267 N.W. 824 | Mich. | 1936
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *234 On October 22, 1926, defendant issued to Frederick J. Wilson, then 16 years of age, a 30-year $2,000 endowment policy in which plaintiffs were named as beneficiaries. Subsequently, on April 22, 1929, in consideration of an extra premium and by an appropriate rider, defendant agreed to pay an additional sum of $2,000, double indemnity, in case the insured met death by accident, this double indemnity rider to become null and void should the nonforfeiture privileges of the policy become operative. The policy provided in one of the nonforfeiture clauses that where the policy lapsed for nonpayment of premiums the insurance should be automatically extended for a period reflected by the cash surrender value of the policy. It is conceded that the quarterly premiums up to and including that due on October 22, 1929, were paid. On December 6, 1929, the insured borrowed $100 from defendant upon the sole security of the policy. He died as a result of an accident on May 9, 1931. Defendant based its refusal to pay the loss on the ground that *235 the policy was null and void through a lapse of the policy owing to the failure to pay the quarterly premiums due after October 22, 1929. Plaintiffs brought suit and in their declaration, as modified by their reply, claimed the original amount of the policy, plus the additional $2,000, together with interest on such sums, less the amount borrowed by the insured from the defendant, plus interest. The sole question presented to the jury was:
"Were all premiums which became due prior to the death of Frederick Wilson, the insured, paid to the insurance company?"
The answer was in the affirmative. Thereupon, the trial judge entered a judgment for the full amount of the policy and for double indemnity, together with interest, less the amount due on the loan and interest thereon.
Plaintiffs on cross-appeal, in claiming that the amount of the loan should not have been deducted in the rendition of the judgment, contend that, as insured was a minor when he made the loan, the loan was voidable and was disaffirmed by plaintiffs after insured's death which occurred 17 days after he became of age. We will not discuss the question raised by the fact that plaintiffs' pleadings authorized the deduction of the $100 loan from plaintiffs' recovery, as this question was not raised in the lower court nor discussed in the briefs. We affirm the trial court's action, however, on the ground that the loan was valid and binding under 3 Comp. Laws 1929, § 12454, which provides:
"All contracts for * * * insurance made by any person between the ages of 16 and 21 years for the benefit of * * * his father, mother, * * * or for the surrender of such insurance, or for the discharge of any money payable or benefit accruing thereunder, *236 shall be * * * of the same force and effect as though said minor had attained his majority at the time of making such contract: Provided, That this section shall not have the effect of making a promissory note or other evidence of indebtedness given by such minor in payment of premium or premiums on such contracts for insurance valid, either in the hands of the original owner or subsequent purchaser thereof."
The note given by the insured was not for the payment of a premium. The loan was made in accordance with provisions for such in the contract of insurance wherein it was provided that any indebtedness to the company should be deducted from the amount otherwise payable by the company, that in computing the period of extended insurance the amount of the loan must be considered and deduction made. The loan and the attendant contractual obligations were binding by virtue of section 12454, and the trial court was correct in deducting it.
The jury was properly instructed that upon the introduction of the policy and the submission of proper proofs of death of the insured, a presumption arose that all premiums had been paid and that the policy had not lapsed. Rousseau v.Brotherhood of American Yeomen,
The jury rendered a verdict for plaintiff. Reversible error was committed in excluding from the jury's consideration the original records of the company, showing the insured's account with the company, on the ground that such evidence offended the rule prohibiting the admission of testimony equally within the knowledge of the deceased.* A clerk of the company testified that she made entries showing the status of the insured's account on a separate card such as was made out and kept by the company in the ordinary course of business for each policyholder. Plaintiffs conceded that a photostatic copy of the card might be used were not the original inadmissible for the reason stated. Defendant claims that beneficiaries are not persons who may invoke *238
the protection of this statute. See Schempf v. New Era LifeAss'n,
There is considerable evidence in the case that tends to show that the policy had lapsed through nonpayment of premiums, but not sufficient so that we might hold that the contrary finding of the jury was against the great weight of the evidence or that the trial judge should have directed a verdict for the defendant. Inasmuch as we remand this case for a new trial on account of the error committed in excluding the card showing defendant's records for *240 the reason stated, it is unnecessary to review or weigh this testimony except to state that the manner in which the case was presented led to confusion rather than enlightenment. Mrs. Wilson stated that after the death of the insured she and her husband went to the company's office and delivered the policy and receipts for premiums to a Mr. Wadsten, assistant superintendent of defendant's office. She did not state what the receipts showed. Wadsten, in turn, gave her a receipt for the policy itself, but not for any premium receipts. The company offered to produce Mr. Wadsten for cross-examination by plaintiffs. Their attorney, however, did not accept the offer. On the other hand, defendant also might have assisted the jury by putting Mr. Wadsten on the stand. While the parties were technically within their rights, the testimony might have shed considerable light on the controversy.
It was stipulated by counsel, without prejudice to the claim of plaintiffs that a 30-day notice was required, that if the loan were valid and no additional premiums were paid after the one due October 22, 1929, the automatic extended insurance provided for in the policy would extend the life of the policy only 35 days. This would run from January 22, 1930, and expire on February 26, 1930, more than a year before the death of the insured. As the jury found that all the premiums had been paid, the question of extended insurance was not an issue in the lower court. Had the records of the insurance company been introduced, or fuller testimony given, the jury might have reached a different result. On the new trial, should it be found that not all the premiums were paid and should the plaintiffs rely upon automatic extended insurance in an attempt to show the life of the policy extended beyond the death of the *241
insured, it should be noted that as the loan was valid, it would have to be deducted from the cash surrender value of the policy in computing the amount of automatic extended insurance. The policy so provides, and the cases interpreting such provisions have so held. Pilot Life Ins. Co. v. Owen (C. C. A.),
We shall not discuss any other questions that suggest themselves, but are not raised in the briefs. The judgment is reversed and a new trial granted. Defendant will recover costs.
NORTH, C.J., and FEAD, WIEST, BUSHNELL, EDWARD M. SHARPE, and TOY, JJ., concurred. POTTER, J., took no part in this decision.
