Penn Mut. Life Ins. Co. of Philadelphia v. Marshall

• Decision Date: 25 June 1934
• Docket Number: 23533.
• Citation: 175 S.E. 412,49 Ga.App. 287
• Parties: PENN MUT. LIFE INS. CO. OF PHILADELPHIA v. MARSHALL.
• Court: Georgia Court of Appeals

175 S.E. 412

49 Ga.App. 287

PENN MUT. LIFE INS. CO. OF PHILADELPHIA v. MARSHALL.

No. 23533.

Court of Appeals of Georgia, Second Division

June 25, 1934

Syllabus by Editorial Staff.

Rights of parties should be determined by policy terms, so far as lawful, and language of policy should be construed as a whole, receive reasonable construction, and control where unambiguous (Civ. Code 1910, § 2475).

Charging 5% interest on money in advance, and deducting such interest from sum loaned borrower, or charging 5% interest thereon where the 5% is loaned to borrower also, is not usurious (Civ. Code 1910, § 3436).

Where life policy provided for loans to insured at 5% interest payable in advance, insurer could deduct interest in advance or, where it did not, could compute interest on amount of loan plus 5% thereof, in computing whether net cash value of policy was sufficient to carry net amount of insurance from date of lapse for nonpayment of premium to date of insured's death (Civ. Code 1910,§§ 2475, 3436).

Where insurer's construction of life policy provisions as to interest on loans made to insured did not meet with insured's disapproval, such construction, not being contrary to law or public policy, was binding on beneficiary.

Error from Superior Court, Peach County; Malcolm D. Jones, Judge.

Suit by Lucy Marshall against the Penn Mutual Life Insurance Company of Philadelphia. Judgment for plaintiff, defendant's motion for a new trial was overruled, and defendant brings error.

Reversed.

Harris Russell, Popper & Weaver, of Macon, and Norman E. English, of Fort Valley, for plaintiff in error.

Herbert Vining and Geo. B. Culpepper, Jr., both of Fort Valley, for defendant in error.

Syllabus OPINION.

SUTTON Judge.

On December 12, 1913, the Penn Mutual Life Insurance Company of Philadelphia issued its policy of twenty-year pay insurance on the life of Thomas F. Marshall in the sum of $5,000. The insured borrowed money on said policy from time to time to pay the premiums on said insurance. The policy provided that "If three full years' premiums have been paid the Company at any time while the policy is in force will advance on proper assignment of the policy and on the sole security thereof at 5 per cent. per annum, a sum, at the option of the insured or owner of the policy, equal to or less than the full reserve at the end of the current policy year on the policy, on any dividend additions thereto according to the American Experience Table of Mortality, with interest at 3 per cent. per annum. There shall be deducted from such loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and interest shall be payable in advance to the end of the current policy year. (Italics ours.) Failure to repay any such loan or advance or to pay interest shall not avoid the policy unless the total indebtedness thereon shall equal or exceed such loan value at the time of such failure." The policy also provided that: "If this policy shall lapse through non payment of premium after three years' premiums have been paid, the Company will secure to the owner thereof a form of insurance, the net value of which shall be equal to the full reserve on the policy and on any dividend additions thereto at the date of default, according to the American Experience Table of Mortality, with interest at 3 per cent. less any existing indebtedness to the Company on the policy." The policy further provided that: "After the third year if any premium on this policy, annual, semi-annual, or quarterly, be not paid when due or within the period of grace, the Company will charge against the loan value of this policy such premium with 5 per cent. interest per annum in advance (italics ours), provided that such loan value is sufficient." The policy lapsed for nonpayment of premium on December 12, 1928. Under the figures of the insurance company the total indebtedness of the insured at that time was $2,167.86. The cash value as fixed by the policy was $2,214.70 and the dividend addition was $65.45. This left a net cash value of $112.29, which was sufficient to carry a net amount of insurance of $2,832.86 for two years and 170 days beyond the date on which the policy lapsed, which was to May 31, 1931. The insured died on August 26, 1931, after the policy lapsed and after the expiration of the...