Fed. Life Ins. Co. v. Maxam

• Decision Date: 22 November 1917
• Docket Number: No. 9327.,9327.
• Citation: 70 Ind.App. 266,117 N.E. 801
• Parties: FEDERAL LIFE INS. CO. v. MAXAM et al.
• Court: Indiana Appellate Court

70 Ind.App. 266

117 N.E. 801

FEDERAL LIFE INS. CO.

v.MAXAM et al.

No. 9327.

Appellate Court of Indiana.

Nov. 22, 1917.

Appeal from Circuit Court, Posey County; Hertis Clements, Judge.

Suit by Sylvester A. Maxam and another against the Federal Life Insurance Company. From a judgment for plaintiffs, defendant appeals. Judgment affirmed.

C. A. Atkinson, of Chicago, Ill., Sanford Trippet, of Princeton, and Larz A. Whitcomb, of Indianapolis, for appellant. T. Morton McDonald, of Princeton, for appellees.

FELT, J.

This is a suit by Sylvester A. Maxam against the Federal Life Insurance Company and Mary A. Maxam, for the damages alleged to have been sustained by Sylvester A. Maxam, hereinafter referred to as appellee, because of the wrongful cancellation or lapsing of a policy of life insurance issued upon his life in the sum of $2,500, payable to his wife, Mary A. Maxam, who filed an answer showing an assignment and transfer to appellee of whatever interest she had in the policy, or rights growing out of its cancellation.

The complaint was in one paragraph to which an answer in three paragraphs was filed by the Insurance Company. The first was a general denial, the second a plea of the six years' statute of limitations, and the third set up matter in bar of the action. A demurrer for insufficiency of facts was sustained to the third paragraph.

The case was tried by the court and upon due request the facts were found specially on which the court stated its conclusions of law which were in favor of appellee. Appellant's motion for a new trial was overruled, and judgment rendered on the conclusionsof law for $1,035.74 and costs. From this judgment appellant appealed and has assigned numerous alleged errors, including an assignment that the court erred in overruling the demurrer to the complaint, sustaining the demurrer to the third paragraph of answer, and in each conclusion of law.

Appellee contends that neither the complaint copied into the transcript nor the memoranda accompanying the demurrer are sufficiently identified by the record to enable the court to consider and pass upon any questions depending upon a consideration of these instruments. The identification is not free from doubt, but the court is warranted in treating the instruments copied into the transcript as the pleadings on which the case was tried, and inasmuch as practically the same questions arise on the exceptions to the conclusions of law as are attempted to be presented in relation to the complaint and answer, we believe the substantial rights of the parties may be determined by considering the questions raised by the exceptions to the conclusions of law and the assignments of error based thereon. Bright National Bank v. Hartman, 109 N. E. 846, and cases cited; Evansville Furniture Co. v. Freeman, 57 Ind. App. 576-581, 105 N. E. 258, 107 N. E. 28;Judy v. Jester, 53 Ind. App. 74-84, 100 N. E. 15.

The finding of facts states, in substance, that appellant is a corporation organized under the laws of the state of Illinois and authorized to transact the business of life insurance on the legal reserve plan; that the Model Life Insurance Company is a corporation organized under the act of March 9, 1897 (Laws 1897, c. 195) passed by the General Assembly of Indiana; that on April 21, 1900, the Model Life Insurance Company, hereinafter denominated the Model, issued to appellee a life insurance policy for $2,500 payable to his wife, Mary A. Maxam, which called for an annual premium of $58.82, and likewise at the same time issued to him a co-operative certificate by the terms of which, in consideration of the rendition of certain services, he was to receive a stipulated compensation, to be credited upon his annual premium; that on March 12, 1904, appellant and the Model entered into a certain written contract, pursuant to section 15 of the Act of March 9, 1897, by which appellant acquired all the assets of the Model, and undertook to reinsure all the policy holders of the Model, including appellee; that no written or printed notice was mailed to appellee at least 30 days before the day fixed for the meeting of the insured called to consider the contract of transfer or reinsurance aforesaid, and appellee had no notice or knowledge of such meeting prior thereto; that by the terms of the contract between said companies an attempt was made to authorize appellant to charge up as a lien against each of the policies held by the Model “an amount equal to the terminal reserve which should have accumulated to the credit of the respective policies” with stipulated interest charges thereon, and the right to charge against each of such policies an additional reserve lien annually from and after the date of such contract, amounting to the difference between the premium theretofore paid annually by any of such policy holders and the annual premium rate of appellant for a like policy to the age of entry of such policy holder, to bear 5 per cent. per annum from the day so charged until paid; that the provisions of such contract and those of the policy issued by the Model to appellee relating to the premiums to be paid are different and wholly inconsistent; that appellee was wholly ignorant of the provisions of the aforesaid contract between said companies, and did not become aware of them until about the 1st day of April, 1910; that on March 12, 1904, appellant issued to appellee a certain policy of reinsurance as follows: (The provisions of this instrument are identical with those of the one set out in 173 Ind. 615-616, 89 N. E. 398, 91 N. E. 230, and will not be repeated here.)

