured was essential to the consummation of the contract of insurance, and proceeding upon that theory, if sound, very properly holds that as there was a conflict of evidence upon the fact of delivery the case should have been submitted to the jury.
I do not think that the issue of actual delivery of the policy to the insured is at all a controlling one in the case. On the contrary, that it is entirely immaterial, if, as a matter of fact, the application was accepted by the company.
Upon this issue the evidence clearly shows that the application was accepted. The agent of the insurance company, who took the application and the notes, testified at the trial, when the notes were before him, that he forwarded the application and the notes to the head office in Atlanta; that the notes had a memorandum upon them; that "the numbers on the right-hand corner of the notes correspond with that on the policy, and indicate that application was accepted and a policy issued and sent" to the company's local agent; that the numbers on the notes were placed there by the main office in Atlanta. The company retained the notes and at maturity demanded payment, and later sued upon them.
If there had been a loss and the insured had brought suit upon the contract of insurance, I have little doubt but that upon the foregoing evidence the company would have been held liable. If the company was bound to its contract by the acceptance of the application, regardless of the actual delivery of the policy, it is only fair that it should be entitled to the fruits of the contract. Even if the company *Page 22 had not accepted the application, the unreasonable delay in notifying the insured that it had been rejected, thus preventing other insurance, would have estopped it from denying its acceptance.
It is noticeable that the smaller note, in which only the clause appears, states:
"This note shall not be valid unless policy is issued (not delivered) by said company."
See upon the subject of acceptance without actual delivery of the policy 1 Joyce, Ins. (2d Ed.) § 55, where it is declared that, if the company does an act indicating its acceptance of the application, the insurance becomes effective from that date, and, in Section 62, that a policy is considered delivered when mailed from its home office to the agent for delivery to the insured.
I think that the evidence fully warrants the conclusion that the company accepted the application and mailed the policy to the local agent for delivery to the insured, and that it was bound by the contract from that time.
Whether the policy was actually delivered to the insured is uncertain from the evidence; but it is significant that, when demand for payment of the notes was made upon the defendants, they made no complaint that the policy had not been delivered, and only expressed their inability to pay for the reason that "they had not sold their cotton." But, as I have endeavored to show, actual delivery was not essential to the consummation of the contract, where it is shown that the company accepted the application, and did all that they could do to complete the contract, and retained the obligations of the insured as valid.
The judgment of this Court should be that the judgment of the Circuit Court be affirmed.
MR. JUSTICE MARION concurs. *Page 23