Court Opinion

ID: 3829018
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:00:57.714324+00
Date Added: 2024-06-11T07:40:01.728798
License: Public Domain

The insurance company's petition for rehearing points out that Union Central Life Ins. Co. v. Williams, 65 F.2d 240, discussed in the original opinion, has been affirmed by the Supreme Court of the United States in 291 U.S. 170, 78 L.Ed. 711.
We have carefully considered the petition for rehearing, and the response thereto, and compared the above case with Great Southern Life Ins. Co. v. Jones, 35 F.2d 122, which latter case was followed by this court in the original opinion.
We observe that the Supreme Court of the United States, in its affirmance of the Union Central Case, did not overrule or criticise the opinion in the Great Southern Case, upon which we based our opinion, for the court said:
"In Great Southern Life Ins. Co. v. Jones, 35 F.2d 122, relating to a similar statute of Oklahoma, the policy provided for guaranteed 'premium reduction coupons' which were fixed liabilities requiring a reserve, and were not dividends in the proper sense as in the instant case."
We do not believe that the Supreme Court of the United States intended to narrow the limitation of "dividends" when used in the sense and for the purpose discussed in the authorities quoted from in our original opinion. "Not dividends in the proper sense as in the instant case" still leaves room for the premium reduction coupons to be regarded, for the particular purpose of our case under its own facts, to serve the samepurpose as dividends, regardless of whether they should be regarded as a qualified form of dividends. But the important part of the above quotation from the opinion of the Supreme Court of the United States is that such "premium reduction coupons" are "fixed liabilities requiring a reserve". That they are fixed liabilities cannot be denied, for each of the coupons is in effect a promissory note. Such definite "fixed liabilities" do not partake of the variable and uncertain characteristics of reserves and dividends. They were, from the very inception of the policy, a promise to pay a sum certain when the maturity date or dates should be reached, and were cashable if the insured continued the annual payments of premiums to the dates of the respective coupons, and the language of the Supreme Court of the United States, quoted above, is as susceptible of an interpretation that a valid distinction exists between the cases as it is susceptible of the interpretation that the Great Southern Case is in error.
A careful reading of the opinion of the Supreme Court of the United States reveals the tremendous importance placed upon the fact that the policy provided for the exact thing that happened; it provided, "or if the policy lapses, the dividend then shall be paid in cash." The provision in that case was plain and clear, its language left no room for doubt; every possible contingency was provided for. We have no such definiteness and certainty in the policy in the instant case. And in the Union Central Case it was carefully provided, in the policy, that there should be no extended insurance except and only on the basis of the policy's surrender value.
In the instant case the first of the three options afforded insured with reference to the premium reduction coupons is "The insured may use the amounts designated in the coupons hereto attached for the reduction of his premium payments from year to year." In the other two options the close relationship of the premium reduction coupons with the payment of premiums is noticeably evidenced; from the viewpoint of the company there can be no doubt that the prime purpose of incorporating this feature in their policy was to aid and encourage payments of premiums, and to use it whenever possible for that purpose.
It appears to us that if the Supreme Court of the United States intended placing its disapproval upon the Great Southern Case it would have used language to that effect instead of clearly indicating a distinction between the cases. *Page 486 
Another close connection between the premium reduction coupons, and the company's evident intention that they be used in all cases, where possible, in connection with the payment of premiums, is contained "In the following provision of the policy: "In case the insured shall pay all premiums in full, without coupon reduction, the unused due coupons shall be placed to the credit of the policy and shall be payable at any time. * * *"
The contention that the insurer had no right to apply the value of the coupons to the payment of premiums during the insured's life, and that if the insurance company had done so he could have objected, does not appear to us to be of much force, for the fact remains that he did not, during his lifetime, demand the cash value of the coupons and on his death the money was in the possession of the insurance company.
Looking at the whole situation from the viewpoint of common justice, there are certain outstanding uncontradicted facts which cannot be ignored. One of them is that up to the date of the insured's death he had, in one form or another, paid the insurance company more than enough to keep the policy in force.
Plaintiff in error also complains of the trial court's permitting plaintiff to recover the cash value of the coupons, in addition to extended insurance. We find that such was not the case; the amount required to purchase extended insurance to the date of the death was subtracted from the total value of the coupons, and the remainder constituted the judgment on that item. For all of the foregoing reasons, this court adheres to its original opinion herein.
McNEILL, C. J., OSBORN, V. C. J., and RILEY, WELCH, CORN, and GIBSON, JJ., concur. BUSBY, J., absent. BAYLESS, J., disqualified.