In the instant suit by the insurance commissioner to enjoin the defendant cemetery association and its agents from continuing to enter into described contracts with purchasers of cemetery lots or grave spaces, on the theory that they were contracts of life insurance, which the association was not authorized to issue, and also to enjoin the defendants from collecting from purchasers further payments on contracts of purchase and sale that were outstanding at the time the suit was filed: Held, that under the pleadings and the evidence it can not be said as a matter of law that the judge abused his discretion in denying an interlocutory injunction.
No. 14326. JANUARY 13, 1943. The bill of exceptions complains only of the refusal of an interlocutory injunction, on a petition for this and other relief.
Homer C. Parker, in his official capacity as insurance commissioner of the State of Georgia, filed suit against West View Cemetery Association, a corporation of Fulton County, and three named individuals as its officers and agents, alleging that the defendants, in the name of said corporation, are engaged in the business of life insurance and in soliciting and selling contracts of life insurance, without first having obtained a license from petitioner as insurance commissioner, and without complying with any of the laws relating to such business; also that the defendant corporation was chartered by the superior court, and not by the secretary of *Page 238 State, and is not authorized by its charter to engage in the insurance business.
As to the particular business in which the defendants are engaged, the petition alleged: The cemetery association has surveyed and marked a tract of land known as "Garden of Memories," and is engaged in contracting with members of the general public for burial privileges on designated lots in this tract. Under the plan followed by the defendants, the buyer agrees to purchase grave space or spaces in the cemetery on the installment plan, and the seller agrees, on full payment of the purchase-price, to deliver to the buyer for the exclusive purpose of sepulture, "a good and sufficient conveyance of such graves or lots," subject to other terms of the contract; it being further provided, among other things, "that said graves or lots are bought subject to the rules and regulations of the seller, and the buyer expressly agrees to be bound by all such rules and all amendments and new rules hereafter adopted; and that no deed shall be delivered by said seller for said graves or lots until they are paid in full; that in case of default in the above-mentioned payments or any part thereof, for more than two months, said seller shall have the right to declare this contract ended, canceled and forfeited five days after mailing notice thereof to buyer at the above address, and all payments made under said contract shall be retained by said seller as its liquidated damages; and the said seller may dispose of said lots the same as if this contract had not been made. In case of such default the seller is hereby empowered to enter upon said lot and remove the remains of any person or persons who may be interred thereon, and reinter the same in a single grave in said cemetery. . . It is agreed that this contract contains complete understanding between the seller and the buyer, and no agent or representative of the seller has any authority to make any statements or representations or agreements modifying, adding to or changing the terms or conditions set forth."
In connection with such agreement and as a part of the contract of purchase and sale, the defendants issue to each purchaser an additional writing called a "protective certificate," which provides in substance that in the event of the death of the buyer before the purchase-price of any lot has been paid in full, and if the buyer is not in default as to any amount payable under the contract, the *Page 239 association will convey to the designated beneficiary, without further payment or consideration, one or more of the graves contracted for, depending on the percentage of the total amount that has been paid before death of the buyer. "The plan was set in operation about May 1, 1941, although knowledge of the same has just come to petitioner's attention. For the first six months of its operations, the defendants sold protective certificates of the total value of more than $300,000. Since the expiration of the first six months, they have continued in the business hereinbefore described, and petitioner is advised and believes have now sold certificates to the extent of more than $700,000. . . Petitioner is not informed as to the scale of prices at which the contracts for the sale of lots and the accompanying protective certificates are issued. On information and belief, however, he charges that as a part of the agreed price the customer is required to pay the cost of maintaining the protective certificates; that is to say, a premium sufficient to protect the defendants against the risk assumed as evidenced by the protective certificates and contingent upon the death of the so-called buyer. . . Petitioner shows that the so-called protective certificate is a contract of life insurance within the meaning of the laws of Georgia, and that in issuing the same the defendants are engaged in the business of life insurance and are subject to all of the provisions of the laws of Georgia regulating life insurance companies. In selling and issuing said protective certificates, the defendants are violating the laws of Georgia which provide that contracts of life insurance may be taken only by persons or corporations specifically authorized by law so to do, and then only when they are licensed by the insurance commissioner of this State to carry on the business of life insurance."
The commissioner prayed for injunction to restrain the defendants from selling and issuing the protective certificates, and from otherwise engaging in the life-insurance business, and from collecting or receiving from any person or persons to whom they had sold cemetery lots any additional installment or payment under such contracts. Other prayers included one for general relief.
