Wolfe v. Breman

MacIntyre, J. The defendant contends that there was no *817 consideration for his agreement to pay the plaintiff the $600 in question. “Slight consideration is sufficient to sustain a contract, and courts' of law will not look closely into its adequacy. Forbearance to prosecute a legal claim, and the compromise of a doubtful right, are both sufficient considerations to support a contract.” Austell v. Rice, 5 Ga. 472 (2) (3). It is not essential that the person to whom the consideration moves should be benefited, provided the person from whom it moves is in a legal sense injured. The injuries may consist of a compromise of a disputed claim which is not necessarily a valid claim, but a compromise of a bona fide controversy (the good faith is generally a question for the jury), or forbearance to exercise a legal right; the alteration in position being regarded as a detriment that forms a consideration independent of the actual value of the right forborne. Hume v. Davison-Paxon Co., 57 Ga. App. 289, 292 (195 S. E. 318). The widow, Mrs. B.reman, alleges that the final settlement and compromise by which she withdrew her objections in her intervention, in which she contended that the annuity during her life, or so long as she remained a widow, was not in compliance with her husband’s will that she was to have “installments arising from the conversion of $30,000 of life insurance into 20 installments certain,” was done at the request of the defendant, and that she did not seek to have the executors purchase the annuity in the Mutual Life Insurance Company of New York, which she was very anxious for them to do because she had been associated with that company for over 16 years; that she did not oppose the executors purchasing from the defendant, as agent of the Union Central Life Insurance Company, which was, in so far as she was concerned, an annuity during her life or so long as she remained a widow. All of which was done at the request of the defendant. She further alleged that said annuity was accordingly purchased from the Union Central Life Insurance Company through the defendant’s agency. The defendant acknowledged in writing his previous promise to pay petitioner $600. All of this together, we think, was a forbearance of a legal right by the widow, and constituted a consideration to support the promise by him to pay the $600. Rector &c. of St. Mark’s Church v. Teed, 120 N. Y. 583 (24 N. E. 1014). The consideration consisted in the forbearance of the widow to exercise a legal right, or at least what she bona *818 fide believed to be a legal right, to insist that the executors purchase for her the “20 installments certain,” as directed in her husband’s will, and accept instead an annuity for life, or widowhood. And we might say that the alteration in position of the widow by accepting as a compromise said annuity having in effect been alleged as a detriment, would form a consideration independent of the actual value of the right forborne. Rector &c. v. Teed, supra. Whether the widow would have succeeded in the litigation by having her intervention sustained is not the test. It is enough that she yielded the right she had to contest the right to receive from her husband’s estate “the 20 installments certain” as directed in his will. The consideration, even if it did not rest upon any advantage to the defendant, but only upon the abandonment by the, widow of her position as a contestant, would nevertheless be sufficient, for she had relinquished what she bona fide believed to be a right secured to her by law, and she did so at the request of the defendant, who promised to pay her for it. We think there was a consideration for the defendant’s promise to pay the $600. The defendant contends that even if there was a consideration for the contract, the promise to pay was a rebate and was, therefore, not collectible under the law. The Code, § 56-218, provides: “No insurance company or insurance agent doing business in this State shall enter into any contract to rebate any insurance premium or any part thereof of any insured or other person.” One who does so is guilty of a misdemeanor under the provision of the Code,^ 56-9903. “In insurance rebates are deductions from stipulated premiums allowed in pursuance of antecedent contract.” 36 Words & Phrases, 424. “Annuity has been defined in general terms as technically a yearly payment of a certain sum of money, granted another in fee for life or years, but in a broader sense as a fixed sum granted or bequeathed and payable periodically, but not necessarily annually, subject to such specific limitations as to duration as grantor or donor may, lawfully impose. . . Insurance, as generally understood, is an agreement to indemnify against loss in case property is damaged or destroyed by fire, or to pay a specified sum upon the death of the insured or upon his reaching a certain age. An annuity is generally understood as an agreement to pay a specified sum to the annuitant annually during life. The *819 consideration for an insurance contract is generally spoken of as a premium, which is payable annually, semi-annually, monthly, or weekly. The consideration for an annuity contract is not generally regarded as a premium, and is usually covered by a single payment.” 3 Words & Phrases, 494. The creating of annuities by deed and will is of ancient origin. “The granting of annuities by corporations upon consideration paid is a more recent practice. 