Court Opinion

ID: 5353705
Source: CourtListenerOpinion
Date Created: 2022-01-08 06:51:38.575179+00
Date Added: 2024-06-11T08:29:45.994248
License: Public Domain

Adel, J.
(dissenting). The language of the policy is not obscure or ambiguous; and, indeed, its provisions are those required by statute. (Insurance Law, §§ 88 and 101.) That language or phrasing which the majority seems to deem ambiguous parallels the phrasing in the statute, for which manner of expression the insurer may not be held responsible. Section 88 is not controlling, because the policy was not issued by a domestic company (Cummings v. Phœnix Mut. Life Ins. Co. of Hartford, 250 App. Div. 336, 338), but the policy, nevertheless, conforms to the requirements of that section. Section 101 of the Insurance Law is applicable to the policy in suit, and it is apparent that the policy provisions conform to that section. The policy provides that upon default in payment of premium the insured is entitled to paid-up insurance in the amount that will be purchased by the “ surrender value as herein defined.” The formula, or method, of arriving at the surrender value is unavoidably expressed in terms that may seem technical or complex to the mind not ordinarily concerned with actuarial matters, but the constituent elements are plainly enumerated; and in clear, unambiguous language the policy provides that the surrender value is the full reserve, plus accumulations, “ less any indebtedness to the Company hereon or secured hereby.” Such value has been found to be eighty-five dollars and thirteen cents. The beneficiary, therefore, is entitled to the amount of paid-up insurance purchasable with eighty-five dollars and thirteen cents as the net single premium. This amount is $203.97, and has been tendered by the company. It is worthy of note that this method of computation, so clearly stated in the policy, is the precise method required by section 88 of policies issued by domestic companies.
If it is proper to read the loan assignment in conjunction with the policy there can be no doubt that the indebtedness is to come out of the cash surrender value before purchasing paid-up insurance. The agreement provides: “ In case of default in the payment of any premium or instalment thereof, on said policy, the Company may terminate said insurance, * * * and may deduct the indebtedness hereby secured from the amount which would otherwise be the surrender value of the policy, and apply the residue thereof, if any, to the purchase of paid-up or extended insurance.” Subdivision 8 of section 16 of the Insurance Law seems to provide that such agreement must be read with the policy. In Langley v. Prudential Ins. Co. (271 Fed. 776) it was said, assum*19ing the policy provisions to be ambiguous, “ the practical construction placed upon the contract by the parties when the loan was made will be accepted by the courts and is controlling here.” However, it is not necessary to read the loan agreement in conjunction with the policy in order to reach the conclusion indicated.
The order of the Appellate Term should be modified so as to provide that the amount set forth in the order and judgment of the City Court in favor of plaintiff be reduced to the sum of $203.97, with interest from November 1,1934, and as so modified affirmed.
Carswell, J., concurs.
Order of Appellate Term affirmed, with costs.