Rowell v. Georgia Casualty &Amp; Surety Company., 109 Ga. App. 631, 136 S.E.2d 917 (1964)

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Harris, Russell & Watkins, T. Reese Watkins, John C. Scarborough, Jr., contra.W. B. Mitchell, for plaintiff in error.

1. A suit cannot be maintained upon parol renewal of an insurance policy.

2. Under the provisions of Code Ann. 56-2420, a binder or temporary contract of automobile liability insurance may be executed in parol subject to the conditions enumerated in said Code section.

This was a suit to recover the amount of money expended by the plaintiff to settle two tort actions brought against him in the Superior Court of Crawford County, arising out of a collision on September 10, 1961, involving an automobile owned by the plaintiff which was allegedly insured by the defendant insurance company under a policy of automobile liability insurance. The trial court sustained the defendant's general demurrers to both counts of the plaintiff's petition and the exception is to that judgment.

1. "A suit cannot be maintained upon a parol renewal of an insurance policy." Nowell v. Mayor &c. of Monroe, 107 Ga. App. 77 (129 SE2d 80). It was alleged in the petition that the binder was to be effective from July 20, 1961, and the occurrence which constituted the basis of this action took place within 90 days of this date, within the provisions of Code Ann. 56-2420.

It is a settled principle of law that the time when an insurance policy shall become effective is an essential element of the contract, and that parties may fix a future date upon which it shall become effective, Boswell v. Gulf Life Ins. Co., 197 Ga. 269, 272 (29 SE2d 71); and we know of no authority for the proposition that such principle is inapplicable to binders or temporary contracts of insurance. While a binder has been defined as "a contract of insurance in praesenti [Emphasis supplied], temporary in its nature, intended to take the place of an ordinary policy until the same can be issued" (Fort Valley Coca-Cola Bottling Co. v. Lumbermen's Mut. Cas. Co., 69 Ga. App. 120, 124, 24 SE2d 846), the term "in praesenti" which means "at the present time" (Black's Law Dictionary, 4th ed., p. 899) was used in the Lumbermen's case to distinguish a binder or a temporary contract of insurance from a mere offer; and this case is not authority for the principle that parties to a binder may not fix a date in the future for said insurance to become effective, as contended by the defendant company. That a binder may become effective at a date other than that upon which it is executed is clearly anticipated by Code Ann. 56-2420 since it is expressly provided therein that no binder shall be valid more than 90 days from its effective date.

In answer to the further argument of the defendant insurance company that to allow an oral binder or temporary contract of insurance to be executed with a future effective date, which coincides with the expiration date of a pre-existing written policy of insurance, in effect and as a practical matter overrides or nullifies the principle of law which prohibits the parol renewal of a policy of insurance, we need only point out that such is the necessary operation of Code Ann. 56-2420, in a case such as this, if the plain and unambiguous language of said Code section is to be given effect as this court must do.

Count 2 of the petition stated a cause of action and the trial court erred in sustaining the general demurrer thereto.

Judgment affirmed in part; reversed in part. Bell, P. J., and Eberhardt, J., concur.

1964

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