The defendants answered, admitting the plaintiff's allegation of fact, but not his conclusions as to the legal character of the business in which they were engaged, averring that they "did not consider that they were in anywise engaged in life-insurance business, *Page 240 or in issuing life-insurance contracts or policies, and had no purpose or intention whatsoever of violating or evading any laws of the State of Georgia. They alleged that there were approximately eighteen hundred contracts outstanding at the time the answer was filed on July 3, 1942, after the plan had been in operation since about May, 1941, and that on such existing contracts there was due from the various purchasers the total sum of about $300,000.
Other averments were as follows: "These defendants have no purpose or desire to engage in any practice whatsoever that might be subject to the slightest criticism, and they have ceased issuing such protective certificates, and it is their purpose not to issue any more of them." "Whatever certificates, if any, are hereafter issued and furnished to purchasers of lots in said cemetery, will be issued only by a duly licensed insurance company; and if the court approves of it, those purchasers of lots who have outstanding contracts, and who hold protective certificates issued by the West View Cemetery Association, will also be given certificates issued by such an insurance company, and the cost of such certificates will be borne entirely by the cemetery association."
"Further answering the petition, defendants show that they have made tentative arrangements with the Progressive Life Insurance Co., of Atlanta, a duly licensed, qualified insurance company doing business in the State of Georgia, to issue a noncancellable policy of insurance, which, in substance and effect, provides for insuring the life of each and every person who now holds a contract for the purchase of any lot in said section of said cemetery, and on which there remains any unpaid balance of purchase-money, and under the terms of which said insurance company will obligate itself to pay in money the equivalent of whatever unpaid balance there may be on any such purchase contract at the time of the death of such purchaser, and thus relieve the purchaser and his estate of any further liability on said contract, so that the title to the lot, or lots, covered by said contract will vest in the purchaser or his estate, in accordance with the terms of said purchase contract. Under said proposed contract a certificate will be issued to each such purchaser, which will in effect assure him of the protection hereinabove referred to.
"A copy of the said proposed contract, and of the certificate to be issued to each such purchaser, is hereby exhibited to the court; *Page 241 and if the court approves, then said contract will be entered into and become effective immediately."
At the interlocutory hearing the plaintiff introduced the petition and other evidence in support of its allegations. The defendants introduced their answer and a "proposed contract" between the cemetery association and Progressive Life Insurance Company, by which the lives of the various purchasers under the contracts then outstanding would be insured for the unpaid balances of the purchase-money, to insure payment to the cemetery association, "and also to relieve the purchaser and his estate of any further liability under such purchase contract in the event of death of such purchaser or purchasers, before the purchase-price shall have been paid in full." The contract as thus proposed would constitute a master policy to be held by the cemetery association as the designated beneficiary. It would be applicable, however, only to purchase and sale agreements under which "no payment is more than two months and five days in arrears," and provided also that it would remain in effect as to each individual until the happening of one of the following events: (a) completion of payments to the cemetery association by such individual purchaser; or (b) forfeiture of the insurance as to such purchaser by his default in payment of any installment of the purchase-money for a period of two months and five days. On basis of such master policy, a certificate would be issued to each individual purchaser, containing a promise on the part of the insurance company to pay the balance due on his contract in the event of his death before he had paid the same in full, provided there had been no default by him in the meantime for the period stated in the master policy. No particular form was submitted as to future purchases, except that it was alleged in the answer that if any form of certificate is furnished to future purchasers it will be issued by a duly licensed insurance company, and will serve to protect both the purchaser and the cemetery association as to the unpaid purchase-price.
After hearing the evidence and argument of counsel, the judge passed the following order: "This case having come on for interlocutory hearing, the court, giving consideration to the statements made by the defendants in their answer, and the court having confidence in the defendants that they will faithfully perform their promises contained in their answers, does not deem it necessary or *Page 242 proper to grant any interlocutory injunction. Therefore an interlocutory injunction is denied, and the restraining order is dissolved." The plaintiff excepted. The petition construed, as it should be, most strongly against the plaintiff did not present the contention that the basic contracts for purchase and sale of the cemetery lots or grave spaces would, if standing alone and without the protective certificates, constitute contracts of life insurance; but as to such contracts the only complaint was that the protective certificates that were issued in connection with them made them contracts of life insurance. While it was insisted in the brief that the original contracts of purchase and sale did within themselves contain the element of life insurance, a careful consideration of the record, including the judgment, convinces us that this question was neither presented by the petition nor decided by the trial judge. In this view, no decision can properly be made by this court as to the nature of the contracts of purchase and sale stripped of the protective certificates.
