Columbian Mut. Life Assur. Soc. v. Whitehead, 4-4518.

• Decision Date: 08 February 1937
• Docket Number: No. 4-4518.,4-4518.
• Citation: 101 S.W.2d 455
• Parties: COLUMBIAN MUT. LIFE ASSUR. SOC. v. WHITEHEAD.
• Court: Arkansas Supreme Court

101 S.W.2d 455

COLUMBIAN MUT. LIFE ASSUR. SOC. v. WHITEHEAD.

No. 4-4518.

Supreme Court of Arkansas.

February 8, 1937.

Appeal from Columbia Chancery Court; Walker Smith, Chancellor.

Suit in chancery by Felix E. Whitehead against the Columbian Mutual Life Assurance Society. From a decree overruling the defendant's demurrer to the complaint, the defendant appeals.

Reversed, and cause remanded, with directions to sustain demurrer.

Stevens & Stevens, of Magnolia, for appellant.

McKay & McKay and Whitley & Utley, all of Magnolia, for appellee.

SMITH, Chief Justice.

Appellee is insured under appellant's life, health, and accident policy, by the terms of which he is entitled to stipulated loan values. Appellee applied to appellant for a loan and it was refused whereupon suit was filed in chancery. A demurrer to the complaint was overruled and appellant declined to plead further.

After finding what amount appellee was entitled to receive as a loan the decree recites that: "Defendant is hereby ordered, upon plaintiff's request for the proper blanks for making a loan, to furnish plaintiff with same, and when plaintiff properly executes said blanks and delivers them duly executed * * * to make the loan."

Appellant is a foreign corporation. When the policy of insurance was issued to appellee in August, 1920, appellant had been admitted to do business in this state. Summons was served on the commissioner of insurance. There is no showing that appellant maintains any office in the state, of that any of the corporation's executive officers are within the jurisdiction of the court.

We are of the opinion that, under the pleadings, specific performance will not lie. "An agreement to borrow a sum of money and give security for it cannot be specifically enforced; and this is also true of an agreement to lend money, whether on security or not." 58 C.J. p. 1055. "As a general rule specific performance will not be enforced of an executory agreement either to borrow or lend money." 25 R.C.L. p. 231.

Annotations at page 895, 4 A.L.R. are as follows: "Provisions giving the insured a right to borrow on the policy after a certain number of premiums have been paid are now commonly found in life insurance policies. This right in many instances is a potent factor in inducing the taking of a policy. It is a part of the contract, and the insured is entitled to loans in accordance with the conditions stated in such provisions, and clearly has the right to maintain an...