Court Opinion

ID: 5623770
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:45:43.474044+00
Date Added: 2024-06-11T08:37:31.704682
License: Public Domain

Guerry, J.
I am unable to concur in the majority opinion in this case. The whole question presented for determination in this ease is whether on the date of January 38, 1933, the actual cash value of the policy equalled the amount of the loan then due. As was held by this court in the case of Hammond v. Volunteer State Life Insurance Co., 47 Ga. App. 472: "The stipulation in the paid up policy of life insurance and the loan agreement, providing for what amounted to a method of foreclosure after the prescribed notice, by cancellation of the policy and the application of its value to payment of the loan when the past due principal with interest thereon equaled or exceeded the cash value of the policy, was valid, and did not contravene public policy or amount to confiscation or to an agreement for exaction of a penalty for nonpayment of the indebtedness, since, under the contractual procedure, the insured realized the full amount of his rights and interest in the policy at the time of the cancellation.” (Italics ours.) On January 38, 1933, no interest was due on the loan of $651, the interest having been deducted in advance to that date at the time of the making of the loan. The note provided that, "failure to repay any loan hereon, or to pay interest will avoid this policy if the total indebtedness hereon to' the company equals or exceeds the then cash value, but not otherwise. [Italics mine.] In such event this policy will become void thirty-one days after the company shall have mailed notice to that effect to the last known address of the insured and the assignee of record, if any.” On January 38, 1933, it appears that there was due the insured a cash dividend of $9.58. It does not appear that this sum was sent to the insured or that he was given any notice of the amount due him in dividends, at the time, or in the correspondence notifying him in reference to the forfeiture of the policy. The insured died March 10, 1933, and after the company received notice of his death a cheek for $9.58 was mailed to his beneficiary. From an inspection of the policy it appears that a definite fixed amount was specified and named each year up to the 30th year; the policy at such time becoming a paid-up policy, as being the cash-surrender value, or the cash-loan value upon which loan interest was to be deducted in advance. After the policy became paid up its loan- or cash-surrender value was determined by the same arbitrary standards. On January 38, 1933, the cash loan value on said policy amounted under such policy to $651. In addition thereto *648there was due the insured the sum of $9.58 as dividends, and therefore the actual cash value of said policy was $651 plus $9.58 dividend. The amount of the loan thereon was not equal to the actual then cash value as prescribed in the loan note and agreement. It will be noted in the Hammond case, supra, that Judge Jenkins calls attention to the fact that there were no cash dividends due on the policy in that case. Further attention is called to the fact that repeated notices were given the insured and this language is used: “Especially would the rule here stated have application where the insured, after oft-repeated notice, makes no effort to pay the indebtedness, or, after cancellation, fails to accept the insurer’s offer to reinstate the policy.” An examination of the record in the Hammond case, will disclose that the insurance company offered to accept small notes payable monthly for the past-due interest and enclosed a note embodying such terms, to which offer the insured made no reply. The insured in this case lived in Danville, Georgia, R. F. D. No. 3, and died within ten days after the alleged avoidance of his policy, with an amount still due him from the company of a sum more than twice sufficient to have paid the interest on his loan up to that date. I have no dissent as to the law cited in the majority opinion. In 14 R. C. L. 952, it is stated that a provision for the forfeiture of a policy because of failure to pay principal or interest on loan, where the loan exceeds or is equal to the cash-surrender value is valid. “The surrender -value, however, is the actual value, and not such value as the insurer may arbitrarily fix.” Under the evidence in this case, on January 28, 1932, the actual value of this policy was $960.58 and the loan was only $951 and inasmuch as this dividend was not sent to or accepted by the insured but was retained by the company until after his death and the amount due on the loan on March 10, the date of the death, did not equal the actual value of the policy, no forfeiture was worked and the insurance was in effect and the beneficiary was entitled to recover. I am therefore of the opinion that the judgment of the lower court 'is correct and should be affirmed.