11? appears to have been engaged in first by insurance companies to which it is largely confined at the present day. It is essentially a form of investment, and uniformly held to be purely such, regardless of the fact that in its usual form payments are contingent upon continuity of the life of the grantee. In some forms of annuity, not even this contingency qxists. The fact of the existence of such contingency is held not to bring it within the classification of insurance, which generally speaking, is indemnity for loss suffered from some risk. In a broad and general sense investment may be said to have the same objective. The uncertainties arising from a constantly changing business and economic world involve an infinite variety of risks, security or insurance from which men constantly seek through investment of various kinds. But this is not the character of insurance or risk which is connoted in the business of writing insurance policies. The terms have a more narrow and restricted meaning. For many years there has been an evergrowing tendency of life insurance companies to encroach upon the field of investment by loading their policies with an increasing variety of purely investment features. This fact, however, does not affect the character of a contract made by an insurance company as to whether it is insurance vel non, nor does it broaden the definition to include as insurance that which is not in fact properly so classified. An interesting and instructive discussion of this subject is found in Ellison v. Straw, 119 Wis. 502, 97 N. W. 168, 170. In that case the question was whether payments due the insured under a tontine policy were life insurance within the meaning of exemption of Wisconsin. We quote from the opinion: ‘Life insurance is one thing, investment is another, but the ingenuity of the life insurance companies in formulating contracts which confuse the distinction has been active for generations. Puye life insurance has become rare, except with beneficial associations; but the gradations from that contract, with some *820 slight provision for accumnlation of dividends, to contracts where the accumulation is the predominant, if not even the exclusive, purpose, are almost numberless. Life insurance is a promise to pay a certain sum upon the death of the assured. Tennes v. Ins. Co., 26 Minn. 271, 3 N. W. 346; Talcott v. Field, 34 Neb. 611, 52 N. W. 400; Shakman v. U. S. Credit System Co., 92 Wis. 366, 66 N. W. 528, 32 L. R. A. 383, 53 Am. St. Rep. 920. Doubtless the amount so payable may be augmented by accumulation of excessive premiums and their earnings in the hands of the company without destroying the essential character of the contract. When, however, we find, as frequently, a promise to repay a sum made up from a portion of the premiums and their earnings at a date certain in the lifetime of the assured, we have only a contract such as a savings bank may as well make.” ' Daniel v. Life Insurance Co. (Tex. Civ. App.), 102 S. W. 2d, 256, 260. Thus, it seems to us, that an annuity contract may be granted by an insurance company or any other corporation or individual for a certain period. Carroll v. Equitable Life Assurance Society, 9 Fed. 2d, 223, 224. Generally speaking, life insurance is a provision for death, while an annuity is a provision for life. “The typical case of life insurance is found when a person insured pays annually during his life a stipulated sum to an insurer in consideration of which the insurer engages to pay on the death of the insured a lump sum to a beneficiary. The typical case of an annuity is found where a purchaser pays down a lump sum to a grantor, who engages himself to pay a beneficiary during life a stipulated sum annually.” Daniel v. Life Insurance Co., 102 S. W. 256, 258, supra. In the instant case the money collected by the executors from the insurance policy of the husband was converted into an investment commonly known as an annuity, payable in monthly installments so long as the widow lived or remained a widow. The insurance contract or policy was separate and distinct from the annuity contract. The mere fact that the will directed that the money obtained from the insurance policy was to be invested in an annuity did not so intermingle the two as to make it impossible to separate them or to make one indivisible contract. The insurance contract or policy and the annuity contract did not become component parts, which were so welded together by the will as to merge them into one whole indivisible contract, the nature of *821 which was an insurance contract or policy. Here the executors of the deceased husband and not the widow, were to pay for the annuity. The allegations of the petition do not show that the purchasers of the annuity, the executors, were to receive back any part of the lump sum paid by them for the annuity. The widow was paying nothing for the annuity, and the executors, so far as the petition shows, paid no regular premiums, but paid one single lump sum, and at no time received any deductions or “drawbacks” or “abatement” from the defendant as a rebate, or otherwise. We might call attention again to Daniel v. Life Insurance Co., supra, where it was said: “The consideration for an annuity contract is not generally regarded as a premium and is usually covered by a single payment.” Hence, we think that under the allegations of the petition, assuming them to be true as we must do on demurrer, the promise of the defendant to pay the widow $600 was enforceable; that it was based on a consideration, and was not a contract to rebate an insurance premium or any part thereof directly or indirectly at the instance or in behalf of the insurer, which is prohibited by statute in this State. , The judge did not err in overruling the demurrers to the petition. Judgment affirmed. Broyles, O. J., and Gardner, J,, concur.