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Action on automobile policy. Before Judge Paschall. Whitfield Superior Court. April 5, 1954.
1. Where, as here, in an action to recover the proceeds of an automobile-insurance policy covering collision and upset, the defendant insurer pleaded and proved that it had an option under the terms of the policy either to repair the truck or pay the loss in money, and that the plaintiff insured, on the basis of an estimate and guarantee to repair given by an automobile repair company, signed a release for the amount stated in the estimate less the $100 deductible provision in the policy, in which he averred that the amount stated represented the total loss sustained, directed the insurance company to pay over such amount to the company undertaking the repairs on his truck, and, in consideration of the payment of such amount to such company expressly released and discharged the insurance company of all further liability (no actionable fraud in the transaction being alleged or proved) payment by the insurer of the amount as directed constituted execution by it of the contract of release. Proof of these facts established an accord and satisfaction between the parties constituting a complete defense to the defendant insurer on an action subsequently brought by the insured, regardless of the fact that the automobile repair company had in fact failed to repair the automobile in a satisfactory manner.
2. "Where it is sought to set aside a written instrument which is a full contract of release from all further claims, and not merely a receipt, parol evidence is inadmissible to vary or alter its terms."
3. Errors in admission or exclusion of evidence which would in no event alter or affect the outcome of the case are harmless and do not require reversal.
H. F. Owens filed an action in the Superior Court of Whitfield County against Service Fire Insurance Company of New York, setting out that the defendant was the insurer of a certain truck belonging to the plaintiff, the policy of insurance covering collision and upset; that while the policy was in full force and effect the plaintiff suffered damage by reason of an upset of the truck, in the sum of $700; that the defendant, instead of paying the plaintiff for the loss, attempted to have the truck repaired, which was not done, and that, after a delay of a number of weeks, the defendant finally refused to have the truck properly repaired or to settle with the plaintiff for the loss. The petition sought rental for loss of use, penalty and attorney's fees by reason of bad faith. A copy of the policy of insurance was attached which contained the following under "Settlement Options--The company may pay for the loss in money or may repair or replace the automobile or such part thereof, as aforesaid."
The defendant answered, alleging that the parties had fully settled. Exhibits attached to the answer included the following: (1) a repair estimate of Lambert Motor Company, containing the following: "The undersigned agrees to complete and guarantee repairs listed on sheets 1 at a total price of $442.54, including all towing & storage charges incidental thereto. The insured will pay $100"; (2) a proof of loss form executed under seal by the plaintiff, showing the amount of damage covered under the policy to be $342.54, and containing the following stipulations: "The undersigned hereby expressly agrees that the total loss or damage occurring on the date indicated above [November 17, 1952] for which claim is made as set forth in the undersigned's statement of loss bearing the date shown as Item 3 [November 25, 1952] above, to automobile covered by the above described policy, is the amount shown as Item 4 [$342.54] at the top of this instrument . . . In consideration of the payment of the above amount by the Service Fire Insurance Company of New York, the undersigned hereby agrees to release and discharge the Service Fire Insurance Company of New York from any and all liability under its policy for said loss and/or damage, and the undersigned further agrees to hold the Service Fire Insurance Company of New York, its successors or assigns, free and harmless from further claim for the loss described . . . In witness whereof, the undersigned has executed and sealed this instrument on the date shown above as Item 6 [November 25, 1952]. H. F. Owens (L.S.)". Immediately below, under the heading in bold-face print: "Insured's Release and Directions as to Payment of Proceeds of Adjustment" is the following: "The undersigned hereby directs the Service Fire Insurance Company of New York to pay over to Lambert Motor Co., Dalton, Georgia, $342.54, the amount indicated above as Item 4 and agrees that such payment shall fully discharge and release the said insurance company from any and all claims arising out of the described loss. In witness whereof, the undersigned has executed and sealed this instrument on the date shown above as Item 6. H. F. Owens (L.S.)." Also attached as an exhibit to the answer was the canceled check of the defendant insurance company to Lambert Motor Co., marked "Paid, 12/11/52". No demurrers were filed to the petition or answer. Upon the trial the documentary evidence above set out was admitted in evidence. The evidence further showed that the truck had never been properly repaired, had remained with Lambert Motor Company for several months, and had never been accepted by the plaintiff after repairs were made.
