Ropiequet v. Ætna Life Ins. Co.

• Decision Date: 18 April 1941
• Docket Number: Ag. No. 7.
• Citation: 33 N.E.2d 228,309 Ill.App. 346
• Parties: ROPIEQUET v. ÆTNA LIFE INS. CO.
• Court: United States Appellate Court of Illinois

309 Ill.App. 346

33 N.E.2d 228

ROPIEQUET

v.ÆTNA LIFE INS. CO.

Ag. No. 7.

Appellate Court of Illinois, Fourth District.

March 1, 1941.

As Amended on Denial of Rehearing April 18, 1941.

Appeal from City Court of East St. Louis; Ralph Cook, Judge.

Action by Florence W. Ropiequet against the Aetna Life Insurance Company on a life insurance policy. From a judgment for plaintiff, defendant appeals.

Affirmed. Oehmke & Dunham, of East St. Louis (E. Fred Gerold, Jr., of East St. Louis, of counsel), for appellant.

Beasley & Zulley, of East St. Louis, for appellee.

DADY, Justice.

Plaintiff, after a trial before a jury, recovered a judgment for $1,682.32 on a life insurance policy issued by defendant. The policy was dated January 13, 1925, and provided that, in consideration of a quarterly premium of $12.62 to be paid on or before the 13th of January, April, July and October of each year, defendant agreed on the death of insured, Harold W. Ropiequet, to pay $2,000 to plaintiff, the insured's mother.

The insured and his father and mother lived in East St. Louis, Illinois. The home office of defendant was in Hartford, Connecticut,but it had a branch office in St. Louis, Missouri. The insured died at 4:00 a. m. on January 9, 1939.

On March 3, 1936, the St. Louis office of defendant mailed a letter from the St. Louis office addressed to the father of the insured at East St. Louis, stating that at the request of such father the St. Louis office was enclosing in such letter “loan application form” to be signed by the insured, “date and place of signing inserted and the completed form returned to us. We will then request the Home Office to make the loan for the maximum amount available at the present time.” The loan application form was enclosed in such letter.

On March 5, 1936, the insured's father, R. W. Ropiequet, in behalf of the insured mailed a letter from East St. Louis to the St. Louis office of defendant stating that he was returning the loan application form duly signed by the insured, and that he understood that upon receipt of such letter the St. Louis office would instruct the home office to make the loan for the maximum amount available. This letter was received by the St. Louis office on March 6, 1936. The loan application form referred to was dated March 5, 1936, and was signed by the insured, and was enclosed with the letter. The insured in this loan application left the amount blank, and it is evident the amount was later filled in by the defendant. By this loan agreement, with the amount so filled in, the insured agreed to pay defendant the sum of $379.41, “with interest at the rate of six per cent per annum, payable on the next anniversary of the policy and annually on each anniversary thereafter,” and that “when any interest on this note becomes due and is not paid, the same shall be added to and become a part of the principal indebtedness evidenced by this note and subject to the same rate of interest.” Said agreement pledged the policy as security for the payment of such indebtedness. It also authorized and requested that a previous loan of $282.88 and accrued interest thereon be deducted from the amount of the loan.

An employee of the St. Louis office testified that on March 13, 1936, she mailed at St. Louis a letter addressed to the father of the insured at East St. Louis, Illinois. She identified and there was admitted in evidence a copy of such letter, which stated: “Loan under your above numbered policy has been increased to $379.41. Previous loan and interest were deducted, netting you $78.53. We enclose the company's check for the above amount, cancelled note covering the previous loan and a statement outlining the transaction.” Such statement of loan was admitted in evidence and was dated March 10, 1936, and showed the amount of the previous loan to be $282.88 and accrued interest of $18, or a total of $300.88, leaving a balance available of $78.53 for the insured on the new loan. She testified such check and such cancelled note were enclosed in such letter. She further testified that East St. Louis was across the river from St. Louis and that it would take about one day for such letter to get from St. Louis to East St. Louis. The insured's father testified that he “received the check on the 18th of March,” and thereupon secured the insured's endorsement on the check and on the same day deposited the check in his bank account for collection. He further testified that he received nothing with the check. The check was dated March 10, 1936, and was for the sum of $78.53. An endorsement on the check shows it was deposited in an East St. Louis bank on March 18, 1936. The insured never made any payment on the last loan.

