Metropolitan Life Insurance v. Day

Evans, P. J. (After stating the foregoing facts.) There was no proof that the insured died by his own hand; and the only question is the right of the plaintiff to recover, and, if entitled to recover, the extent of the recovery, in the form of action brought by her. In the briefs of the plaintiff in error it is contended that the plaintiff is not entitled to recover anything in the present action, for that the suit is on the policy, and under the terms of the policy the plaintiff was entitled only to the supplementary contract providing for installment payments in the future, and that the refusal of the company to issue 'the supplementary contract did not authorize the plaintiff to recover the commuted value of the payments. The insurer promised to pay the beneficiary $136 upon the receipt of the due proof of the death of the insured, and to make fifty-nine further .payments .monthly thereafter of $25 each. The postponed payments were to be provided for by a supplementary contract. Upon the policy becoming a death claim, the insurer, upon receipt of proofs of the death of the insured, was bound to make the cash payment of $136, and to execute the supplementary contract providing for the payment of the future installments. It repudiated all liability under the policy, and refused to execute and deliver the supplementary contract. This breach of covenant by the insurer gave the plaintiff a- right of [429] action for damages, and the petition is sufficiently comprehensive to include a recovery for such breach. What is the measure of damages ? It will be observed that the insurer agreed to pay the installments in pursuance of a prescribed contract to be executed by the company after the policy became a death claim. The case is not like that where a policy calls for a series of installments directly payable to the beneficiary as a death claim. In such a case a refusal to pay the first installment would not authorize a recovery of others before they fell due. N. Y. Life Ins. Co. v. English, 96 Tex. 268 (72 S. W. 58). The beneficiary in the instant case could not recover at law for the various monthly installments by separate suit, for the reason that the insurer’s liability for the monthly installments was to be fixed by a contract, which it refused to execute. We therefore think that where the insurer breached the policy contract by refusing to execute the supplementary contract, it became liable to the plaintiff in damages. The measure of the damages is the loss sustained, which is the present value of the supplementary contract. This value is áscertained by reducing the future payments to their present worth at the date of the breach, at the legal rate of interest (7 per centum per annum), and interest on this sum from the date of the breach at the legal rate of interest. The verdict directed is indefinite, inasmuch as it omits to state the rate of interest to be used in reducing the installments payable in the future to their present worth; and' also because the verdict should have stated the calculation, instead of the mode of arriving at it. Accordingly, the judgment refusing a new trial is affirmed, with direction that the court arrive at the proper amount of the installments, payable in a single installment (including the cash installment of $136.00 and the 59 monthly installments of $35.00), by reducing the same to their cash value at the date of the breach (May 31, 1914); and that a verdict be entered for this sum, with interest on it from the date of breach at the rate of seven per centum per annum. Judgment affirmed, with direction. All the Justices concur.