Court Opinion

ID: 3219836
Source: CourtListenerOpinion
Date Created: 2016-07-05 15:56:43.425763+00
Date Added: 2024-06-11T13:35:19.614359
License: Public Domain

The contention of appellee is that the provision in the certificate of indebtedness, providing as it contends, for compound interest, is like unto the way of holiness, so plain that "wayfaring men, though fools, shall not err therein" [Isaiah 35:8]. This contention is refuted by the facts. Able counsel has devoted pages of typewritten brief to support that contention; while opposing counsel — seasoned lawyers of long experience in the active practice, and as sanguine as he — contend that it does not so provide; and after full and painstaking consideration of the question in general conference, the Justices of this Court, some of whom have been dealing with the law of contract for more than a half century, have not been able to reach a unanimous conclusion in the interpretation of the writing. Appellee concedes however that if the writing is susceptible to two interpretations that most favorable to insured must prevail. We, therefore, adhere to our views as expressed in the opinions heretofore promulgated.
Much might be said in answer to the fallacious argument that a paid-up policy of life insurance has no market value, and hence a pledge of such choses in action to secure the repayment of loans is not within the influence of our statutes or the common law dealing with the foreclosure of pledges, although the statute expressly applies to "all banking, insurance, and other corporations, private bankers, brokers, and other persons engaged in the business of making discounts or lending money, or taking or receiving a collateral for a loan or discount, if demanded, must give to the borrower, or to his agent or attorney, a receipt," etc. Code 1940. T. 9, § 9. And sections 11 and 12 provide for notice of foreclosure.
The writer deems it sufficient to say that the history of life insurance and its development refutes that argument. It is recognized everywhere that a natural person has unlimited insurable interest in his own life, and as observed by Mr. Justice Holmes of the Supreme Court of the United States more than a quarter of a century ago, "Life insurance has become in our day one of the best recognized forms of investment and self-compelled saving." Grigsby v. Russell, 222 U.S. 149,32 S.Ct. 58, 59, 56 L.Ed. 133, 36 L.R.A., N.S., 642, Ann.Cas. 1913B, 863.
And this court has treated such property as assets of a bankrupt's estate subject to public sale and the purchaser may acquire the policy and the right to mature it, and eventually recover the money due on such policy, though the insured comes to his death at the hands of the law. See Weil v. Travelers' Insurance Co., 16 Ala. App. 641, 80 So. 348, for history of the policy, and for result of the litigation, Ex parte Weil,201 Ala. 409, 78 So. 528.
Such paid up policies are regarded as good security in banking circles and acceptable as pledges for loans of money, and as observed by the Kentucky Court in New York L. Ins. Co. v. N. L. Curry  Bro., 115 Ky. 100, 72 S.W. 736, 738, 61 L.R.A. 268, 103 Am.St.Rep. 297, "there is no perceivable reason why the insurance company lending the money is, or can be, in a different position from any other lender of the money had the policy been assigned to the latter as collateral, and a default in payment of the interest had occurred. If it loans money on its policies held by its policy holders, its rights as lender are exactly what they would be if, instead of the policies, the borrower pledged stocks, bonds, or policies in other companies, or gave a chattel or real estate mortgage to secure the loan. There is nothing in appellant's business, or charter rights, so far as we are advised, which entitles it to privileges, when loaning its money not enjoyed generally by banks, trust companies, and other corporations and individuals." 18 A.L.R. 1149.
                              On Rehearing.