Metropolitan Life Insurance Co. v. Calkins

Gardner, J. 1. The defendant in error filed a motion to dismiss the bill of exceptions. There is no merit in this motion. 2. Since the court disallowed the attorney’s fees and the claim of penaltjq this assignment of error is moot. 3. The only'question to be determined is whether, in view of the provisions of the policy with reference thereunder, and the loan certificate, considered together, in the light of the facts of this case, the interest was payable in advance at the premium paying period, or was payable a year thereafter. It will be observed from the *250 allegations of the petition and the evidence that the loan, to all intents and purposes, was made on February 21, 1937, for the principal sum of $297.82. On the next anniversary, February 21, 1938, nothing was done with reference to the loan, either by the insured or the company. On May 25, 1938, the company wrote the insured sending him a statement to the effect, as shown by No. 7 of the stipulation, that unless $6.68, an amount sufficient to pay the balance of interest in advance to February 21, 1939, was paid within thirty-one days, the policy will be cancelled. Payment was not made, and the company entered a cancellation of the policy. The status thus stood. The insured died November 28, 1939. On February 21, 1938, there was a sufficient loan value to take care of the interest for the first year, but not enough to pay this earned year’s interest and a year in advance to the next anniversary of the policy note. On this anniversary, February 21, 1938, which was the beginning of the second anniversary, the company did not demand advance interest, as it had not demanded it in the first instance, when the loan was made. Indeed, there was not a sufficient amount of loan value on the policy to make the principal loan which was made and at the same time pay the interest in advance. It is true that the provisions of the policy alone may be construed that the company had the right to demand interest in advance when the loan was first made, Feb. 21, 1937, and we do not hold that it could not have done so at a subsequent anniversary date; but, notwithstanding the rights of the company under the policy as to this, the parties had a right, in a supplemental agreement as to this provision of the policy, to change the right as to the time of payment of interest. This same principal was very ably and exhaustively dealt with by Justice Atkinson in State Life Insurance Co. v. Tyler, 147 Ga. 287 (93 S. E. 415). The court was there dealing with a premium note, but we fail to see any difference in principle. The court held: “A contract of life insurance, as expressed in the policy issued by a company to an individual, may be supplemented by a subsequent contract between the parties, expressed in a promissory note given by the insured to the insurer for a premium on the policy and providing for a termination of all rights under the policy for nonpayment of the note, although the policy contain no such provision.” By reference to the loan certificate in the case at bar, as above set forth, it will be observed *251 that it is stated: “Said loan shall bear interest from the date the loan is granted at the rate provided in said policy, payable annually on the anniversary date of the policy.” (Italics ours.) This principle was announced approvingly by this court in Missouri State Life Insurance Co. v. Bozeman, 48 Ga. App. 640 (173 S. E. 183), in dealing with a question of loan interest. We will discuss this case later. Hence it follows that the time for the payment of interest in the case at bar is to be determined by the loan certificate or supplemental agreement. Under the loan agreement interest was due and payable on the next succeeding anniversary date of the policy following the date of the loan, or on February 21, 1938. On this last date there was a sufficient amount to take care of this past-due interest and thus extend the loan until the next anniversary date, February 21, 1939, under the loan agreement. Thus the loan was extended until February 21, 1939, and the company had no right arbitrarily to give notice and foreclose the policy on May 25, 1938. Such action was null. The company served no notice and demanded no interest as of February 21, 1939, as provided by the loan contract. Hence the policy remained in force and was alive and enforceable on the date of the insured’s death, November 28, 1939. What is said here is not in conflict with the decision announced by this court in Missouri State Life Insurance Company v. Bozeman, supra. In fact, the principle therein announced is in accord with what is here ruled. In that case the court held that a loan agreement to pay interest in advance was binding and enforceable. The insurance company had foreclosed the policy by giving the notice at the time and in the manner and in accordance with the provisions of the loan agreement. The principle announced in that and in this case is the same; the difference lies in the facts only. In Missouri State Life Insurance Co. v. Bozeman, supra, the company complied with the provisions of the loan agreement to foreclose the policy, while in the ease at bar the company did not clo so, but adopted an arbitrary method, foreign to the provision of the loan contract, in an attempt to foreclose it. Judgment affirmed. MacIntyre, J., concurs.