598 COLUMBIAN MUTUAL LIFE 'ASSURANCE [193
SOCIETY V. WHITEHEAD. COLUMBIAN M UTUAL • LIFE ASSURANCE SOCIETY V. *WHITEHEAD. 4-4518 : Opinion delivered February . 8, 1937: • . 1. SPECIFIC PERFORMANCE.—Specific perforniance will not be enforced of an executory agreement either to borrow or lend money, whether on security or not. • . 2. ,INSURANCE—BREACH OF coNTRACT.—Provision in a life insurance policy giving the insured a right to borrow money on the policy after a certain number of premiums , have been •paid is part of the contract, and' the insuted is entitled to loans in accordance .with the Conditions Stated, and : has the right to maintain an action for . : damages Where -the insurer refuses to- make a loan ,accordirig, to its 'contract. 3. INSURANCE—BREACH OF . CONTRACT—MEASURE OF DAMAGES.—The measure of damages for breach of contract by an insurance company to make insured a joan on the policy is the difference be-tvieeh the 'rate of interest at 'Which defendant agreed to furnish the money and the rate, not exceeding the legal : rate; which plain-• tiff Was .reeluired.to. pay elsewbere i in the absence of an avei-• : ment that the money was desired for a 'special. purpose known to defendant, and rthat it could not be procured ielsewhere. • Appeal from Columbia Chancery' Court ; . Walker Smith, Chancellor; reversed. • Stevens &Stevens; for appellant: McKay & McKay - and Whitley & Utley, for aPpellee. • • GRIFFIN . SMITA, C. j. Appellee iiin g ured under appellant'S life, health, and accident policy, by the terms of which he-is 'entitled to stipulated loan Values. Appellee applied to appellant for a loan, • anditwas • refilSed, whereupon suit Was filed in chandery. A demurrer to the com-plaibt . was, overitiled and 'appellant declined to • plead ftirther:' • . .
ARR.] COLUMBIAN MUTUAL LIFE ASSURANCE 599
SOCIETY V. WHITEHEAD. After finding what amount appellee was entitled to receive as 'a loan; the decree recites- that "Defendant is hereby ordered, upon: plaintiff's request for- the .proper blanks for making a-loan, to furnish plaintiff -with same; and when plaintiff -properly executes said blanks and delivers them duly executed ' ' ' to make. the .lOati:". Appellant is a foreign corpokation. - When the . IA-- icy of insurance waS iSsued to Appellee in August, 1920, appellant had been admitted to do buSiness in this State. Sununons was served on the comMissioner of insurance. There is no: showing that appellant maintains any, office in the state) or that any-of .the corporation's executive officers .are -within the •jurisdiction of the court We are of the opinion. , ,that, under the pleadings,. specific performance will ,not lie. 'An .agreement to borrow a_ sum of money + and giye_ security_ for ,it.cannot be specifically enforced; And this is also frue of an agreement to lend money, whether on security or not." 58 C. J., p. 1055. "As a general rule specific performance will not be enforced of an executory agreement either to borrow or lend money." 25 R. C. L., p. 231. Annotations at page 895, 4 A. L..R., are as follows : "Provisions giving the insnred a right to borrow on tbe policy after a certain, number .of -, premiums have been paid are how coMmonly found in life insurance policies. This right in many instances- is 'a potent fac-' tor iri . indUcing , the • taking of a policy. .it is a part of the contract,' and the insured is entitled to. lodris in:accordance with the conditions stated in. such provisions, and clearly has the right to maintain an action for .damages in case- the insurer refuses 'to -make a loan accord-' ing to its Contract." . • In New York Life . CO . . \;. Pope, 139 Ky. 567, 68 S. W. 851. it was said: "The measure of, , damages for breach of a contract by defendant to make- plaintiff a loan is the difference between the rate of- interest at which the defendant* agreed To . fnrnish the money and the rate, not exceeding . the. legal rate, 'which Plaintiff was required to pay elsewhere, in the absence Of an aver-ment that the money was desired for a special use known to the defendant, and that it could not be procured else-
600 [193 where." Also, in.Hubbard v. Equitable Life . 4 4ssur. Soc., 81 W. Va. 663, 95 S. E. 811, 4 A. L. R. 886, it was held that "a breach of an agreement to make a loan upon a life .policy, where, the insured was compelled to borrow money on other collateral and pay a higher rate of interest, insured may recover the excess interest and rea-. sonable value . of his services in procuring the loan, but not for the use of his other collateral." There is no allegation that * appellee was unable to borrow elsewhere. Neither is it claimed that appellee, through appellant's refusal to -make the loan, would be subjected td inconveniences or losses of a special nature known to appellant for which compensation could not be computed in an action at law. We conclude that the demurrer should 'have been sustained. The decree is reversed, and the cause remanded with directions to sustain the demurrer.
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.