Court Opinion

ID: 5669940
Source: CourtListenerOpinion
Date Created: 2022-01-12 14:10:10.194366+00
Date Added: 2024-06-11T08:39:34.026666
License: Public Domain

McCurn, P. J. (dissenting).
In my view of it the attempted forfeiture was premature and therefore ineffective. The policy provides: ‘ ‘ Failure to repay a policy loan or premium loan, or to pay interest thereon, shall not avoid the policy unless the *109total indebtedness thereon including accrued interest shall equal or exceed the loan value at the time of such failure, nor until thirty-one days after notice has been mailed ” (emphasis supplied). The loan certificate provides: “ Second. That said loan shall bear interest at the rate of six per cent, per annum payable semi-annually on the first day of March and September in each year * * *; it being further agreed that in case said interest shall not be paid when due, it shall be added to and become a part of the principal of said loan ’ ’. Beading together the above-quoted provision of the policy and the loan certificate it clearly appears that the “ time of such failure ” so far as the policy loan and interest thereon is concerned is the time when the interest becomes due and is not paid, viz.: March 1st and September 1st. It is then added to the principal and then if the “ total indebtedness thereon including accrued interest ” equals or exceeds the loan value a forfeiture may result upon proper notice to the insured.
Here, the insured failed to pay the interest due on September 1, 1952, whereupon the company added the accrued interest to the principal of the loan in accordance with the policy provision. The total indebtedness did not at that time exceed the loan value. There was no requirement for any further payment or authorization to add accrued interest to the principal loan until the following March 1st when interest again became due. Failure to pay at that time would result in the interest again being added to the principal loan.
The company, however, on September 2d when no interest was due to be paid and consequently no failure to pay, added one day’s interest to the total indebtedness as established on September 1st thereby reaching a total of seventy-six cents over and above the loan value. The majority decision upholds the right of the company to add accrued interest day by day to determine whether the total indebtedness equals or exceeds the loan value and if so to thereupon declare a forfeiture by mailing to the insured the prescribed thirty-one days’ notice. The following provision of the loan certificate is relied upon to reach that result: ‘ ‘ Fourth. It is further expressly agreed that if at any time the total indebtedness against said policy, whether represented by this certificate or any other evidence of indebtedness, shall equal or exceed the then cash value of said policy, a default shall be deemed to have occurred in the repayment of said loan and said policy shall become void and no further liability shall exist thereunder ”. The loan certificate and the provisions of the policy should, of course, be read together. *110The language used by the company should be liberally construed in favor of the insured especially where a forfeiture is involved. I feel that the words 11 total indebtedness ” and “ at any time ” as used in paragraph “ Fourth ” of the loan certificate should be construed to mean, the amount of the loan plus interest which the insured has failed to pay at the time it became due as a result of which it has been added to the principal. In answer to the suggestion that such a construction results in causing the company to carry a loan when the policy is no longer ample security for the entire indebtedness it may be pointed out that the company, presumably experienced in such matters, failed to provide for that category when it issued the policy. The policy contained a provision that it constitutes the entire contract between the parties.
If the loan certificate is to be construed in accordance with the majority view, then it is clear from this litigation itself that the loan certificate has cut down substantial rights to which the insured was entitled under the terms of his policy. The company could not exact terms more burdensome to its insured than the terms set forth in the policy. If the loan certificate is to be so construed it is in my view of it unenforcible for lack of consideration. I am unable to discover any applicable decisions in the courts of this State but see New York Life Ins. Co. v. Shivley (188 Ark. 1044), Roeser v. National Life Ins. Co. (115 Pa. Superior Ct. 409), Walsh v. Aetna Life Ins. Co. (352 Pa. 429) and Senin v. Metropolitan Life Ins. Co. (153 Pa. Superior Ct. 658).
I dissent and vote for reversal of the judgments appealed from and for judgments in favor of the plaintiff.
All concur, except McCurn, P. J., and Wheeler, J., who dissent and vote for reversal and summary judgment in favor of the plaintiff in an opinion by McCurn, P. J., in which Wheeler, J., concurs. Present — McCurn, P. J., Vaughan, Kimball, Wheeler and Van Duser, JJ.
Judgment and order in each of the above-entitled actions affirmed, without costs of this appeal to either party.