175 Ky. 554 | Ky. Ct. App. | 1917
Opinion of the Court by
Affirming.
On May 31,1905, the appellee, Reserve Loan Life Insurance 'Company, an insurance corporation of Indianapolis, Indiana, and authorized to do a general insurance business, entered into an insurance contract with William I. Short, deceased, by which it insured his life in the sum of $5,000.00. The policy issued bore the date of May 31,' 1905,^ and other than the various conditions, stipulations, provisions and benefits included in the written policy, was as follows:
“In consideration of the warranties in the printed and written application for this policy of insurance, which is hereby made a part of this contract, and of the payment in advance of the sum of eight hundred and twenty-nine and 90/100 dollars, the commuted premium, for the seven years immediately preceding the date hereof; and of the further payment in advance of the sum of one hundred eighty-five and 65/100 dollars, hereby insures the life of William I. Short hereinafter called the insured, of Owensboro, county of Daviess, state of Kentucky, for a period of one year from the date hereof; and in consideration of the further payment of one hundred eighty-five and 65/100 dollars on or before the 31st day of May in every year thereafter during the continuance of this policy, until twenty annual premiums shall have been paid, Hereby Promises to Pay five thousand dollars to the executors, administrators or assigns of insured, subject to the provisions and conditions named herein, at the home office of the company, in the city of Indianapolis, sixty days after acceptance of satisfactory proofs of the death of the insured, during the continuance of this policy.”
One of the provisions of the policy is as follows:
‘ ‘ Second. Extended Insurance. — After one year from the date hereof, upon the non-payment of any subsequent premium and without action on the part of-the insured, this policy will become a non-participating policy for paid up term insurance for its full amount, to cease after*556 the number of years and days stated in the table above for the end of the last year for which complete annual premiums have, been paid. Provided, that any existing indebtedness to the company on account of this policy, if not paid in cash, will reduce the extended term of insurance indicated, in the ratio of such indebtedness to the reserve for such insurance. ’ ’
By the table above referred to, it is shown that the extended insurance provided for at the end of the eighth year, when eight full premiums have been paid, was for the full amount of the policy for the term of thirteen years and one hundred and fifty days from the end of the eighth year.
Another provision of the policy is as follows:
“This policy shall not take effect until delivered to the insured while in good health; nor then, unless the first premium hereon is paid in cash, or a note for extension of time of such payment is accepted by the company at its home office in the city of Indianapolis.”
It likewise contains the following’ provision:
“Any indebtedness to the company, including any balance of the current year’s premium remaining unpaid, will be deducted in any settlement of this policy or of any benefit surrender thereunder.”
Another clause in the policy is as follows:
“After this policy shall have been in force- one full year, the company, within sixty days after written request, will in conformity with its rules then in force, loan *up to the amount stated in the table- above for the end of' the last year for which complete annual premiums have been paid, with interest in advance, at the rate of five per centum per annum. Provided: (1) That this policy be duly assigned to the company as collateral security for such loan. (2) That any subsequent loan on this policy, together with all former loans and interest due, shall not exceed the amount specified in the above table opposite the numerical year then reached. (3) That in any settlement of this policy any outstanding loans must be paid. (4) That the premiums must be fully paid to the .end. of the policy year in which the loan becomes due.”
The insured died on the 7th day of December, 1914.
The- appellant, as the personal representative of the insured, sought, by this action, the recovery of the full sum of the insurance provided for in the policy, and by her petition substantially alleged the issual of the policy to her intestate and that he paid the commuted premium
The appellee answered and denied that the commuted premium of $829.90 for the seven years just preceding the date of the policy was ever paid by the insured or by any one for him, or that it was ever treated as paid by the appellee, or that the premium for either of the seven years or any part of either of them had ever been paid. The answer further averred, that the policy was issued on the single or commuted premium plan, under an agreement between the appellee and the insured, that the policy should become a paid up policy for the amount of the face of it upon the payment to the company of a premium of $185.65 on the 31st day of May, and on the same day, in each year from the date of the policy until thirteen annual premiums should have been paid, and the payment to it of a commuted premium for $829.90 for the seven years just preceding the 31st day of May, 1905; that when the insured made application for the policy he was unable to pay the commuted premium for the seven years preceding the date of the policy and at his request the appellee loaned him on the security of the policy and its accumulations the sum of $829.90, and to secure the payment of the debt the insured assigned the policy to the appellee; that the arrangement was set forth in a writing, which insured subscribed on the 29th day of May, 1905, and which was filed with the answer. The writing, in substance, stated that the appellee had loaned to the insured the sum of $829.90, being the reserve loan value of its policy No. 18215 at that date and issued by appellee to insured on May 31, 1905, and that the loan was secured by a pledge of the policy and its accumulations, and that the policy was deposited with appellee as
To the answer, the appellant interposed a general demurrer, which being overruled, she declined to plead any further and her petition was thereupon dismissed and from the judgment she has appealed.