That appellant did not inform appellee of the provisions of said reinsurance contract in reference to liens until about the 1st day of April, 1910; that appellee made no inquiry of appellant, and did not attempt to ascertain the terms and conditions of the contract between said companies, but could have obtained full information in regard thereto had he made request therefor; that when appellant issued to appellee the aforesaid reinsurance policy for the purpose of inducing him to accept and retain the same and continue to pay premiums thereon, it represented to appellee, with intent to have him rely thereon, that appellant had reinsured and assumed the policies of the Model, including that of appellee, subject to the terms of the aforesaid contract, and that in accordance therewith it would continue appellee's policy in force by his “paying to it the premiums as and when required by the terms of said Model policy”; that appellee relied upon the aforesaid representations as true, and did not know the aforesaid contract purported to authorize the charging of the aforesaid liens against his policy; that he relied on the statements and representations aforesaid, and in pursuance thereof annually paid to appellant on or before the 21st day of April of each year the sum of $58.82, which was the full amount of premium due on the policy issued him by the Model; that appellant accepted the same and still retains the amount so paid; that appellant continually from the issuance of said reinsurance contract up to the 1st day of April, 1910, stated and represented to appellee and led him to believe that the full amount of annual premium due from him on said policy was $58.82; that on or about April 1, 1910, appellant notified appellee that the amount of his annual premium on said policy was $80.50 instead of $58.82, and that the same would be due on April 21, 1910; that on March 12, 1904, appellant, without appellee's knowledge or consent charged against his policy a reserve lien of $151.30, and has annually charged against the same 5 per cent. interest and has also in like manner annually charged against said policy a lien of $21.68 and 5 per cent. interest thereon; that when appellee was, on or about April 1, 1910, notified that his premium was $80.50 he requested an explanation, and was informed for the first time that appellant claimed to hold a lien against his policy in the sum of $357.20 which would have to be paid or would be deducted, with 5 per cent. interest per annum from his policy at maturity, and that to keep the policy alive he must pay $80.50 annually; that thereupon appellee refused to pay any further premiums on said policy and elected to treat the same as breached; that appellant insisted on its right to so charge and hold said liens against his policy, and refused to continue the same in force unless he recognized the existence and validity of said liens and would pay the increased premium of $80.50, and thereupon appellant declared the aforesaid policy of appellee lapsed by reason of the failure and refusal of appellee to pay said increased premium on or before April 21, 1910; that appellee was at that time 50 years of age and in good health; that at that time the usual and ordinary rate of annual premiums charged by reputable life insurance companies doing business in the state of Indiana “for a whole life participating policy of life insurance like the one held by appellee in the Model,” at age 50, was from $113.63 to $121.23; that at that time appellee's life expectancy was 21 years; that appellee has done and performed all the things required of him by his policy of insurance, the co-operative certificate, and by the policy of reinsurance issued to him by appellant; that neither of the policies aforesaid issued to him had any cash surrender value in April, 1910; that Mary A. Maxam, before the commencement of this suit, assigned to appellee, in writing, all her right and interest in, to, and under the aforesaid policies issued to appellee; that appellant has breached and broken the policy of insurance and policy of reinsurance aforesaid, and appellee has been damaged thereby in the sum of $1,035.74.

On the foregoing finding of facts the court stated conclusions of law in substance as follows: (1) That the acts of appellant in charging the aforesaid liens against ...