Golightly v. New York Life Ins. Co

• Citation: 186 Miss. 598,191 So. 111
• Decision Date: 02 October 1939
• Docket Number: 33806
• Court: United States State Supreme Court of Mississippi
• Parties: GOLIGHTLY et al. v. NEW YORK LIFE INS. CO

191 So. 111

186 Miss. 598

GOLIGHTLY et al. v. NEW YORK LIFE INS. CO

No. 33806

Supreme Court of Mississippi, Division B

October 2, 1939

APPEAL from the chancery court of Hinds county HON. V. J. STRICKER Chancellor.

Suit by R. H. Golightly and another against the New York Life Insurance Company on a life insurance policy. From a decree dismissing the bill, plaintiffs appeal. Affirmed.

Affirmed.

Alexander & Satterfield, of Jackson, for appellants.

The surrender charge cannot be deducted from the full reserve in arriving at the sum which under this policy shall be used in purchasing extended insurance.

N Y. Life Insurance Company v. Blaylock, 144 Miss 541, 110 So. 432; Lamar Life Insurance Company v Minor, 154 So. 542, 170 Miss. 222; Section 5171, Mississippi Code of 1930; Bene v. N.Y.Life Insurance Co., 87 S.W.2d 979; N.Y.Life Insurance Company v. Boling, 177 Miss. 172, 169 So. 882.

Section 7953, Pope's Digest of Laws of Arkansas, in Vol. 2, Page 2076 is identical with Section 5171 of the Mississippi Code of 1930.

The Supreme Court of Arkansas has never passed upon the objection to a surrender charge here advanced and hence the Mississippi rule must govern.

Morris v. Dunn, 43 S.W. (2nd) 77; Springfield v. Fulk, 131 S.W. 694; Sec. 5171, Miss. Code of 1930; Sec. 7953, Code of Arkansas; Texarkana Special School District v. Consolidated School District, 46 S.W.2d 631; Cooper v. Freeman Lumber Co., 32 S.W. 494; Aetna Insurance Co. v. Commander, 153 So. 877, 169 Miss. 847; N.Y.Life Insurance Co. v. Shivley, 69 S.W.2d 392; Travelers' Protective Ass'n of America v. Stephens, 49 S.W.2d 364; American National Insurance Co. v. Chavey, 50 S.W.2d 245; Federal Life Insurance Co. v. Pearrow, 86 S.W.2d 1106.

The reasoning and principles of law upon which the Boling case is based are supported by the weight of authority in the United States.

Carter v. Mutual Benefit Life Ins. Co., 161 So. 446; Williston on Contracts (1936), pages 119 to 131, inc.; 6 R. C. L. 648; Jerome Hardware Lumber Co. v. Beaumont Lumber Co., 247 S.W. 1059; Houston & Texas Central Railway Co. v. Mitchell, 38 Texas 85; Southwest Pipe Line Co. v. Empire Natural Gas Co., 33: F. (2d) 248, 64 A.L.R. 1229; Buckmaster v. The Consumer's Ice Co., 5 Dailey (N. Y.) 313; United Press Co. v. New York Press Co., 53 L.R.A. 288, 164 N.Y. 406; Varney v. Ditmars, 111 N. E. (N. Y.) 822; Arundel Realty Co. v. Maryland Electric R. Co., 38 L.R.A. (N.S.) 157; IngramDay Lumber Co. v. Rodgers, 105 Miss. 254, 62 So. 230.

Louis H. Cooke, of New York City, and Watkins & Eager, of Jackson, for appellee.

All pleadings will be construed most strongly against the pleader.

Hart v. North American Ins. Co., 154 Miss. 400, 122 So. 471; Merchants & Manufacturers' Bank v. Busby et al., 160 So. 577, 172 Miss. 394; N.Y.Indemnity Co. v. Myers, 161 Miss. 784, 138 So. 334; Sharp v. Learned, 181 So. 142, 182 Miss. 333; State, Use of Stanton, v. Junkin, 159 So. 107, 172 Miss. 225; Universal Film Exchanges, Inc. v. West, 141 So. 293, 163 Miss. 272; Westbrook v. McCarthy, 160 Miss. 455, 134 So. 193.

The case involves an Arkansas statute, and the law of Arkansas will control.

Aetna Ins. Co. v. Mount, 90 Miss. 642, 44 So. 162, 15 L.R.A. (N.S.) 471; Couret v. Conner, 118 Miss. 374; Equitable Life Assurance Society, etc. v. Weil, 103 Miss. 186, 60 So. 133; Great Southern Life Ins. Co. v. Burwell, 12 F.2d 244, cert. denied 271 U.S. 683, 70 L.Ed. 1150; Interstate Life & Accident Co. v. Pannell, 169 Miss. 50, 152 So. 635; Mississippi Central R. Co. v. Smith, 173 Miss. 507; Partee v. Sillimann, 44 Miss. 272; Price v. Hardy, 142 Miss. 584; Protective Life Ins. Co. v. Lamarque, 177 So. 15; Pullman Palace Car v. Lawrence, 22 So. 53, 74 Miss. 782; Sec. 5196, Miss. Code of 1930; Swing v. Brister, 40 So. 146, 87 Miss. 516; Welch v. Kroger Grocery Co., 177 So. 41; Western Union Telegraph Co. v. Jennings, 110 Miss. 673, 70 So. 830.