By the terms of the policy, it is provided that the policy shall not take effect, although delivered, until the first premium shall have been paid, in cash, or a note, for extension of the time for such payment, is accepted by the company. Hence, the payment of the first premium or an arrangement for it as provided by the policy seems to be a condition precedent to the policy becoming in effect. The appellant alleged in her petition that the first premium, which was the commuted one of $829.90, had been paid. This averment, however, was denied by the answer. The answer then avers the fact that it was agreed between the insured and the company to. issue the policy to the insured upon the payment of the commuted premium for seven years, and the premium for the eighth year, in- advance, and that the policy should become paid up after thirteen additional yearly payments in place of twenty, and the payment of the commuted premium as provided in the loan agreement; but that Short was unable to pay the commuted premium for the first seven years, which the policy was treated as having already run, and the company loaned to him the amount necessary to pay the commuted pre
It is insisted for appellant that under section 656 and 679, Kentucky Statutes, that the appellee is precluded from relying upon the loan agreement for any purpose, or using it in evidence for any purpose, and that both sides are bound by the presumption, that a written obligation to pay money is presumed to be based upon a sufficient consideration, and that the policy itself admits the payment of the commuted premium and of the yearly premium made at the date of the policy. It will, however, be observed that the policy itself does not state that the commuted premium or the other, either, had been paid before or at the time of the delivery of the policy, and the payment being a condition precedent, it is allowable, by any competent evidence, to be shown'that the condition precedent had not been complied with. Besides, the payment of the commuted premium, as well as the yearly premium due upon that date, was a part of the consideration for the execution and delivery of the policy, and construing sections 656, 679, 470, and 472, Kentucky Statutes, all of which are in force, together, it has been held, as in Continental Casualty Co. v. Jasper, 121 Ky. 77, that in a contract of insurance, evidence may be received to show “what the true consideration of a policy of insurance was, and likewise to show that it was not paid.” The demurrer, however, admits that, the commuted premium was never paid, unless it was paid
For appellant, it is insisted that under the provisions of sections 656 and 679, supra, that the “loan agreement” being preliminary to the execution of the policy and bearing upon the contract, which the policy contains, and not having been incorporated in the policy nor en
“Nor shall any such company nor any agent thereof make any contract of insurance or agreement as to such contract, other than is plainly expressed in the policy issued thereon.”
Section 679, so far as it relates to the matter in controversy, is as follows:
“All policies or certificates hereafter issued to persons within the Commonwealth of Kentucky by corporations transacting business therein under this law, which policies or certificates contain any reference to the application of the insured or the by-laws or the rules of the corporation, either as forming part of the policy or contract between the parties thereto or as having any bearing on said contract, shall have such application, by-law and rules or the parts thereof relied upon as forming part of the policy or contract between the parties thereto or as having any bearing on said contract attached to the policy°or certificate or printed on the face or reverse side thereof, and unless either so attached and accompanying the policy or printed on the face or reverse side thereof, shall not be received as evidence in any action for the recovery of benefits provided by the policy or certificate, and shall not be considered a part of the policy or contract between the parties.....”
This court has held that each of the sections, supra, is applicable to policies of life insurance issued, by regular line life insurance companies, and has consistently held that any parol contract or separate writing containing stipulations not expressed in the policy or contrary to the provisions of the policy, or references in the policy to provisions of the application or by-laws or rules of the insurance company, not embraced in the policy nor endorsed thereon or attached to and accompanying the policy, cannot be considered .as any part of the contract of insurance and have no effect upon it. Providence Assurance Society v. Beyer, 23 R. 2460; Rice v. Rice, 23 R. 635; Manhattan Insurance Co. v. Myers, 109 Ky. 373; Providence Assurance Society v. Puryear, 109 Ky. 381; Supreme Commandery v. Hughes, 114 Ky. 175; Metropolitan Life Insr. Co. v. Moore, 117 Ky. 651; American Guild v. Wyatt, 125 Ky. 44; Continental Cas
Hence, the demurrer was properly overruled to the answer, and the judgment is therefore affirmed.