Court Opinion

ID: 8037572
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:22:43.32189+00
Date Added: 2024-06-11T16:37:11.766367
License: Public Domain

Paine, J.,
dissenting.
I respectfully dissent from the last opinion adopted by a majority of the court. This is a most difficult case. It was ■first argued to this court on April 4, 193Í), with five judges sitting, two of our number being disqualified.
The court failing to adopt an opinion by the vote of four of the five judges sitting, it was reargued on June 8, 1939, with District Judges Lightner and Landis sitting as members of the court, and an opinion was adopted, and released September 29, 1939, which is found in 136 Neb. 833, 287 N. W. 654, in which two members dissented, and in which •opinion a full discussion of the case will be found.
This opinion held: “A court of equity cannot grant relief against the clearly expressed condition contained in a valid ‘benefit thrift certificate’ issued by an insurance company, which provides that reinstatement of a lapsed certificate can only be had by the payment of past-due monthly instalments, with interest, within two years from the date the last payment became due.”
Later a rehearing was granted, and the third argument occurred December 4, 1939, and the decision of the case hinges on whether the contract is to> be considered as a thrift certificate or a life insurance policy, or contract. Let us examine the exhibits. On December 12, 1932, Dr. Gartner signed an instrument, at the top- of which, printed in large capital letters, were the words, “Application for Thrift *759Certificate.” On examination of the instrument he purchased, we find on the outside it is “No. 67136,” “Units Twelve,” “Increasing Benefit Thrift Certificate,” issued to Herman F. Gartner, and on the inside the largest letters at the top of this contract, except for the name of the company, are the words, “Thrift Certificate.” It seems rather surprising that, when intervener Gartner signed a written application for a “thrift certificate,” and received a “thrift certificate,” and is now bringing action on the “thrift certificate,” this court should find that he applied for, and received, and now holds, an insurance contract.
This thrift certificate did not agree to pay a certain specified sum of money at the termination of the ten-year period, but undertook to pay him the $120 he would have paid in on each unit, with interest on the sums paid in, and, as in all “thrift” certificates, agreed to pay him the distributive share of the money forfeited by unfortunate certificate-holders who had lapsed in making their payments, together with the interest accumulations thereon, being those who had allowed the two-year period of reinstatement provided in the certificate to go by without reinstating their contracts, and also to pay him “his proportionate share of all withdrawal values forfeited by beneficiaries who upon death of such member surrender the certificates for insured settlements,” together with “his proportionate share of all interest earnings compounded annually on all such withdrawal values forfeited by beneficiaries.”
Can it be argued that the owners of these lapsed thrift certificates, written on a plan which has been forbidden in many jurisdictions, and which are no longer written in Nebraska, are entitled to all the protection given, under our law, to the holders of bona fide life insurance policies?
It should be clear that, if the holder of a certificate calling for certain thrift certificate units died, his beneficiary could continue to make payments on the thrift certificate, but if the beneficiary needed funds and selected to accept the so-called “life insurance” settlement, the beneficiary would thereby'forfeit comparatively large sums of money, *760as hereinabove set out. It would be abhorrent in a life insurance policy to read that a beneficiary who wanted payment in cash would be compelled to forfeit a portion of the principal and also interest accumulations. There is no question that the insurance department would forbid the writing of such an insurance policy.
The basic idea from its very inception had been to sell thrift contracts in which the benefits from lapsed certificates profited those who continued to pay. Of this there should be no doubt. The fact that the plan was amended, and an attempt made to promote sales of these thrift certificates by adding a very slight, yearly renewable, term insurance feature, without planning for any reserve to protect it, and in which the beneficiary could in no event draw more than $150 on a unit in which the owner of such unit had paid in the full sum of $120 over a period of ten years, does not, in my opinion, exempt a certificate-holder from being bound by the two-year provision of the contract which he applied for and received. To permit him, after he has failed to reinstate within the two years provided in his contract, to now avail himself of the provision of law which g'overns and protects bona ficle life insurance policyholders, and to reinstate under certain conditions within three years, as set out in section 44-602, Comp. St. 1929, is in my opinion unjust and inequitable.
This litigation is carried on between two interveners. Dr. Gartner represents that small group which owns 1,876 certificates, representing 6,709 units, who have discontinued their payments, and have permitted their certificates to lapse under the terms of their contracts, and have not reinstated the same within the two years provided by their contracts. On the other hand, Dr. George J. Wagner, the appelleeintervener, represents in a way a large body of 7,824 certificate-holders, who have met every required payment according to the terms of their contracts, and now hold 40,708 units. It has always been my understanding of the law that, where there is no uncertainty as to the meaning of a contract, it will be enforced as made by the parties.
*761I believe that the decision of the trial court was right. The case was tried in the district court before J. H. Broady and E. B. Chappell, district judges, who rendered their decree, holding:
“(7) That intervener, Herman F. Gartner, failed to reinstate his said certificates within the time and in the manner provided by their express terms and that he lost all his rights thereunder and that his petition is without equity and should be dismissed.
“It is, therefore, by the court ordered, adjudged and decreed that intervener, Herman F. Gartner, and all other holders of certificates in Cosmopolitan Old Line Life Insurance Company similarly situated, who have permitted the reinstatement period of their said lapsed certificates to expire by failure' to make payments as required by the terms of their said certificates, have lost all rights under their said certificates and that their said certificates are null and void and that said petition of said intervener, Herman F. Gartner, on behalf of himself and all other certificate-holders similarly situated, is without equity and should be and the same hereby is dismissed. Objections of George J. Wagner sustained.”
Now, to the contrary of this holding, the effect of the majority opinion now adopted, as I view it, is to permit the few holders of lapsed thrift contracts to escape the two-year limit to reinstate, as provided by the contracts they purchased, and to allow them an extra year to reinstate, to the end that they can take from the faithful and diligent contract-holders who kept up every payment comparatively large sums of money specifically due the latter under the exact terms of their thrift contracts.