Hubbard v. Equitable Life Assurance Soc'y.

• Decision Date: 29 January 1918
• Citation: 81 W.Va. 663
• Parties: William P. Hubbard v. Equitable Life Assurance Society.
• Court: West Virginia Supreme Court

81 W.Va. 663

William P. Hubbard

v.Equitable Life Assurance Society.

Supreme Court of Appeals of West Virginia.

Submitted January 22, 1918.

Decided January 29, 1918.

1. Insurance Action for Breach of Loan Agreements Declaration.

In an action on a policy of life insurance, for damages occasioned by a breach of an agreement therein made for a loan of money by the insurer to the insured, the short declaration or count contemplated by sec. 61 of eh. 125 of the Code is applicable and may be used. (p. 665).

2. Same Action for Breach of Loan Agreement Count Bill of

Particulars.

In such case, a count charging a breach of the stipulation in general terms and a bill of particulars, itemizing the damages claimed, sufficiently state the grounds of the action, (p. 665).

?>. Appeal and Error Writ of Inquiry Delay.

Mere delay in the execution of a writ of inquiry, in an action in which the issues were finally made up and tried, is not available as ground of error, p. 668V

4. Insurance Life Insurance Agreement to Malce Loans Con-

struction.

An agreement in a life insurance policy to make loans on it, at a specified rate of interest, payable in advance, of stipulated sums of money, upon the due assignment of the policy to the insurer, as collateral security for the loans, contemplated continuance of such loans, at the option of the borrower, by payment of the interest thereon in advance, until maturity of the policy, provided it is kept alive by payment of the premiums thereon as they become due and payable; and the borrower is entitled to a provision in the loan agreement made under the clause, conferring the right of renewal by such payment of interest, for such'time as he keeps the policy alive, within the period required for maturity, (p. 668).

5. Same Life Insurance Loan Agreement Provision for Renewal.

Such provision may be made by the execution of a paper separate and distinct from that evidencing the loan, and, if such separate paper is offered, the insured is not justified in declining the loan merely because the stipulation is not inserted in the latter instrument, (p. 668).

6. Same Life Insurance Loan Provision Cancellation of Policy

Notice.

Under such a provision in the policy, the insured is entitled to reasonable notice of intention to cancel the policy for default in payment of the loan and an opportunity to save his policy by payment after such default, and refusal to make the loan without a stipulation in the loan agreement for right of cancellation of the policy, without notice, is a breach of the agreement to make it. (p. 668).

7. Same Life Insurance Breach of Loan Agreement Damages.

Emphatic refusal of the insurer, in such case, to make the loan.stipulated for, otherwise than upon an agreement waiving notice of intention to cancel the policy for default in payment of the loan, excuses the insured from further efforts to obtain it, and his application for it, under an agreement providing for such notice, is sufficient proof of his readiness and willingness to accept it, (p. 668).

8. Same.

If the insured, after refusal of the loan upon proper terms, borrows the money so stiuplated and applied for from other persons, upon collateral of his own, other than the insurance policy, and at a rate of interest higher than that specified in the loan provision of the policy, but the lowest obtainable, he is entitled to recover the interest so paid, in excess of what he would have. had to pay the insurer for the use of the same amount for the same period, under such loan provision, and the reasonable value of his services in procuring the loan, but no compensation for the use of the securities so employed as collateral, (p. 668).

9. Trial Evidence General Objection.

A general objection to evidence partially admissible, is properly overruled. It should be special, going only to the inadmissible part. (p. 67.'!).

3 0. T K suranCe Life Insurance Loan Pro vision Construction Evidence.

On an issue as to the proper construction of the loan stipulation above mentioned, provisions of policies subsequently issued by the insurer, defining the conditions upon which it makes loans to its policy-holders, are admissible, as tending to prove the practicability and reasonableness of the insured's interpretation of the stipulation, (p. 673).

i 1. Witnesses Life Insurance Loan Provision Evidence.

A local agent of the insurer whose business is the selling of its policies and collection of its premiums may properly be allowed to testify to his personal knowledge of the loan provision of such subsequent policies, and to refresh his memory by reading the same from a manual used by insurance agents, (p. 673).

