Court Opinion

ID: 9673803
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:18:43.779919+00
Date Added: 2024-06-11T18:16:24.223982
License: Public Domain

Osro Cobb, Justice, dissenting in part. I fully agree with the decision of the majority awarding all available proceeds of the Aetna Life Insurance policies to appellant, the wife and designated beneficiary in such policies. I respectfully dissent from that part of the majority opinion which permits Aetna to deduct from its settlement certain loans which had not been registered or endorsed upon subject policies, in accordance with the provisions of Section 7 of the policy contracts. Section 7 contains the following language: “A loan agreement satisfactory to the company shall be executed and sent with the policy to the Company at its Home Office. The Company will return the policy after proper endorsement.” (Emphasis supplied) I take the view that when Aetna, in the face of the quoted provisions of Section 7, supra, made loans without requiring the surrender of the policies and proper endorsement thereon as to the loans, it breached the clearly stated provisions of its own policy contract and waived its right to assert such loans as a deductible indebtedness against the policies. This is not to say that Aetna also waived its right to proceed against the estate of the deceased insured as a general creditor. See Subd. 2 of % 335 of Act 148 of 1959. The proceeds of the policy due the designated beneficiary could not be reached by creditors, same being exempted by statute. See § 66-3328, Arh. Stat. Aim. (.Repl. 1966). Our decisions must necessarily apply equally to all insurance companies, great ethical companies like Aetna and also the nefarious companies who employ sharp practices to defeat legitimate policy claims. The provisions of Section 7 of the Aetna policies, when complied with, benefit all concerned and deviation therefrom may result in much injustice, as in this case. Appellant knew from looking at the Aetna policies that same were encumbered by old .loans, the particular endorsement used by Aetna giving no date and no amount. Presumably, husbands and their wives work together in paying insurance premiums upon their separate or joint policies and appellant apparently ■ knew the principal amount of the prior loans against the policies. What she did not know was that additional loans were made while she was in complete possession of the policies. Herein lies the evil of the situation. Under the rule announced in the majority opinion, widows may no longer rely upon what the policy reflects upon its face. Indeed, when asserting her claim for the sum the policy purports to represent as due her, she may be astonished to be advised by the insurance company, whether honestly or fraudulently, that the funds have been absorbed by unendorsed loans to the insured. With the husband dead and unavailable to give testimony to refute false claims of such loans, the stunned beneficiary may become an easy victim. Moreover, an insured, with an eye for a dishonest dollar, could exhibit his policy free of loan endorsements and dupe innocent persons into relying upon his having a substantial cash equity therein, when in fact the equity had been depleted by unendorsed loans. The G-eneral Assembly might well consider amending Section 335 of Act 148 of 1959 so as to specifically limit policy loan deductions in settlement of policy obligations to those loans which have been duly and properly endorsed upon the policy itself, such endorsements setting forth the date and amount of such loans. This would obviate misunderstandings and possible fraudulent evasions in payment of just claims. It would keep all of the pertinent facts out in the open for the information and guidance of all concerned. It certainly would work no hardship upon the insurance companies. For the reasons stated, I respectfully dissent.