Court Opinion

ID: 3403888
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:16:54.991916+00
Date Added: 2024-06-11T13:42:54.703273
License: Public Domain

The controlling question here is whether the policy of insurance sued on was in force on November 28, 1939, the date of the death of the insured. And that question *Page 252 
is dependent on the antecedent question whether, under the provisions of the policy and the terms of the loan contract, the insured was required to pay the interest on the loan inadvance, on each anniversary date of the policy. Judge Gardner in the majority opinion states, in effect, that under theprovisions of the policy alone the insured was obligated to pay the interest on the loan annually in advance on the anniversary date of the policy, but that the subsequent loan agreement (which amounted to a supplemental contract) changed that provision of the policy, and provided merely that the interest should be paid annually on the anniversary date of the policy. And he citesState Life Insurance Co. v. Tyler, 147 Ga. 287 (supra), where the first headnote reads as follows: "A contract of life insurance, as expressed in the policy issued by a company to an individual, may be supplemented by a subsequent contract between the parties, expressed in a promissory note given by the insured to the insurer for a premium on the policy and providing for a termination of all rights under the policy for nonpayment of the note, although the policy contain no such provision." In that case the Supreme Court answered the following question certified to it by this court: "Can a forfeiture of a life-insurance policy be declared on the basis of a provision in a promissory note given for a premium on the policy, declaring that the policy shall be forfeited if the note should not be paid at maturity, the policy itself containing no such provision?" It appeared that the policy provided that nonpayment at maturity of any note given for the first premium should render the policy void, but contained no stipulation or reference to the taking of notes forother premiums. Thus it clearly appears that the note provided for a contingency that was not provided for in the policy, and the Supreme Court held that the stipulation in the note "was supplemental to the original contract expressed in the policy, and was valid." And in that case the Supreme Court said that "under such circumstances the policy and note should be considered together."
The case at bar is somewhat different from the case just discussed. Here, the policy clearly and distinctly provides that the interest on the loan should be paid annually inadvance on the anniversary date of the policy. The loan contract contains no new or additional or contradictory provision in respect to the paying of interest in advance. It merely says that the interest is to be paid *Page 253 
annually on the anniversary date of the policy. The policy says the same thing, but goes further and provides that not only is the interest to be paid annually on the anniversary date of the policy but it must be paid in advance. There is no contradiction between the provisions of the policy and those of the loan contract, and obviously the loan contract fails to set up a supplemental contract in that respect as the note in theTyler case, supra, did. The insurance contract and the loan contract were not separate independent contracts, but were as closely interlocked as the "Siamese twins." The loan contract was based upon the insurance contract and did not assume to set forth all the necessary provisions to make it a complete and valid contract. It relied largely upon the provisions of the insurance contract which were not directly referred to in the loan contract, and there was nothing in it to indicate an intent on the part of the insured or the insurer that any provision of the policy should be altered, varied, or modified by the terms of the loan contract. On the contrary, as shown by the stipulations of the parties in this case, the loan obtained by the insured was "secured by an assignment of the policy, and in accordance with the policy's requirements," and one of those requirements was that the interest on the loan was to be paid annually inadvance. The facts of this case are quite similar to those ofMissouri State Life Insurance Co. v. Bozeman, 48 Ga. App. 640
(supra); the only difference being that in the Bozeman case the charging of interest in advance was stipulated in both the policy and the loan contract. And in my opinion that difference under the facts of this case is immaterial. In the Tyler case, supra, the court held that since the policy was silent on the question there involved, and since the subsequent contract contained a clear and valid stipulation thereon, such stipulation was controlling. Applying that ruling to the facts of the instant case, in order for the insurer to have the right to charge interest in advance it was not necessary for it to insert that stipulation in both the policy and the subsequent loan contract. It was only necessary to insert it in either the policy or the loan contract, provided that if inserted in the policy only, the stipulation was not varied or contradicted by any provision in the subsequent loan contract. Here, the policy contained a clearly expressed, valid and unambiguous provision for the payment of interest in advance, and that provision was not varied, added to, or contradicted by any provision *Page 254 
of the subsequent contract, that contract being silent upon the subject of the payment of interest in advance. I think that in principle the decisions in the Tyler and Bozeman cases are controlling in this case and that a verdict for the insurer was demanded.
                        ON MOTION FOR REHEARING.