ARK.] CONTINENTAL LIFE INS. CO.-V. GRAY. 65 CONTINENTAL -LIFE INSURANCE-COAiPANY ff -4-3t65 • • Opinion delivered October. 30, 1933;: 1. INSURANCE—LOAN vALUE.—Where a life policy contained a: table showing its loam value after iiityment of seven annunl preniiunis,
66 'CONTIN-ENTAL-LiFE JNSQO V:--GRAY; - ---[188- such. loan value is available after payment of .the seventh annual premium and before payment of the eighth annual .premium. CONTRACTS—FoRFEITURES.—Forfeitures are frowned upon by the court. . INSURANCE—ADVANCE 'OF PREMIUM.—Where a life ' policy provided that the insurer would advance any premium becoming' due as • a loan against the policy provided the Joan ' value of the policy is, sufficient to cover same, the insurer cannot declare a forfeiture . of the . policy for nonpayment of the premium when it has in its hands sufficient funds of insured to pay the premium.. . INSURANCE—ADVANCE OF PREMIUM:—A loan value sufficieni meet a quarterly premium must be so applied by the insurer to prevent forfeiture of a life policy for nonpayment of an annual • premium; though insured had not elected to make quarterly payments. 5. INSURANCE—PENALTY AND ATTORNEY'S FEE.—Assessment of ihe - statutory penalty and attorney's fee was properly Made against an insurer which denied liability in suits on . life policies by the beneficiary who recovered the-amount sued for less premiums due -: to insurer. Appeal from -Miller Circuit Court; Dexter Bush, Jadge; affirmed. . Charles • G. ReVelle, Courtney S. Ooodnzan and Ai-- Aniold, for appellant. Pratt E. Bacon and Shaver, Shaver .,& * Williams, for appellee. . , ,t • • -11-mymatEys, J. Appellee brought separate suits in the circuii .court of Miller.County to recover from appellant: the sum of $2,500 less $265 borrowed by the . insured from appellant on .each of two life insurance. policies issued by appellant to her husband, in which she was ,the beneficiary. Appellant filed an answer in each case, denying any liability whatever. The cases were consolidated for the Purposes of trial and submitted upon the pleadings and testimony. At the conclusion of the testimony, it was agreed that there was no dispute on tbe 'facts, and each party asked for an instructed verdict; whereupon the court instructed a verdict in favor of appellee for $2,500 less $292.05 on policy No. 67782, and a Verdict in favor 'of appellee for $2,500 less $296 . . , 60 on policy . No. 68195, and rendered judgments in accordance_With the verdict, from which is this-appeal.
ARK.] CON TINENTAL LIFE INS. CO . v. GRAY. 67 The first policy was issued and•delivered on the 26th day of February, 1925, and the second on the 14th day of March, 1925. Each. policy was issued in consideration of an annual premium of $70.33, payable annually in advance. Seven annual premiums were paid as they matured, the last being paid respectively on February 26th and March 14, 1931, which carried the policies respectively to February 26th and March 14, 1932.. Prior to the paythent of the last premiums, the insured had borrowed on each policy $265. Each .policy contained -a table of nonforfeiture and loan values, showing that; after the payment of the seventh premium, the loan value on each' policy was $320. The insured did not pay the premiums on February 26th and March . 14,1932,:respectively, either at the time or within the grace period. Insured died on , the• 7th day of June, 1932. • The main' contention, of appellant for a reversal of the judgment is that the loan value of $320 was not available axing the 7th year or until the 8th annual premium had been paid. We•find nothing ih the table of loan values supporting such a contention. . The paragraphs in the policies relative to- c ` cash loans" and "antomatic premium loans . " "clearly provide that appellant will lend' on the sole security of these policies any sum within the loan value stated in the table of loan values for the year in which the loan is made ; and ibat appellant will' advanCe any premium becoming due as a loan against the policy provided the loan value of the policy is sufficient to cover same and provided further that insured ,Shall• have made written request therefor, either in .the application • or otherwise. Under the rule announced. in the •daSe.Of souri State Lifeinsurance Company v. Miller, 163:Ark. 480, 260 S. W. 705, the loan value of these policies was available after tbe payment of the seventh anmial premium and 'before -the payment..of :the eighth. annual premium. The insured had borrowed only $265 on each policy, leaving a loan balance of $55 on each, which was more than, eneugh, in the hands of -appellant to pay the premiums beyond the death of the insured, which occurred on June 7, 1932. Forfeitures are frowned upon by the courts, and insurance companies will not be• per-
• mitted to declare forfeitures for nonPayment Of pre-mimns as long-as they have funds available in their hands with which' the preminms might be paid. - The duty rests upon them- to pay the premiums •ont- of such funds and therebY prevent forfeitures. • Security Life Insurance Co. Vi Mathews, 1.78 Ark. 7Th, 12 S.. W. (2d) 865: Appellant contends, however, that the premiums had been paid annually, and that.there was not suffic i . ent loan value to pay the • full annual Premium, and that the insured bad not exercised an• electiOn under • the policy to have the annual: payments changed to quarterly paymentS: This make's . no'difference. A !legal diity rested npon appel-lanfto make the application as . far as it would go in order to protect 'the . policyholder. : We so ruled in the bases of Mutual Life Insur once Company v. Henley, 125 Ark. 372, 188 S. W. 829, and Pfeifer v. Missouri State Life, insurance Company, 174 Ark: 783, 297 . S. W. 847. Appellant 'also contends for a reversal of the judgment.because the court imposed the statitory penalty and attorney'sifee uPon it. This : contention is made upon the theorY that less was re'covered • than sued for. Appellant denied any liability.whatever or. that appellee was entitled to any sum on the , giound that the polinies had been forfeited.. ; The fact-is that appellant • really recovered the- amount • sued fOr..- The only amount . that the court deducted . *as the premiums due' to . appellant by the in-silted from -February and March, 1932,. • to-the date of the insured's death, which occurred on June 7;4932: This Point was' decided adversely to the contention 7 of.: appellant iii the'•case of Life.ke Casualty Company V. SanderS, 173 . Ark. 3e, 292,.S. W. 657.. . • • ..No error. appearing, .the judgment' is- affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.