Rehearing
Denied Nov. 24, 1921.
Appeal
from Circuit Court, Jefferson County; Horace J. Wilkinson
Judge.
Action
by Celia Norris, as beneficiary, against the New York Life
Insurance Company, upon a life insurance policy issued to her
husband, now deceased. Judgment for the plaintiff, and the
defendant appeals. Affirmed.
There
was no error prejudicial to defendant in sustaining demurrers
to defendant's rejoinders, which were meerly explanatory
of the denials in previous rejoinders, where all of the
evidence, which would be admissible under the rejoinders held
bad, was admissible under the denials.
The
following are the defendant's pleas:
"3.
For further plea and answer to the complaint, the defendant
says that said policy was issued on the application of
Frank M. Norris on, to wit, July 3, 1905, with an annual
premium of $300.15, payable on the 3d day of each July
thereafter, and constituted a contract of insurance between
said Frank M. Norris and the defendant, with the plaintiff
as beneficiary therein; with the right in said Norris to
change said beneficiary without the consent of the
beneficiary and to receive every benefit, exercise every
right, and enjoy every privilege
conferred upon the insured by said policy, without the
consent of the beneficiary; that it was provided in said
policy that the insured might obtain cash loans on the sole
security of said policy, on written request, at any time
after it had been in force two full years, if premiums were
duly paid to the anniversary of the insurance next
succeeding the date when the loan might be obtained; that a
short time prior to the 6th day of August, 1912, during the
lifetime of said Frank M. Norris, and while said policy was
in force and effect, said Norris applied to the defendant
at its home office in the city of New York, in the state of
New York, for a loan of $1,580 from the defendant, on the
sole security of said policy; that said application was
accepted by the defendant at said city of New York and said
loan made to said Norris and the money paid to him in the
said city of New York, and that said Norris, upon borrowing
said money, executed the following loan agreement, and
deposited said policy with the defendant at its home office
in the city of New York as collateral security for said
loan, in accordance with the terms of said loan agreement:
"'Policy
Loan Agreement.
"'Pursuant
to the provisions of policy No. 2243263 issued by the New
York Life Insurance Company on the life of Frank M. Norris,
the undersigned have this day obtained a cash loan from
said company of the sum of fifteen hundred eighty and
xx/100 dollars ($1,580.00) the receipt of which is hereby
acknowledged conditioned upon pledging as collateral said
policy with said company as sole security for said loan and
giving assent to the terms of this policy loan agreement;
therefore, in consideration of the premises, the
undersigned hereby agree as follows:
"'1.
To pay said company interest on said loan at the rate of
five per cent. per annum, payable in advance from this
date to the next anniversary of said policy, and annually
in advance on said anniversary and thereafter.
"'2.
To pledge, and do hereby pledge, said policy as sole
security for the payment of said loan and interest, and
herewith deposit said policy with said company at its
home office.
"'3.
To pay said company said sum when due with interest,
reserving, however, the right to reclaim said policy by
repayment of said loan with interest at any time before
due, with repayment to cancel this agreement without
further action.
"'4.
That said loan shall become due and payable-(a) either if
any premium on said policy or any interest on said loan
is not paid on the date when due, in which event said
pledge shall, without demand or notice of any kind, every
demand and notice being hereby waived, be foreclosed by
satisfying said loan in the manner provided in said
policy; (b) or (1) on the maturity of the policy as a
death claim or an endowment; (2) on the surrender of the
policy for a cash value; (3) on the selection of a
discontinuing option at the end of any dividend period.
In any such event the amount due on said loan shall be
deducted from the sum to be paid or allowed under said
policy.
"'5.
That as the amount of loan available at any time includes
any previous loan then unpaid, the execution of a
subsequent loan agreement, without further action,
cancels and annuls any previous agreement.
"'6.
That the application for said loan was made to said
company at its home office in the city of New York, and
was accepted, the money paid by it, and this agreement
made and delivered there; that said principal and
interest are payable at said home office, and that this
contract is made under and pursuant to the laws of the
state of New York, the place of said contract being said
home office of said company.