32. Evidence Action for Breach of Loan Agreement.

If, in such case, the insured conducted his negotiations for a loan under the policy, through a local agent of the insured, the correspondence between the agent and his pr-ncipal is admissible evidence to prove the demand for the loan, even though the fact is established by other evidence, (p. 675).

Error to Circuit Court, Ohio County.

Action by William p. Hubbard against the Equitable Life Assurance Society. Judgment for plaintiff, and defendant brings error. Reversed and remanded.

Guy R. C. Allen, J. B. Sommerville, Alexander & Green, and Brown, Jackson & Knight, for plaintiff in error. Bernard Handlan, for defendant in error.

pofeenbarger, president:

The judgment complained of on this writ of error is for damages for alleged breaches of agreements in three life insurance policies, to make loans to the insured and holder of the policies, the elements or factors in the recovery being the difference between the rate of interest agreed upon in the policies, five per cent., and the rate the borrower had to pay on loans procured elsewhere, six per cent., compensation for the use of collateral securities on which such loans were secured and remuneration for the borrower's time and services in obtaining the loans. The three policies conferred right to loans amounting in the aggregate to $17,680.00, $3,-990.00 on one, $6,140.00 on another aid $7,550.00 on the third. The loss in interest was estimated at $562.23, in the testimony, and $500.00 was claimed on each of the other two items of the bill of particulars. The jury assessed the damages at $1,562.23 and judgment was rendered on the verdict.

A question of practice raised by an assignment of error, based on the overruling of a demurrer to the declaration, is whether a demand of this kind can be asserted upon a declaration in the form contemplated for actions on policies of insurance, by sec. 61 of ch. 125 of the Code. The argument against the use of the statutory form, invokes the rule of strict construction, because the statute is derogatory of the common law, and that rule applies to remedial legislation. Bank of Weston v. Thomas, 75 W. Va. 321. However, it does not forbid allowance of operation of a. statutory, provision to the full extent of its terms, when it applies, unless the intention to limit it to a narrower function is disclosed in some way. Sections 61 to 66 of ch. 125 of the Code, constituted ch. 66 of the Acts of 1877, entitled "An act to regulate pleadings in actions on policies of insurance." It provides that "A declaration or count on a policy of insurance, whether the policy be under seal or not, may be in effect" as prescribed. Intent to limit it to fire and life policies is clearly negatived in the form prescribed, by this direction: '' Here insert the cause of loss in general terms, for example: by fire, by damages of navigation or otherwise, according to the fact." In so far as it relates specially to declarations on life policies, it mentions only actions for death claims. A literal adherence to it would not limit the act to actions for indemnities for loss of property or injury thereto and death claims. The first part of it contemplates "loss in respect to the property (or subject) insured" by the policy sued on. This is general and seems to have been intended for use in all actions on all policies of insurance except in particular instances, actions for death claims under life policies, covered and specially dealt with in the second part of the form. The death claim seems not to have been regarded as indemnity for a loss, wherefore it is distinguished from other causes of action arising out of insurance policies and described as a right of action occasioned or called into being by the death of the insured. T hefirst part of the form contemplates actions for losses in respect to subjects of insurance other than property, such as health and earning capacity, susceptible of loss or impairment by sickness or casualty. Indemnity against such losses may be provided by policies. In other words, a policy may combine life, accident and health insurance, and, if the action on such a policy is one for indemnity, the declaration or count would not follow the latter part of the form. The cause of action would be within both the purpose and letter of the general form. A stipulation in a policy, binding the insurer to loan the insured money, is clearly a provision of the policy, though it may not be an insurance, in the strict sense of the term, and a breach thereof gives a right of action on the policy. The statute makes the policy a part of the declaration. Stoats v. Georgia Home Ins. Co., 57 W. Va. 571. Its provisions arc substituted for the common law allegations of right of recovery, as to everything except averment of the breach of some particular promise or agreement, shown by the policy itself filed as part of the declaration, and giving the right of action. The causes of action specified in the form prescribed are those most frequently asserted, and they were obviously used by way of illustration. The title of the act is general, going to all actions on policies of insurance, and sec. 1 provides that a declaration or count on such a policy may be in effect what the form indicates, and the indication is general and...