The judgment under review is one refusing an interlocutory injunction, and the question is whether the judge abused his discretion in such refusal. While it has been held that when the grant or refusal is based upon a question of law, the rule as to discretion does not apply, nevertheless it is apparent in this case that the judge merely decided that under the facts an injunction was not required pending final trial. "Injunction adinterim is a part of equity police. It is a device to keep the parties in order, and prevent one from hurting the other whilst their respective rights are under adjudication. There is often a cry for the police when there is no real danger. The equity of a bill is not lost because an injunction is denied, or because it is not applied for before the final hearing. Acts done pendentelite can not obstruct the court in granting an injunction properly moulded, or in decreeing other appropriate relief, in the end. Such acts may be brought into the bill by amendment, . . and parties will commit them at their peril." Kirtland v.Macon, 62 Ga. 747 (2), 750. "The truth is, that the purpose of an interlocutory injunction is wholly provisional; *Page 243 it is preliminary and preparatory; it looks to a future and final hearing, more deliberate, solemn, and complete than any which has been had; and while contemplating what the result of that hearingmay be, it by no means forestalls it, or settles what itshall be." National Bank of Augusta v. Printup, 63 Ga. 570,576. See also Georgia Pacific Railway v. Douglasville,75 Ga. 828 (2); First National Bank of Dublin v. ColonialFire Underwriters Insurance Co., 160 Ga. 166 (1 c) (127 S.E. 455); and compare, as to receivers, West v. Mercer,130 Ga. 357, 360 (60 S.E. 859).
As to the protective certificates, the defendants alleged in their answer that no more of them would be issued. As to the proposed new arrangement, under which the defendant association would obtain from a licensed insurance company a master policy insuring the lives of purchasers under existing contracts for sums equivalent to the unpaid balances of purchase-money, and on basis of such policy would cause a certificate to be issued to each purchaser, it appeared from the answer that the defendants did not intend to adopt this new plan unless it should be first approved by the court, and it does not appear that such approval has been given.
In the circumstances, the judge was authorized to find that the defendants would not in the future issue protective certificates of any character until further order of the court, and that an interlocutory injunction was therefore unnecessary.
Whether it might be assumed, under the pleadings and the evidence, that the defendants would, unless enjoined, continue to issue the same type of contract of purchase and sale minus the protective certificates, the petition, as we have stated, did not seek an injunction on this ground. The plaintiff did pray, however, that the defendants be enjoined from collecting further payments on the outstanding contracts, in connection with which the protective certificates had been issued, contending that in these circumstances the contracts of purchase and sale, considered with the protective certificates, constituted contracts of life insurance, and that the defendants in making such collections on past contracts would be continuing in the life-insurance business, without authority of law. As to the legal nature of the contracts as thus considered, compare Ga. L. 1937, p. 702, Ga. Code Ann. 1941, § 56-901; Benevolent BurialAssociation v. Harrison, 181 Ga. 230 (181 S.E. 829);Clark v. Harrison, 182 Ga. 56 (184 S.E. 620); SouthGeorgia *Page 244 Funeral Homes v. Harrison, 182 Ga. 60 (184 S.E. 875); s. c.183 Ga. 379 (188 S.E. 529); Harrison v. Tanner-PoindexterCo., 187 Ga. 678 (1 S.E.2d 646). Even though the plaintiff may be correct as to this matter, it does not follow that the defendants ought to have been enjoined from making further collections on the existing contracts.
According to the record, there are about eighteen hundred purchasers who would be affected, and none of them were made parties. Some or all of them may desire to enforce the contracts against the cemetery association; and if so, they are entitled to be heard on whether they may do so. As to such enforceability, see Towers Excelsior Ginnery Co. v. Inman, 96 Ga. 506 (23 S.E. 418); Jalonick v. Greene County Oil Co., 7 Ga. App. 309 (66 S.E. 815); Liverpool London Globe Insurance Co. v.Georgia Auto Supply Co., 29 Ga. App. 334 (2), 353 (115 S.E. 138); Strother v. Mutual Benefit Health AccidentAssociation, 49 Ga. App. 811 (176 S.E. 84); 13 Am. Jur. 816, § 768; 29 Am. Jur. 80, § 43.
Furthermore, on application for an ad interim injunction, there should be a balancing of conveniences and a consideration of whether greater harm might be done by granting than by refusing it. Everett v. Tabor, 119 Ga. 128 (4) (46 S.E. 72).
Under this principle, it has been stated that the public convenience and the rights of third persons may also be considered. 28 Am. Jur. 254, § 57; 32 C. J. 81-83, § 66.
The Code, § 55-108, declares: "The granting and continuing of injunctions shall always rest in the sound discretion of the judge, according to the circumstances of each case. The power shall be prudently and cautiously exercised, and except in clear and urgent cases should not be resorted to." Under the facts of the present case, it can not be said as a matter of law that the judge abused his discretion in refusing an interlocutory injunction.
Judgment affirmed. All the Justices concur.