Union Central Life Insurance Company v. Caldwell
| Decision Date | 21 July 1900 |
| Citation | 58 S.W. 355,68 Ark. 505 |
| Parties | UNION CENTRAL LIFE INSURANCE COMPANY v. CALDWELL |
| Court | Arkansas Supreme Court |
[Copyrighted Material Omitted] [Copyrighted Material Omitted]
Appeal from Sebastian Circuit Court, Ft. Smith District, EDGAR E BRYANT, Judge.
STATEMENT BY THE COURT.
Appellee as the beneficiary of a life insurance policy issued to his mother by the appellant, sued appellant for the amount of the policy, less an amount loaned his mother by the appellant. The answer admitted the policy and death of the assured, but denied that the policy became a paid-up policy in favor of appellee upon the death of the assured, and set up a loan made to assured upon the joint note of herself and the appellee, with the policy as collateral. It averred that this policy, pursuant to the authority contained in the note, was sold after default was made in the payment of interest on the note, which default rendered the entire note due.
The suit was brought at law, and, after the introduction of evidence for the plaintiff and defendant, the defendant requested of the court, among other instructions, to direct a verdict for the defendant, and moved the court to find for the defendant. Whereupon the court announced that the case was properly one of equitable cognizance to set aside a forfeiture, which, if not void, was inequitable; that the facts were undisputed, and left nothing to the jury, and the court would entertain a motion to transfer to equity, and was ready to decide it. Plaintiff moved to transfer to equity, which motion was granted, and the defendant excepted to all of these actions, and then, after reserving their exceptions, requested time in which to take testimony in addition to the testimony then before the court, which it was agreed the chancellor should consider. This time was given, and the company took additional evidence. At a subsequent day the decree was rendered from which this appeal was taken.
The facts are, substantially, as follows: In 1869, the Cincinnati Mutual Life Insurance Company issued to Louisa Caldwell, the mother of the appellee, Walter O. Caldwell, a policy of life insurance in the sum of $ 2,000, with participation in profits, to be paid at her death in consideration of the payment of five annual premiums of $ 189.34 each. Under an agreement the assured paid but $ 126.34 per annum on the premiums, $ 63 each year being loaned to her on the faith and credit of the policy. On December 13, 1872, the appellant issued to said Louisa Caldwell, in lieu of the policy issued by the Cincinnati Mutual Insurance Company, a policy of life insurance on her life, with participation in the profits, for the benefit of the appellee, in the sum of $ 2,000, in consideration of the payment of five annual premiums of $ 189.34 each, with a stipulation that the sum of $ 63 of each of said annual premiums should be allowed as a loan bearing interest at six percent. from their respective dates, and acknowledged by all parties as a just indebtedness against said policy until paid or cancelled by profits or otherwise. Mrs. Caldwell paid the five annual premiums, the last being July 5, 1873, when the policy was paid up. In 1894 Mrs. Caldwell applied to appellant, through Messrs. Yowell & Williams, who were state agents of appellant, for a loan with the policy as collateral security. She received the following letter:
After this the following instrument was executed:
The amount $ 487.80, stated in letter supra as premium loans due on the policy, was deducted from the $ 800, and Mrs. Caldwell was paid the balance $ 312.20 cash. On the policy issued by the Union Central Company was this indorsement: "Loans on Policy No. 10062. Date, December 30, 1872. Loans outstanding to July, 1873, on Cincinnati Mutual Policy 1523, $ 257.45. Surrendered loan for July, 1873, $ 42.18. Total loan against policy, $ 299.63. There was a clause in the policy providing that, in case of default after two years of insurance, on surrender of the policy within sixty days after default, it would issue a "new paid-up policy for an equitable amount, being not less than $ 800 after two years, $ 1,200 after three years, $ 1,600 after four years, and $ 2,000 after five years."
The secretary of the appellant appended a statement showing all the debits and credits between the defendant company and Louisa D. Caldwell upon said policy No. 10062, as the same appears upon the books of the company, together with the amount of dividends earned upon said policy and the amount of reserve or undivided profits which would have accrued to said policy if the same had been kept alive until June 14, 1895, as follows:
Bal. Loans.
New Loan $ 63.
$ 17.98
$ 20.82
$ 317.61
July 7, 1874
18.12
15.99
319.74
July 7, 1875
18.30
14.70
323.34
July 7, 1876
18.50
15.09
326.79
July 7, 1877
18.49
18.69
326.59
July 7, 1878
19.02
9.623
35.99
July 7, 1879
19.5
79.82
345.74
July 7, 1880
20.14
10.04
355.84
July 7, 1881
$ 20.74
$ 10.23
$ 366.35
July 7, 1882
21.58
6.70
381.23
July 7, 1883
22.32
9.29
394.26
July 7, 1884
22.93
12.17
405.02
July 7, 1885
23.45
14.16
414.31
July 7, 1886
23.99
14.54
423.76
July 7, 1887
24.35
17.90
430.21
July 7, 1888
24.69
18.74
436.16
July 7, 1889
25.03
18.96
442.23
July 7, 1890
25.38
19.18
448.43
July 7, 1891
25.73
19.68
454.48
July 7, 1892
26.54
11.80
469.24
July 7, 1893
27.61
9.054
87.80
The dividend on the Cincinnati mutual policy up to 1871 was $ 16.88, and in 1872 the dividend was $ 14.89.
H. C Mechem testified: That he practiced law in Ohio from 1867 to 1870, and at that time he undertook to be familiar with the laws of Ohio. That there was no statutory law in Ohio governing the computation of interest where there were partial payments made, but that the rule he had seen applied in courts, computations made by masters and referees and counsel and approved by the court, was that where there were partial payments made upon the indebtedness, if the partial payments exceeded the interest due at the time it was made the interest at the legal rate was calculated, and the over-plus applied to the principal. If the payment at the time it was made did not exceed the then due interest, the payment then drew interest at the legal rate from the time it was made until such a time as the payments...
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