The full faith and credit clause of the Constitution of the U.S. would require the application of the law of Arkansas to the policy sued on, and the Fourteenth Amendment to the Constitution of the U.S. would prevent the application of the Mississippi statute.

Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 169, Miss. 196, 150 So. 205, 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, 92 A.L.R. 928; John Hancock Mutual Life Ins. Co. v. Yates 299 U.S. 178, 81 L.Ed. 106.

Under the statutes and decisions of the State of Arkansas, the surrender charge was properly deducted.

Atlantic Life Ins. Co. v. Pharr, (C. C. A. 6), 59 F.2d 1925; Atlantic Life v. Pharr, 59 F.2d 65; Bene v. N.Y.Life Ins. Co., 191 Ark. 714; Bostock v. Life Insurance Company of Virginia, 93 F.2d 556; Brown v. Mutual Life, 195 S.E. 552; Bryant v. Mutual Benefit Life Ins. Co., (Tenn.), 109 F. 748; Carter v. Mutual Benefit Life Ins. Co., (Ala.), 161 So. 446; Darby v. Equitable Life Assur. Society, (La.), 79 So. 329; Davis v. Mutual Life Insurance Co. (Mo.), 119 S.W.2d 488; Devitt v. Mutual Life, 22 A.L.R. 1915, 183; Erickson v. Equitable Life Assurance Society, (Minn.) 258 N.W. 736; Fidelity Mutual Ins. Co. v. Oliver, 71 So. 302, 111 Miss. 133; Gilley v. Mo. State Life, (Tex.), 273 S.W. 825; Inter-Southern Life Ins. Co. v. Zerrell, (C. C. A. 8) 58 F.2d 135; Kurth v. National Life, 79 S.W.2d 339; Life Ins. Co. of Va. v. Sluss (Ind.), 11 N. E. (2d) 500; Moss v. Aetna Life Ins. Co. (C. C. A. 6) 73 F.2d 339; Neal v. Columbian Mutual Life Assurance Society, 138 So. 353, 161 Miss. 814; Pilot Life v. Owen, 31 F.2d 862; Williams v. Union Central Life Ins. Co., 291 U.S. 169, 78 L.Ed. 711; Rosenthal v. N.Y.Life, 94 F.2d 675.

Argued orally by John C. Satterfield for appellant and W. H. Watkins, for appellee.

OPINION

McGehee, J.

This appeal is from a decree of the Chancery Court of Hinds County, sustaining a special and a general demurrer to a bill of complainant as amended and dismissing the same, in a suit brought by the appellants against the New York Life Insurance Company, a non-resident insurance corporation, and the Jackson-State National Bank, a resident garnishee in equity, seeking to recover on a life insurance policy for the sum of $ 10, 000 issued by the said life insurance company on July 11, 1929, to Byrd Hill Golightly, a resident of Crittenden County, Arkansas, now deceased, which was payable to his estate, and against which policy there was a lien note in the sum of $ 824.57 at the time of the death of the insured on January 31, 1935.

The policy was permitted by the insured to lapse on October 6, 1933, for the nonpayment of a quarterly premium due on that date, but it was provided by the terms thereof that in the event of default in the payment of a premium after three full years' premiums shall have been paid, there would be certain benefits which should apply.

"(a) Temporary Insurance.--Insurance for the face of the Policy plus any dividend additions and any dividend deposits and less the amount of any indebtedness hereon, shall, upon expiry of the period of grace, be continued automatically as Temporary Insurance as from the date of default for such term as the Cash Surrender Value less any indebtedness hereon will purchase as a net single premium at the attained age of the Insured, according to the American experience table of mortality and interest at 3 per cent. This Temporary Insurance will be without participation in surplus.

"(b) Participating Paid-up Insurance.--Within three months after such default, but not later, the Insured may surrender this Policy and elect in place of such Temporary Insurance to have this Policy indorsed for the amount of Participating Paid-up Insurance which the Cash Surrender Value at date of default less any indebtedness hereon, will purchase as a net single premium at the attained age of the Insured at the date of default according to the American experience table of mortality and interest at 3 per cent. The Insured may obtain a loan on such Paid-up Insurance or surrender it within one month after any anniversary for its cash surrender value.

"(c) Cash Surrender Value.--If the Policy shall not have been indorsed for Participating Paid-up Insurance, the Insured, within three months after such default, but not later, may surrender this Policy and all claims thereunder and receive its Cash Surrender Value as at date of default less any indebtedness hereon. The Cash Surrender Value shall be the reserve on the face amount of the Policy at date of default, omitting fractions of a dollar per thousand of insurance, and the reserve on any outstanding dividend additions and any outstanding dividend deposits, an less a surrender charge for the third to the ninth years, inclusive, of not more than one and one-half per cent of the face of the Policy. The reserve shall be computed on the basis of the American experience table of mortality and interest at 3 per cent."

he bill of complaint alleges, in substance, that no election was made by the insured after the policy of insurance lapsed, and within three months after the date of default, such as would have entitled the insured to receive either the participating paid-up insurance provided for under clause (b), or the cash surrender value under clause (c); and that therefore the appellants would be entitled to recover the face amount of the policy, less the amount of indebtedness thereon, on the ground that on the date of default in the payment of premium on October 6, 1933, the cash surrender value of the policy less any indebtedness thereon, was sufficient as a single premium at the attained age of the insured, according to the American experience table of mortality and interest at 3%, to purchase extended insurance for a period up to and beyond the death of the insured, if the insured company had not deducted...