Truly v. Mutual Life Ins. Co. of New York

• Decision Date: 26 October 1914
• Docket Number: 16432
• Citation: 66 So. 970,108 Miss. 453
• Court: Mississippi Supreme Court
• Parties: TRULY v. MUTUAL LIFE INS. CO. OF NEW YORK

66 So. 970

108 Miss. 453

TRULY v. MUTUAL LIFE INS. CO. OF NEW YORK

No. 16432

Supreme Court of Mississippi

October 26, 1914

APPEAL from the chancery court of Jefferson county. HON. J. S HICKS, Chancellor.

Bill by Jeff Truly, against the Mutual Life Insurance Company of New York. From a decree, complainant appeals and the defendant cross-appeals.

Appellant filed his bill in the court below praying that appellee be decreed to issue a paid-up policy on his life payable to his wife, Mrs. Mattie Truly, and, from a decree which seems to have been intended to sustain in part and overrule in part a demurrer interposed thereto, both an appeal and cross-appeal have been prosecuted to this court.

The bill alleges, in substance, that in 1891 appellant was solicited by one Hubert Hunoldstein, an agent of appellee, to make application for a policy of insurance in appellee company; that, during the progress of negotiations between appellant and Hunoldstein, Hunoldstein wrote appellant that among the options which would be available to him under the policy contemplated, was that at the expiration of twenty years, he could "take a paid-up policy for five thousand four hundred and ninety dollars;" that appellant, upon receiving and examining the policy, "ascertained that it contained no statement with reference to the option for its surrender for paid-up insurance at the expiration of the twenty-year distribution period, being, as before stated, the option which complainant desired to avail himself of and which had been stated to him by the soliciting agent as being available under the policy applied for." He thereupon wrote to T. H. Bowles at New Orleans, Louisiana, who is alleged to have been appellee's general agent "setting forth the facts above detailed as to said option and requested of him a statement as to the options which would be available at the end of the twenty-year distribution period should he decide to accept the policy applied for." To this letter Bowles replied as follows:

"New Orleans, La., January 16, 1892.

"Mr Jeff Truly, Fayette, Miss.--Dear Sir: As requested in yours of January 15th we send you the statement asked for, showing the various options to which you will be entitled at the end of the first distribution period on the policy which you applied for. After three year's premiums have been paid and at the end of the third year you will be entitled to take a paid-up policy for three hundred and twenty-five dollars at the end of the fourth year four hundred and thirty dollars, fifth year, five hundred and forty dollars, etc. These paid-up values are compulsory under the laws of New York and the amounts are fixed by law.

"Yours very truly,

"T. H. BOWLES, Gen'l Agent, per Post."

The statement referred to in this letter, omitting therefrom the portions having no bearing on this controversy, was as follows:

"Income life policy, issued by the Mutual Life Insurance Company of New York, Richard A. McCurdy, president, four hundred and fifty-one million dollars and upwards paid to policy holders and held for future payments.

"T. H. Bowles, General Agent Louisiana and Mississippi. Louisiana Nat. Bank Building. New Orleans, La. For the use with 'Illustrations, 1891.'

"Age thirty, anl. Premium one hundred and sixteen dollars and fifty cents.

"Illustration.

"Income Life Policy--Face Value five thousand dollars--Reserve one thousand two hundred and eleven dollars and sixty-five cents.--This form of contract is new and original in its essential features. Under it the policy holder has several options of settlements, or continuance, as below stated. The cash and equivalent values include the legal reserve, the amount of which is specifically guaranteed, and the surplus. What this surplus will be in the future settlements will necessarily depend upon subsequent experience. The surplus incorporated with the cash value in this example is to be understood as an approximate illustration based upon actual experience in policy settlements of recent date.

"Options at the end of twenty years:

"A--Two thousand nine hundred and eighty-one dollars and sixty-five cents in cash. 'A,' to draw in cash the entire reserve with the accumulated surplus.

"B--One hundred and four dollars and thirty-five cents annual income and two thousand nine hundred and eighty-one dollars and sixty-five cents at death. Or, 'B,' to draw annual income for life of three and one-half per cent. on the entire reserve and the accumulated surplus left with the company as a sum payable at death.

"C--Eight thousand three hundred and forty-five dollars at death. Or, 'C,' convert the accumulated surplus into paid-up additions, and continue the policy for its original amount, with subsequent dividends, by payment of original premium.

"D -- One hundred and thirty-seven dollars and fifty-five cents life income and five thousand dollars at death. Or, 'D,' surrender accumulated surplus for a life income and continue original policy amount with subsequent dividends by payment of original premium.

"E--Five thousand four hundred and ninety dollars at death. Or, 'E,' surrender policy and surplus for paid-up insurance, payable at death.

"F--Two hundred and thirty-one dollars and sixty cents immediate income; four hundred and fifty-two dollars deferred income. Or, 'F,' to buy an immediate or a ten-year deferred income with total cash value.

"Insurance and Contingent Profit.

"Guaranteed.

"The following statement shows the amount payable under the policy, should death occur in any year prior to the date fixed for the distribution of dividends.

"Statement.

"Death During first year amount payable $ 5,000.

second year amount payable $ 5,000.

third year amount payable $ 5,000.

fourth year amount payable $ 5,000.

fifth year amount payable $ 5,000.

sixth year amount payable $ 5,000."

--and continuing in like manner through the twentieth year.

Upon receipt of this letter and statement appellant, in the language of the bill, "acting upon the assurance of said general agent explaining the terms of said policy that said options were available under the said policy, although the same were not set out in the face thereof, complainant accepted said policy" and has paid twenty annual premiums thereon.

The bill further alleges that prior to the expiration of the twenty years appellant notified appellee that he desired to surrender the policy and accept a paid-up policy for the amount to which under the contract he was entitled; that appellee admitted his right so to do, but declined to issue him a paid-up policy for five thousand four hundred and ninety dollars, and offered him, instead, a paid-up policy for three thousand eight hundred and fifteen dollars, which he declined to accept. There was no allegation in the bill setting forth how this amount of three thousand eight hundred and fifteen dollars was arrived at, and the only clause in the policy dealing with the question of a paid-up policy is as follows:

"Paid-up Policy,--After three full annual premiums have been paid upon this policy, the company will, upon the legal surrender thereof before default in payment of any premium, or within six months thereafter, issue a nonparticipating policy for paid-up insurance, payable as herein provided, for the amount required by the provisions of the act of May 21, 1879, chapter 347, Laws of the state of New York."

The statute of the state of New York referred to provides:

"Whenever any policy of life insurance hereafter issued by any company organized or incorporated under the laws of this state, after being in force three full years, shall by its terms lapse or become forfeited for the nonpayment of any premium, or of any note given for a premium, or loan made in cash on the policy as security, or of any interest on such note or loan, unless the provisions of this act are specifically waived in the application, and notice of such waiver written or printed in red ink on the margin of the face of the policy when issued the reserve on such policy, including dividend additions, calculated at the date of the failure to make any of the payments above described, according to the American experience table of mortality, and with interest at the rate of four and a half per cent. per annum, after deducting any indebtedness of the insured on account of any annual, semiannual, or quarterly premium then due, and any loan made in cash on such policy, evidence of which is acknowledged by the insured in writing, shall, on demand made, with surrender of the policy within six months after such lapse, be taken as a single premium of life insurance at the published rates of the company at the time the policy was issued, and shall be applied, as shall have been agreed in the application and policy, either to continue the insurance of the policy in force at its full amount so long as...