National Life Ass'n v. Berkeley

Harrison, J., delivered the opinion of the court. The policies for $2,000 and $1,000, respectively, involved in this controversy were originally issued upon the life of E. B. Berkeley by the Valley Mutual Life Association, of Staunton, Va. This company having failed, its subsisting insurance, including the policies in question, was transferred to the plaintiff in error, the ETational Life Association of Hartford. In lieu of the original Valley Mutual policies, the plaintiff in error issued to the insured the two policies involved herein. These latter policies were on their faces like the originals, for $2,000 and $1,000, respectively. As each policy presents for determination the same questions we will follow the example of counsel and consider only that for $2,000. This policy is upon its face a plain, unambiguous contract, by which the plaintiff in error agrees, in consideration of the stated bi-monthly premium of $12.50, to pay the beneficiaries, upon the death of the insured, two thousand dollars, less any indebtedness due the association; and is issued by the association, and accepted by the insured upon the express conditions and agreements given and set forth,upon the succeeding pages thereof, which are assented to as forming part of the contract. The only defence to this action is that the plaintiff in error is entitled to credit the face of the policy for $2,000 by certain premium liens provided for among the conditions and agreements printed on the succeeding pages of the policy. This .claim is met by the defendant in error with the answer that the conditions and agreements relied on are not printed in type of the size required [579] l>y section 3252 of the Code, and therefore cannot avail to alter or change the plain terms of the contract between the parties expressed on the face of the policy. It is conceded that the conditions and agreements relied on are printed in type condemned by the statute as insufficient. It is, however, contended that the “ deferred premium ” or premium hen now sought to be deducted, is a part of the indebtedness due the association, which is referred to on the face of the policy as an item of credit before payment. This position is not tenable. The premiums referred to have never accrued or been earned, and now that the insured is dead, can never become due. The “ indebtedness due the company ” that is referred to in the policy is obviously any actual or real indebtedness that the insured or beneficiary may be liable for to the company when the policy matures. If premiums could constitute part of such indebtedness it could only be past due and fully earned premiums, as distinguished from future and unearned premiums. It is further contended by the plaintiff in error that the clause in question is neither a “ condition,” nor a “ restrictive provision,” but an “ agreement,” and therefore is not affected by the statute which requires such provisions to be in type of a prescribed size. The language of section 3252 is that “ no failure to perform any condition of the policy, nor violation of any restrictive provision thereof, shall he a valid defence to such action, unless it appears that such condition or restrictive provision is printed in type as large or larger than that commonly known as long primer type, or is written with pen and ink in or on the policy.” This statute was designed to supply a remedy for an existing evil, and is not to be frittered away by nice distinction between “ conditions ” and “ agreements.” It should rather receive a liberal construction, in order to fully accomplish the wise and manifest purpose of its enactment. It is obvious that the terms, “ conditions,” and “ restrictive provisions ” contained in the [580] statute were not meant in any narrow or technical sense; but were intended to cover any clause, expression, or provision, included in or appended to a policy, whereby the effect of the principal and essential part of the policy is modified, changed, restricted, or otherwise affected, so as to materially influence the rights and liabilities of the insured thereunder; and to make-such clause or provision of no effect as a defence unless it be printed in type of the size prescribed. If this were not so, the whole object of the statute could be defdated by merely changing the verbiage or grammatical arrangement of a clause so as to make it in form -an “ agreement,” rather than a “ condition,” or “ restrictive provision.” It might well be argued that the clause under consideration is, in substance and effect, both a condition and a restrictive provision, but this is not necessary. The effect being to take from the beneficiary more than one-half the face value of the policy, it is a matter of no consequence whether the language used be technically in the form of a “ condition,” an “ agreement,” or a “ restrictive, provision,” for the statute applies with equal force in either case, and under its terms when such a. provision is not in type of the prescribed size, it cannot be availed of as a valid defence. The third and last contention is that, inasmuch as the statute provides that the provision relied on may be either in writing, or type of the prescribed size, and inasmuch as the figures “ $1,110.00,” denoting the amount of the deferred premiums, claimed as a credit, are inserted in the provision with pen and ink, this relieves the whole clause from the operation of the statute. It is insisted that these figures are sufficient, because, being in writing themselves, the beneficiary is bound by knowledge of them, and having such knowledge he must also be chargeable with notice of the context, without which the figures would be meaningless, notwithstanding such context is in small type. This same argument would serve with equal force if the obnoxious provision had inserted somewhere in it, only one word, [581] letter, or figure with, pen and ink. The terms of the statute are plain, and its object equally clear. To give it the narrow construction contended for would practically destroy its value. It is not a question of notice. The provision relied on must be in writing or in type of a prescribed size, and this requirement cannot be satisfied by inserting a figure, letter, word, or even a sentence, with pen and ink. The whole provision relied on must be in writing, or type of the prescribed size, or it cannot be availed of as a defence to any action on the policy. In conclusion, we are of opinion that the clauses on the inner sheets of the policies involved in this case, whereby the amount the defendants in error would otherwise be entitled to recover is reduced, are clearly obnoxious to the spirit and intent of section 3252 of the Code, and therefore cannot be invoked nor relied on" by the plaintiff in error as a defence. Tor these reasons, the judgment of the lower court must be affirmed. affirmed.