The court directed a verdict in favor of the defendant. The plaintiff appeals to this court by direct bill of exceptions in which error is assigned on the direction of the verdict and on the admission and exclusion of certain evidence.
Counsel for the plaintiff insists that because the policy of insurance provided that the company might either pay the loss in money or repair the automobile, at its option, and because they had done neither in a satisfactory manner, and the money having been paid at the direction of the insured to Lambert Motor Company, this resulted in the insured receiving no benefit (the truck not having in fact been properly repaired) from the subsequent agreement and the same was without consideration. Code 20-302 provides as follows: "A consideration is valid if any benefit accrues to him who makes the promise, or any injury to him who receives the promise." "A consideration need not be a benefit accruing to the promisor", but may be a benefit accruing to another. Porter Fertilizer Co. v. Brewer, 36 Ga. App. 329 (136 S. E. 477). It follows therefore that there was a consideration for the release given by the plaintiff to the defendant, in that the defendant suffered injury thereby to the extent of paying out $342.54, the amount of money agreed upon between the parties as representing the total damage to the plaintiff's truck less the $100 deductible, and that a benefit resulted to Lambert Motor Company who received this sum upon the direction of the plaintiff. The plaintiff also received another direct benefit from this agreement and release, which was the guarantee of Lambert Motor Company to complete all repairs listed on the estimate sheet prior to the plaintiff's turning his truck over to them for repair. Accordingly, the cases cited by the plaintiff (Herrington v. Herrington, 70 Ga. App. 768, 29 S. E. 2d 516; Bruton v. Wooten, 15 Ga. 570; Carlton v. W. & A. R. Co., 81 Ga. 531, 7 S. E. 623; Richmond & Danville R. Co. v. Walker, 92 Ga. 485 (1), 17 S. E. 604), to the effect that an accord and satisfaction is a contract and must be based on a valid consideration, do not apply here, as there was a consideration of $342.54 for the release. The policy contained an option either to "pay for the loss in money" or to "repair the automobile." Of course, if the automobile were properly repaired, the loss would be the amount it cost to make the repairs. The plaintiff and defendant agreed upon this amount, based upon the estimate of the garage and its guarantee to make the stated repairs for the stated sum. Had the plaintiff at this point accepted the sum directly, had he himself taken the truck to the garage and paid over to that company the amount of the settlement, he could not be heard to complain that the insurance company had failed to live up to its contract if the repairs were thereafter not properly made. Instead of paying over the sum directly, he directed the insurance company to pay it over for him, and expressly provided that such payment by them would be an unconditional release of their liability to him. This agreement was executed by the defendant by payment of the money as directed. Accordingly, those cases which hold that a subsequent agreement founded upon no new consideration will not amount to an accord and satisfaction unless the new agreement is itself executed (Parker v. Pender, 174 Ga. 579, 163 S. E. 506; Kennedy v. Maddox, 15 Ga. App. 684, 84 S. E. 153; Atlanta Life Ins. Co. v. Walker, 53 Ga. App. 80, 184 S. E. 776), have no application here, for the new agreement constituting the release was in fact executed. The case of Patterson v. Ramspeck & Green, 81 Ga. 808 (4) (10 S. E. 390) has no application to the facts here, that case holding merely that a defense seeking to set out that, after a note became due, the creditor agreed with the debtor for no new consideration, that it might be paid in a manner other than that called for by the instrument. Such an agreement would of course be without consideration.