All premiums on the policy due prior to April 13, 1937, were paid. The premium due April 13, 1937, was never paid, and therefore on April 13, 1937, the policy lapsed by its terms because of such non-payment except that by the terms of the policy the insurance continued automatically as extended term insurance from April 13, 1937, the due date of the defaulted premium, for the sum insured, less the indebtedness against the policy, for such a period as the cash value of the policy less the indebtedness would purchase according to the American Experience Table of Mortality and 3 1/2% interest.

Defendant assigns as error the trial court's failure to grant defendant's motion for a directed verdict after the close of all of the evidence and the refusal of the court to grant defendant's motion for judgment notwithstanding the verdict. The defendant contends that these motions should have been granted on the strength of calculations made by its actuary who was corroborated by an actuary of another insurance company. These calculations showed that the amount available for the purchase of such extended insurance was only sufficient to continue the insurance until sometime on January 8, 1939.

When the policy so lapsed on April 13, 1937, for non-payment of premium, it became necessary to ascertain and deduct the amount of the then indebtedness against the policy from the cash value thereof so as to determine the amount left for the purchase of extended insurance. The parties agree that the cash value of the policy when it so lapsed on April 13, 1937, was $428, but disagree on the amount of indebtedness against the policy on the date when the last loan was made. Their differences arise principally over when the last loan was made and what method should be pursued in computing the interest due on the then indebtedness.

Defendant's actuary testified that he took the effective date of the loan as being March 10, 1936, on the theory that the check was issued by the home office that day. He first computed interest on $379.41 (the principal amount of the last note) at six per cent per annum from March 10, 1936, to January 13, 1937, the next anniversary date of the policy. He then added such interest, which he found to be $19.16, to the principal, making a total of $398.57. He next computed interest at six per cent on $398.57 from January 13, 1937, to April 13, 1937, the date when the policy so lapsed, and added the interest, which he found amounted to $5.98, to $398.57, making a total indebtedness of $404.55 on the date when the policy lapsed. He then subtracted the sum of $404.55 from the cash value of $428, which left the sum of $23.45 for the purchase of extended insurance. He then testified that it required $13.66 to provide such extended insurance for one full year, that is from April 13, 1937, to April 13, 1938; that he deducted $13.66 from $23.45, which left $9.79 to apply on the last year, that is the year the insured died, he not having lived such full year; that the actual cost of such extended insurance on $1,595.45 for such full last year would have been $13.26; that therefore $9.79 divided by 13.26 times 365 (days in a year) would produce 269.4 days that the policy would actually remain in force after April 13, 1938, and that by so doing the policy as extended continued in force to some time on January 8, 1939, but did not continue in force into January 9, 1939, the day when the insured died.

Such witness was corroborated by the testimony of another actuary who also testified for defendant, but such last actuary testified that the extended insurance according to his computations only continued in force until some time on January 7, 1939.

To sustain her recovery plaintiff relies on the calculations of Roland L. Schmidt, who testified in her behalf. He testified over objection that he first computed interest from March 10, 1936, at six per cent per annum on the sum of $379.41 for one year instead of merely to the next anniversary date of the policy, as was done by defendant's actuary, and he found such interest to be $22.76; that he then added such interest to the principal making a total of $402.17. He then computed interest on the sum of $402.17 from March 10, 1937, to April 13, 1937, which interest he found amounted to $2.21, making a total indebtedness of $404.38, as of April 13, 1937. By this method...