Opinion
40768.
DECIDED JULY 16, 1964.
Action on insurance policy. Stephens Superior Court. Before Judge Smith.
McClure, Ramsay Struble, Robert B. Struble, for plaintiffs in error.
R. Wilson Smith, contra.
The trial court did not err in sustaining the general demurrer and in dismissing the petition.
DECIDED JULY 16, 1964.
Horace Andrews, L. D. Andrews, A. G. Andrews. and Mrs. Nettie Andrews Harrison sued Georgia Mutual Insurance Company to recover on a policy of fire insurance in the face amount of $3,000, covering a described frame dwelling which was alleged to have been totally destroyed by fire while the policy was in full force and effect. The policy sued on, a copy of which was attached to the petition, was a Georgia standard fire insurance policy which contained, among its other provisions, the following words: "Other Insurance. Other insurance may be prohibited or the amount of insurance may be limited by endorsement attached hereto."
Attached to the policy as a part thereof was a rider, entitled "Farm Property Form," containing the following clause: "Other Insurance — Unless otherwise provided in writing added hereto, other insurance covering on any property which is covered under this policy, is prohibited. If, during the term of this policy, the Insured shall have any such other insurance, whether collectible or not, and unless permitted by written endorsement added hereto, the insurance under this policy, on which other insurance exists, shall be suspended and of no effect."
Insofar as pertinent to a decision here, the plaintiffs alleged in count 1 of their petition that at the time of the loss they held another policy of fire insurance in the amount of $3,000, on said dwelling, issued by Cotton States Mutual Insurance Company after the policy here sued on was issued; that, through oversight and inadvertence, the defendant was not notified of the additional insurance and written permission for such additional insurance was not secured from the defendant; that, nevertheless, the dwelling was reasonably worth $7,000 at the time it was destroyed and thus was not overinsured; that the provisions of the rider above quoted are void and of no effect as the same are repugnant to the laws of the State of Georgia and especially Georgia Laws 1960, pp. 289, 741, and § 56-3201 of the Code of Georgia, as amended, and in conflict with the standard fire insurance policy as promulgated by the insurance Commissioner of the State of Georgia.
The pertinent parts of count 2 of the plaintiffs' petition allege: "That the defendant has retained the annual premiums for said fire insurance paid by petitioners, and has failed to tender the annual premium back to petitioners, and by virtue of said fact, defendant is estopped to assert that said policy is void, suspended or of no effect and by virtue of retaining said premium defendant has waived any right to assert or claim that said policy is void, suspended or of no effect."
The defendant's general demurrer to each count of the plaintiffs' petition was sustained, and the petition was dismissed. The plaintiffs excepted.
1. Chapter 56-24 of the present Insurance Code is applicable to all insurance policies. Code Ann. § 56-2402 provides: "`Policy' means the written contract of or written agreement for or effecting insurance, and includes all clauses, riders, endorsements and papers attached or issued and delivered for attachment thereto and a part thereof." Code Ann. § 56-2419 provides: "Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application made a part of the policy." "`Insurance contracts are governed by the same rules of construction or interpretation, for the purpose of ascertaining the intention of the parties, as apply to other contracts. Code § 56-815; Golden v. National Life Accident Insurance Co., 189 Ga. 79 (2), 87 ( 5 S.E.2d 198, 125 ALR 838). Where the terms and conditions of an insurance policy are unambiguous, the court must declare the contract as made by the parties. Penn Mutual Life Insurance Co. v. Marshall, 49 Ga. App. 287 (1) ( 175 S.E. 412). Where the meaning is plain and obvious, it should be treated as literally provided therein. Daniel v. Jefferson Standard Life Insurance Co., 52 Ga. App. 620 (2) ( 184 S.E. 366).' Genone v. Citizens Ins. Co. of N. J., 207 Ga. 83, 86 (1) ( 60 S.E.2d 125)." Queen Ins. Co. v. Nalley Discount Co., 215 Ga. 837, 838 (1) ( 114 S.E.2d 21). Code Ann. § 56-3201 provides in part: "No policy of fire insurance covering property located in Georgia shall be made, issued or delivered unless it conforms as to all provisions and the sequence thereof with a standard or uniform form prescribed by the [Insurance] Commissioner, . . ." The plaintiff concedes that the standard form or fire policy prescribed by the Insurance Commissioner contains the clause quoted in the statement of facts, but contends that the provisions of the rider or endorsement attached to the policy sued upon with respect to the prohibition against other insurance is null and void and against public policy. We do not agree with this contention. The word "prohibit" means to "forbid by authority." 34 Words Phrases 458, and cits. It would render meaningless the language contained in the standard policy to the effect that "other insurance may be prohibited by endorsement" to hold that such endorsement prohibiting other insurance could not carry with it the "authority" to enforce its provisions by providing for forfeiture of the policy for violations of such prohibition. The rider or endorsement which forms a part of the policy is not prohibited by law, is not in conflict with any provision required to be included in the policy, is unambiguous, and is a part of a binding contract between the parties to the policy. When the plaintiffs procured fire insurance from Cotton States Mutual Insurance Company in violation of the provisions of the policy sued upon, such action by the plaintiffs nullified and abrogated the policy in question.
2. The plaintiffs contend in count 2 of their petition that the defendant has retained the annual premiums paid by them to the defendant for the policy sued upon, and that therefore the defendant is estopped to assert that it is not liable to them because of the loss of the house covered by the policy. The plaintiffs' petition shows that the defendant did not of its own accord elect to cancel the policy in question. but that the policy was rendered void and ineffective, and the plaintiffs' right to hold the defendant liable for the loss was forfeited by the action of the plaintiffs in procuring additional insurance in violation of a provision of the policy sued upon. This fact distinguishes this case from Genone v. Citizens Ins. Co. of N. J., 207 Ga. 83, supra, relied on by the plaintiffs in error in support of their contention that count 2 of the petition stated a cause of action. Assuming, however, that the situation involved in this case is a cancellation of the policy rather than a forfeiture, there is nothing in the provision of the standard policy relating to cancellation which renders a return of the premium a condition precedent to cancellation. The standard policy provides, with respect to cancellation, beginning with line 56 and through line 67 thereof, that the premium shall be refunded upon demand, whether the cancellation be by the insured or by the insurer. The petition fails to allege any demand for the return of the unearned premiums, and the defendant is not estopped to deny its liability on the policy because of any failure to refund the premiums.
The trial judge did not err in sustaining the general demurrer to the plaintiffs' petition.
Judgment affirmed. Felton, C. J., and Pannell, J., concur.