Equitable Life Insurance Company of Iowa v. Horner

• Decision Date: 29 September 1932
• Docket Number: 14,462
• Citation: 182 N.E. 463,97 Ind.App. 347
• Parties: EQUITABLE LIFE INSURANCE COMPANY OF IOWA v. HORNER ET AL
• Court: Indiana Appellate Court

182 N.E. 463

97 Ind.App. 347

EQUITABLE LIFE INSURANCE COMPANY OF IOWA v. HORNER ET AL

No. 14,462

Court of Appeals of Indiana

September 29, 1932

Rehearing denied February 2, 1933. Transfer denied July 29 1933.

From Wayne Circuit Court; Gustave H. Hoelscher, Judge.

Action by Harold Leroy Horner and another against the Equitable Life Insurance Company of Iowa. From a judgment for plaintiffs defendant appealed.

Affirmed.

Harlan & Brown and Phineas M. Henry, for appellant.

Fred B. Pickett, for appellee.

OPINION

KIME, P. J.

This was a suit by appellee to recover on a life insurance policy issued by appellant to the deceased son of appellees on October 20, 1925, wherein the appellees were beneficiaries. The amount alleged to be due was the face value of the policy, $ 1,000.00 plus interest. Payment of premium for four years was alleged, as was the lapse or default on October 30, 1929, for non-payment of premium and the death of the insured on September 7, 1930.

The appellant demurred for want of facts. This was overruled; then followed a refusal to plead further and a finding and judgment for appellees.

The error relied upon for reversal is the overruling of the demurrer.

The question presented is whether or not there should have been granted automatically upon the default extended term insurance under the provisions of section 9036, Burns Ann. Ind. Stat. 1926, being the Acts of 1909, ch. 95, sec. 5, cl. 10.

Section 5 of this act is as follows:

"From and after July 1, 1909, no policy of life insurance shall be issued or delivered in this state by a life insurance company organized under the laws of this state, unless the same shall provide the following:

Clause 10 is as follows:

"That in the event of the default of premium payment after premiums have been paid for not less than three years, the insured shall be entitled to the extended insurance shown in the table of values and options for the end of the last year for which full annual premiums shall have been paid: PROVIDED, That any unpaid note given for premiums and any existing indebtedness to the company on account of or secured by the policy shall reduce the amount or term of such extended insurance in the ratio of such indebtedness to the net value of such extended insurance: and, PROVIDED, That the policy may be surrendered to the company at its home office within one month from the date of default for a specified cash value at least equal to the sum which would otherwise be available for the purchase of extended insurance as aforesaid: and, PROVIDED, FURTHER, That the company may defer payment for not more than six months after the application therefor is made. This provision shall not be required in term insurance of twenty years or less."

The policy in question contained the following provisions:

"If, after the payment of premiums for three full years or more, default is made in the payment of a subsequent premium, this policy shall, upon such default, without action on the part of the insured, continue as paid-up non-participating insurance of a reduced amount payable at the same time and under the same conditions as this policy; or

EXTENDED TERM INSURANCE.

"Upon written application of the insured and assignee, if any, and the presentation of this policy at the Home Office for endorsement, within three months after the date of such default, the Company will continue the face amount of this policy and any outstanding paid-up additions thereto, less any indebtedness hereon to the Company, as non-participating extended term, insurance without the right to loans, counting from the due date of the premium in default. The extended term insurance as defined in (b) above, may be made the automatic non-forfeiture option by endorsement hereon pursuant to a written request of the insured and assignee, if any, filed at the Home Office of the Company while no premium is in default.

"The amount of the automatic paid-up insurance under provision (a) or the term of the extended insurance under provision (b) shall be such as the cash value of this policy and of any existing paid-up additions less any indebtedness hereon to the Company will purchase as a net single premium on the basis of the American Experience Table of Mortality with interest at the rate of 3 1/2% per annum."

The appellant contends that this is a substantial compliance with the statute and that all the insured had was a right to demand or claim extended insurance. Appellant further contends in effect that "entitled" means "is available." In other words the insurance is available to the insured if he complies with other provisions of the policy.

The first paragraph of Section 4 of the Act of 1909 gives the necessary explanation of the difference in the meaning of "entitled" and "avail." This paragraph says certain "insurance companies may reincorporate and avail themselves of the provisions of this act by complying with conditions." This is the interpretation appellant seeks to put upon the word entitled. They say that the insured may avail himself of extended insurance by complying with conditions they lay down.

The appellees contended below that the statute in question makes the extended insurance provision automatic in case of default and the lower court sustained that contention. This in effect gives to the word "entitled" the meaning of "having title to."

Analyzing the statute we find it says, "no policy of life insurance shall be issued or delivered . . . unless the...