Court Opinion

ID: 5339396
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:49:19.215676+00
Date Added: 2024-06-11T08:29:32.555971
License: Public Domain

Per Curiam.
Plaintiff, the beneficiary under a $5,000 life insurance policy issued by defendant on the life of her husband, sued to recover double idemnity provided for therein, by reason of his death as a result of an automobile accident. A quarterly premium of seventeen dollars and-fifty cents became due December 9, 1929, *141with thirty days’ grace thereafter for payment, all previous premiums having been paid. On December 11, 1929, the insured received a check from the defendant for thirty-two dollars as the result of an application previously made for a maximum loan. The check was accompanied with a printed and written statement, reading
in part:
u Company’s check................................ $32 00
Annual premium due.............................
Total new loan................................ $32 00.”
The insured died on March 1, 1930.
Under subdivision 7 of section 101 of the Insurance Law the defendant was required to deduct from the loan to which the-insured was entitled the premiums to the end of the policy year, or fifty-two dollars and fifty cents. According to the terms of the policy and the agreement of the parties for quarterly premium payments, any “ indebtedness ” due the company at the time of making a loan should have been deducted. This indebtedness was a quarterly premium of seventeen dollars and fifty cents, payable December 9, 1929.
If the requirements of the policy, or of the Insurance Law, had been complied with, and there had been a deduction of the quarterly premium or the premiums for the balance of the policy year, the policy would have been in full force on the day of the death of the insured.
In our opinion, the insured, when he received the check for the loan of thirty-two dollars, had a right to assume that the quarterly premium due December ninth had been deducted. If the Insurance Law had been strictly complied with, no loan would have been made, because the unpaid premium for the balance of the policy year totaled fifty-two dollars and fifty cents, or more than the loan value of thirty-two dollars, and it must be assumed that if the loan had been refused the insured would have paid the quarterly premium of seventeen dollars and fifty cents due December 9, 1929, within the grace period of thirty days thereafter. Inasmuch as the defendant, a foreign corporation, is authorized to do business within this State, the provision of the Insurance Law above referred to is •controlling, regardless of the terms of the policy (Ins. Law, § 101, last ¶; People v. Metropolitan Surety Co., 211 N. Y. 107; New York Life Ins. Co. v. Dodge, 246 U. S. 357), and under that law the defendant was required to deduct from the loan value “ any unpaid balance of the premium for the current policy year; ” and the law further provides that the insurer may collect *142interest in advance and may defer a loan for not to exceed six months. It is clear that the insured did not intend to let the policy lapse at the end of any quarter, and he had a right to rely upon strict compliance by the defendant with the terms of the policy and the Insurance Law. It follows, therefore, that the policy had not lapsed at the time of the death of the insured on March 1, 1930.
The judgment should be affirmed, with costs.
Lazansky, P. J., Tompkins and Johnston, JJ., concur; Davis, J,, with whom Hagarty, J., concurs, dissents and reads for reversal and for dismissal of the complaint.