Bronson v. Northwestern Mutual Life Insurance Company
| Decision Date | 04 February 1921 |
| Docket Number | 10,687 |
| Citation | 129 N.E. 636,75 Ind.App. 39 |
| Parties | BRONSON v. NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY |
| Court | Indiana Appellate Court |
From Marion Superior Court (103,507); V. G. Clifford, Judge.
Action by Elmira Bronson against the Northwestern Mutual Life Insurance Company. From a judgment for defendant, the plaintiff appeals.
Affirmed.
Charles W. Miller and Henry M. Dowling, for appellant.
Baker & Daniels, for appellee.
Action by appellant against appellee to recover upon a policy of life insurance issued by appellee on the life of appellant's husband. The complaint was in four paragraphs, the substantial averments of the first paragraph being that on October 4, 1907, appellee executed and delivered to appellant's husband, hereinafter mentioned as the insured, its written policy of insurance on his life, wherein appellee, in consideration of the payment of $ 9.99 as a quarterly premium on or before October 4, January 4, April 4 and July 4 of each year during the continuance of the policy, agreed to pay to appellant as sole beneficiary named therein the sum of $ 1,000 upon receipt and approval of proof of death of the insured while the policy remained in force, the balance of the premium, if any, and any other indebtedness on account of the policy to be first deducted therefrom. From October 4, 1907, until October 4, 1915, the assured regularly paid all premiums called for, the last payment being made on October 4, 1915 which continued the policy in force up to and including January 4, 1916. On April 24, 1915, the assured, for the purpose of obtaining a loan from the appellee on the security of the policy, requested appellee to change the beneficiary therein named from appellant to the executors, administrators and assigns of the assured, and, pursuant to such request, appellee purported to make such change for the purpose aforesaid. On May 5, 1915, appellee loaned to the assured $ 150 at five per cent. interest per annum, taking what purported to be a written assignment of the policy which secured the loan, such assignment being signed by the assured and no other person. Immediately thereafter, at the request of the insured, the beneficiary was changed back to appellant, but it was expressly stated upon the face of the policy that the change was made subject to and without prejudice to the aforesaid assignment of the policy. The sole purpose of making such change and assignment was to effect a temporary and colorable change in such beneficiary in order to obtain such loan, which fact appellee knew, and also knew that such loan could not be so obtained so long as appellant was named as the beneficiary on the face of the policy. By reason of the facts aforesaid the change in beneficiary was colorable only, and without the knowledge and consent of appellant, and in violation of the laws of the state, and wholly void. Said policy was not legally assigned by said insured to appellee to secure said loan, which never became a lien or charge against said policy. According to the terms of the policy, if any premium was not paid when due, the same, without action on the part of the insured, became charged as an automatic policy loan at five per cent. interest, if the then loan value of the policy, including existing additions, would be sufficient to cover such loan in addition to any existing indebtedness and accrued interest. If the loan value or balance thereof should not be sufficient to pay the entire premium due, then it would be used, if sufficient, to pay the premium for the shorter period, but not less than an entire quarterly premium, and, if not sufficient to pay the quarterly premium, the policy would cease to be in force, and any residue of the surrender value of said policy would be paid in cash on the surrender thereof. The insured failed to make actual payment to appellant on January 4, 1916, of any sum as a premium in whole or in part, and, by virtue and operation of said automatic loan feature of the policy, the loan and cash surrender values of said policy as the same existed on January 4, 1916, were automatically applicable to the payment of the quarterly premium on said policy which fell due on that date. The loan surrender value of the policy on said date was not less than $ 161.07 against which there was no legitimate or proper lien or other charge, except the unpaid premium due on that date. Said $ 161.07, according to custom and practice of appellee, was then applicable to the payment of, and was more than sufficient to pay, the premiums on said policy up to and including April 4, 1915, and at least for one year thereafter. The insured died April 4, 1916, while said policy was automatically extended as aforesaid, and hence while the same was in full force, validity and effect. Appellee was notified, but wholly repudiated all liability under said policy and refused unconditionally and still refuses to pay the same or any part thereof. All the conditions of the policy to be performed by the insured or by appellant have been complied with. There was a demand for judgment in the sum of $ 1,200 and costs.
The second paragraph avers that in addition to the $ 161.07 surrender value of the policy there was due the further sum of not less than $ 10 as surplus dividend. It further avers the attempted assignment of the policy to appellee to secure the $ 150 loan, the amount of which, with interest quarterly, was $ 154.89, and no more; that on April 5, 1916, appellee by written notice to insured declared that the interest on said loan due May 5, 1916, would be $ 7.40, which it demanded on or before that date; that by reason of the foregoing there was in the hands of appellee on January 4, 1916, after deducting all proper charges against the policy, more than sufficient to pay the quarterly premium on said policy which came due on January 4, 1916, which thereby extended said policy to and including April 4, 1916; that it was the duty of appellee to make such proportion of the funds in its hands applicable to such policy as would pay such quarterly premium of that date, and continue such policy in force for three months thereafter; that by reason of the terms and appellee's duty such policy was automatically extended to and including April 4, 1916, on which date the insured died while said policy was in full force.
The third paragraph avers that after January 4, 1916, no premiums were actually paid by the insured, but that at no time prior to such death did appellee declare the policy forfeited, or so notify appellant that such forfeiture had been declared, and on April 5, 1916, with full knowledge of the assured's death, appellee sent through the United States mail to the insured a written notice and demand for payment on May 5, 1916, of the interest due on the loan; that by such notice appellee waived all forfeiture of the policy prior to the date of such notice, and demand for interest payment, and elected to consider such policy in full force, notwithstanding the fact that the quarterly premium falling due January 4, had not been paid, and that by reason of such facts the policy remained in full force until and including the death of the insured.
It is averred in the fourth paragraph of the complaint that the anniversary of such policy occurred on October 4, of each year in which it was in force; that the premiums were payable quarterly beginning with said anniversary date, and it was expressly stipulated that appellee would pay the face of said policy to the beneficiary named therein, the balance of the year's premium, and any other indebtedness on account of said policy being deducted therefrom, and that by reason of such provision the policy, after the first quarterly premium on the same had been paid on October 4, 1915, was thereby continued in full force, validity and effect until October 4, 1916, subject to the right of appellee, in the event of the death of the insured prior to October 4, 1916, to deduct from the proceeds of said policy all premiums for the policy year ending October 4, 1916, which had not been paid, together with any other indebtedness on account of said policy. The policy was by exhibit made a part of each paragraph of complaint. It was a nonforfeitable surplus sharing policy for $ 1,000 upon consideration of the payment of $ 9.99 on October 4, January 4, April 4, and July 4, of each year during its continuance. Appellant was named as the beneficiary subject to the right reserved to the insured to change such beneficiary.
So far as concerns this action, the policy provided: ...
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Bronson v. Northwestern Mut. Life Ins. Co.
...75 Ind.App. 39129 N.E. 636BRONSONv.NORTHWESTERN MUTUAL LIFE INS. CO.No. 10687.Appellate Court of Indiana, Division No. 2.Feb. 4, 1921 ... Appeal from ... S. Clifford, Judge.Action by Elmira Bronson against the Northwestern Mutual Life Insurance Company. Judgment for defendant, and plaintiff appeals. Affirmed.Miller & Dowling, of Indianapolis, ... ...