"'In
witness whereof, the said parties hereto have set their
hands and affixed their seals, this 6th day of August,
1912.
"'Frank
M. Norris. [L. S.]
"'Signed
and sealed in the presence of J. H. Guild, Witness.'
"And
defendant further avers that, in said policy, it was
agreed that said loan should be satisfied as follows:
'If any premium or interest is not paid on or before
the date when due and if there is an indebtedness to the
company-insurance for the net amount that would have been
payable as a death claim on said due date will
automatically continue from said due date as term
insurance for such time within the endowment period as
the excess of three-fourths of the reserve under this
policy over such indebtedness will purchase at the age of
the insured on said due date, according to the
company's present published table of single premium
insurance for term insurance and no longer.'
"Defendant
further avers that the premium on said policy, that
became due and payable on the 3d day of July, 1913, was
not paid, nor was any part of it paid by said Norris, nor
was any part of the interest which became due on said
loan on the 3d day of July, 1913, ever paid, and that
said loan thus became due, and the pledge of said policy,
under the terms of said loan agreement, became subject to
foreclosure.
"Defendant
further avers that thereupon on, to wit, Jan. 15, 1914,
during the lifetime of said Norris, it foreclosed said
loan and the pledge of said policy, in accordance with
the terms of said loan agreement, and satisfied the
indebtedness due under the policy, out of the reserve
held by it under said policy; that the indebtedness under
said policy exceeds three-fourths of the reserve held by
the company under said policy, and that, therefore, said
policy became of no further value. Defendant avers that
said pledge of said policy and said foreclosure were
valid under the laws of the state of New York, said laws
being that the parties to a pledge of collateral security
for the payment of a debt or loan may provide by contract
for any manner of disposing of the pledge to satisfy the
claim upon it, and further as follows: In section 16, c.
326, vol. 1 of the Laws of New York for the session of
the Legislature of the state of New York for the year
1906. 'Any life insurance company may lend a sum not
exceeding the lawful reserve which it holds upon said
policy on the pledge to it of such policy and its
accumulations as collateral security.'
"4.
Defendant adopts all the allegations of plea 3 for plea 4
down to and including the words, 'that the
indebtedness under said policy
exceeded three-fourths of the reserve held by the company
under said policy,' and adds thereto the following:
Defendant furthers avers that on, to wit, January 15, 1914,
it deposited in the United States mails, properly addressed
to Frank M. Norris at his post office and street address in
Birmingham, Ala., with sufficient postage, a letter notifying
him that, under said loan agreement, said policy had been
pledged to and deposited with the defendant as collateral
security for said cash loan, and that the premium and
interest due on said policy on the 3d day of July, 1913, not
having been paid, the principal of said loan became due and
had been settled according to the terms of the policy, and
that the policy had no further value.
"Defendant
avers that said Norris did not deny the validity of said
settlement and did not raise any protest thereof, but with
knowledge of said foreclosure did not make any further claim
of right to or interest in said policy during the remainder
of his lifetime and up until his death on, to wit, February
12, 1916, nor did he pay or offer to pay any further interest
on said debt nor premiums on said policy.
"Nor
did said Norris ever inform the defendant that any of its
agents or employees had for any reason refused or failed to
accept the premium or interest on said loan due in July
1913, for the failure to pay which said foreclosure was had,
nor did said Norris make any claim that the defendant's
agents or employees had failed or refused to accept said
premium for any reason whatever, but thereafter said Norris
accepted said foreclosure of said policy as valid and
binding.
"Wherefore
defendant says plaintiff is estopped to proceed in this suit.
"5.
For plea 5 defendant adopts all the allegations of plea
three, down to and including the words, 'that the
indebtedness under said policy exceeded three-fourths of the
reserve held by the company under said policy.' And
defendant adds thereto the following: And defendant avers
that the reserve held by it under said policy at the date of
said foreclosure amounted to, to wit, $1,765, and that, after
satisfying said indebtedness, there remained a balance...
