Edington v. Michigan Mut. Life Ins. Co.

• Decision Date: 16 November 1915
• Citation: 183 S.W. 728,134 Tenn. 188
• Parties: EDINGTON v. MICHIGAN MUT. LIFE INS. CO.
• Court: Tennessee Supreme Court

183 S.W. 728

134 Tenn. 188

EDINGTON v. MICHIGAN MUT. LIFE INS. CO.

Supreme Court of Tennessee.

November 16, 1915

Error to Chancery Court, Hamilton County; W. B. Garvin, Chancellor.

Suit by Mrs. Etta S. Edington, Administratrix, against the Michigan Mutual Life Insurance Company. To review a judgment for plaintiff, defendant brings error. Affirmed.

Littleton Littleton & Littleton, of Chattanooga, for plaintiff in error.

W. E Wilkerson, W. B. Miller, and W. L. Frierson, all of Chattanooga, for defendant in error.

NEIL C.J.

This action was brought to recover on a policy of $5,000 on the life of John S. Edington. Copy of bill and process were duly served on the defendant, but, failing to answer within the time allowed by law, an order pro confesso was taken, whereby all of the facts stated were, in the usual course, adjudged to have been admitted. Thereupon a decree was entered against the defendant for the full amount of the policy, less a loan of $580. Judgment was also rendered for a 25 per cent penalty under Acts 1901, c. 141. The aggregate balance thus found was $5,525. More than 30 days after the decree was rendered the defendant sought to set it aside, and along with application filed a copy of the policy. The chancellor declined to grant the relief sought, and thereupon the case was brought to this court on writ of error.

The first question to be determined is whether the bill makes a case, assuming to be true all the facts therein stated. It is insisted by the defendant that it does not.

What is the rule by which the bill should be construed? It should be at least as favorable as that which obtains when it is tested by demurrer or motion to dismiss. The rule in this latter class of cases is that the court makes every reasonable presumption in favor of the bill, and if upon critical examination of the facts stated there is a possibility that the action may be sustained the bill must be held good. It is the policy of the courts to give every complainant an opportunity to be heard on the merits of his case, when any equity whatever appears in the bill, although defectively stated. Gibson's Suits in Chancery, §§ 63, 371; State v. Standard Oil Co., 120 Tenn. (12 Cates) 86, 108, 110 S.W. 565.

The first point to be determined on the face of the bill is the date of the policy. The following allegations appear on this subject:

"On September 18, 1905, the said John S. Edington signed an application to the defendant, an insurance company, for a policy of life insurance in the amount of $5,000; and on the following day, September 19, 1905, he was examined by a physician employed by defendant as a medical examiner. Said application was signed and said medical examination had in Chattanooga. In due course, both said application and the report of said medical examination were forwarded to defendant's home office in Detroit, Mich.; and, after defendant had examined them and made such investigation as it desired, it issued and forwarded to its agent at Chattanooga the policy applied for. Complainant cannot state the exact date upon which said policy was issued and forwarded, but it was not earlier than September 22, 1905.

Complainants are unable to state the date which said policy bears, for the reason that, during his lifetime, said Edington borrowed money, as hereinafter more fully shown, on said policy, and as a consequence it is in the possession of the defendant. The defendant claims that it bears the date of September 17, 1905, which was one day before said Edington signed the application, and two days before his medical examination in Chattanooga. * * *

Said policy provided that defendant would, from time to time, make advances or loans upon said policy 'for a period ending on the next anniversary of the insurance.' Under this provision, the said Edington had, during his lifetime, borrowed from the defendant $580, which was due and payable, or subject to renewal upon the payment of one year's interest on September 22, 1914. The defendant held said policy as collateral to this loan, and still has the same in its possession, so that complainants cannot produce it. By said policy defendant, in consideration of a premium of $144, insured the life of said Edington for a period of one year, with the right in the insured to have said policy, at the expiration of said one year, converted into a contract of insurance for life by the payment of the sum of $144 on or before 12 o'clock noon on the first anniversary of the date of said policy, and the payment of a like amount on the same date of each succeeding year during 18 years, or until the death of said Edington."

At another place in the bill it is stated that the defendant claimed that the policy was dated on September 17th, and that, the premiums due on that day not having been paid on that day, it had lapsed. It is alleged that this claim constituted a mere subterfuge, whereby the defendant sought to avoid a just obligation.

We think, from these allegations of the bill, the 22d day of September must be treated as the inception of the insurance, and as the anniversary on which the premium was to be paid.

It is alleged that Edington paid premiums for nine full years in advance. This amount included the year 1913, and would carry the policy to noon of September 22, 1914, the day of Edington's death. It is alleged that he died in the early morning of that day; therefore the policy had not lapsed at the time of his death.

There are other allegations in the bill to the effect that, under the terms of the policy, it was not to take effect until the first premium was paid, and that this...