As stated in Pennsylvania Casualty Co. v. Thompson, 130 Ga. 766, 769 (61 S. E. 829): "The fact that the consideration for which the claim was settled was less than the full amount the plaintiff, under the proofs furnished by him, would be entitled to receive, would not affect the validity of the release." See also Smith v. Ga. R. & Bkg. Co., 131 Ga. 470 (62 S. E. 673); Blalock v. Millers National Insurance Co., 67 Ga. App. 469 (1) (21 S. E. 2d 131); Farmer v. Bankers Health & Life Ins. Co., 69 Ga. App. 105, 109 (24 S. E. 2d 831); Howard v. Georgia Home Ins. Co., 102 Ga. 137 (1) (29 S. E. 143). The plaintiff here having executed a release in full for an amount agreed by him to cover all liability of the defendant under its policy of insurance, and the defendant having paid over the amount stipulated in accordance with the directions of the plaintiff (in which connection see Maloof v. George, 22 Ga. App. 82 (1) 95 S. E. 310), and there being no contention that there was any fraud involved such as prevented the plaintiff from investigating and determining for himself the amount of his damage, or from reading and understanding the contents of the instrument which he signed, a verdict was demanded in favor of the defendant, and the court did not err in so directing it. In view of what has already been pointed out herein, the transaction consisting of the signed release and the facts and circumstances surrounding it can hardly be construed to constitute an election on the part of the insurance company to "repair the automobile" instead of "to pay for the loss in money." Had the election been to repair the automobile, it would have been the duty of the insurance company to take complete charge of the truck, have it repaired, and deliver it back to the policyholder in its repaired condition. A failure in this respect would render it liable under the terms of the policy. The transaction must be construed as an election on the part of the company "to pay for the loss in money"; that the parties agreed that the loss was the amount shown by the estimate of Lambert as the cost of repairs, and that payment to Lambert of this sum as directed by the insured constituted a satisfaction of the obligation of the insurance company under the terms of its policy.
In Crow v. Bowers, 204 Ga. 786 (2, 3) (51 S. E. 2d 855) it is held as follows: "Where it is sought to set aside a written instrument which is a full contract of release from all further claims, and not merely a receipt, parol evidence is not admissible to vary or alter its terms. Walters v. Odom, 53 Ga. 286, 289; Southern Bell Telephone &c. Co. v. Smith, 129 Ga. 558 (59 S. E. 215); Pennsylvania Casualty Co. v. Thompson, 130 Ga. 766 (61 S. E. 829); Jewell v. Norrell, 66 Ga. App. 11 (4) (16 S. E. 2d 797). Where a liquidated debt, upon which there is no dispute as to the amount due, is agreed to be settled for less than its face value and the settlement is consummated by the payment of the amount agreed upon and the execution and delivery of a writing stating that it is 'a release from all further claims', this is an accord and satisfaction and an extinguishment of all liability therefor by the debtor. Code 20-1204; Tarver v. Rankin, 3 Ga. 210; Brown v. Ayer, 24 Ga. 288; Tyler Cotton Press Co. v. Chevalier, 56 Ga. 494 (5); Burgamy v. Holton, 165 Ga. 384 (3) (141 S. E. 42); Collier v. Mayflower Apartments, 196 Ga. 419 (2) (26 S. E. 2d 731)." In Rivers v. Cole Corporation, 209 Ga. 406 (73 S. E. 2d 196) it was held as follows: "When a creditor receives and retains a sum of money from his debtor less than the amount actually due him with the understanding, either express or implied, that it is received by him in satisfaction of his claim or demand, he cannot thereafter treat it as a nullity and recover the balance, and this is so whether his claim or demand be disputed or undisputed, liquidated or unliquidated; but this rule does not apply where the contract is executory and must be enforced in a court of law. Code 20-1204." As has already been seen, the release agreement in this case was executed. It follows that the papers so admitted were proper to show the terms of the written agreement, and that the parol evidence was inadmissible to alter or vary its terms. There is no merit in these assignments of error.
3. The remaining objections assigned as error in the bill of exceptions are that the court required the plaintiff to answer a question as follows on cross-examination: "And you told him, 'I want the repairs made at Lambert Motor Company,' didn't you?", and also that the court allowed a witness to testify that another company was supposed to do $100 worth of work on the frame, and that they took it and straightened it. It does not appear that these rulings, even if they should have been erroneous, worked any harm upon the movant, since they would have in no event affected the propriety of the court's directing the verdict against him. Accordingly, no reversible error is shown. Ginn v. Carithers, 14 Ga. App. 298 (2) (80 S. E. 698).
The trial court did not err in directing a verdict in favor of the defendant.
Judgment affirmed. Gardner, P. J., and Carlisle, J., concur.
Pittman, Hodge & Kinney, H. E. Kinney, contra.
Adams & McDonald, for plaintiff in error.
Saturday May 23 03:46 EDT

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