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(146 N.E.)

right to maintain an action for damages., under the circumstances cannot object to the The first receipt in that case stated that the parties making the same. money was received as compensation for the accident, while later receipts made no reference to compensation; the words "without prejudice" being added. The workman there was a minor, and testified that he did not know he had an option of claiming compensation or prosecuting an action against the wrongdoer for damages. Under the facts it was held the workman had recovered compensation and could not maintain the action for damages.

[2] Under the Workmen's Compensation Act of England the workman could take proceedings both against a third person to recover damages and against his employer for compensation, but he could not recover both damages and compensation. He had to elect before there was a recovery. Under our act. the workman may prosecute his action for damages to judgment, and he may also have his claim for compensation allowed, but he is prohibited from collecting both from the wrongdoer and from the employer. He must elect from which one he will collect. If he collects compensation, he cannot collect damages.

[3] It is clear that neither appellee nor his employer understood or intended that the receipt by appellee of the $20.76 should bar

[4] It is not the purpose of the statute to protect a negligent third party to the extent of relieving him from liability. It does undertake to protect him from double liability. Under the pleadings and the evidence in the case at bar, the payment to appellee being a gift, there is no right of action by the lumber company or its insurance carrier for indemnity. If appellant had so desired, it by proper proceedings could have brought the lumber company and its insurance carrier in and required them to answer as to their interest. It would seem, however, that appellant is fully protected from the possibility of having to indemnify the employer or the insurance carrier. See Employers' Liability Assur. Corp. v. Indianapolis, etc., Tr. Co. (Ind. Sup.) 142 N. E. 856, 144 N. E. 615.

We hold that the verdict is sustained by the evidence, and is not contrary to law. What we have said disposes of the questions concerning the overruling of the demurrer to the several paragraphs of reply and the refusal to give instructions.

Finding no reversible error, the judgment is affirmed.

FOX v. SLUSSER. (No. 12177.)

him from collecting damages from appellant. (Appellate Court of Indiana. Division No. 2.

That matter was discussed at the time ap-
pellee accepted the check, which was before
the agreement was approved by the Indus-
trial Board. Appellee testified that the
check was given to him as a gift. We do
not overlook the fact that at the time appel-
lee received the check he and his employer
entered into an "agreement in regard to the
compensation for the injury sustained" by
appellee, and that there was attached to said
check what was designated as a "compensa-
tion receipt," which recited that appellee
had received of his employer the sum of $20.-
76 in "settlement and satisfaction of all
claims for compensation or damages
on account of injuries suffered" by appellee
August 11, 1920, while in the service of the

*

*

lumber company. While this is a plain and unequivocal acknowledgment of a payment

March 18, 1925.)

1. Master and servant 417(7)-Finding of Industrial Board, on evidence final.

Finding of Industrial Board that employé was not injured because of willful misconduct, within Workmen's Compensation Act, § 8, will not be disturbed, where based on evidence. 2. Master and servant 375(1)—Injury held in course of employment, though act was in violation of order.

Although act which caused injury was done in violation of order or direction of employer, injury held to arise out of course of employ

ment.

Appeal from Industrial Board.

sation Act by Calvin E. Slusser, claimant, opProceeding under the Workmen's Compenposed by Frank E. Fox, receiver of the Farm

ers' Mutual Electric Light & Power Association, employer. From an order of the Industrial Board granting an award, employer appeals. Affirmed.

Lloyd T. Bailey and Geo. O. Compton, both of Columbia City, for appellant. Whiteleather & Bloom, of Columbia City, for appellee.

of compensation, and in the absence of fraud or mistake should be final and conclusive, the receipt is not contractual in the sense that the statement that the money was received for compensation cannot be contradicted by proof that the same was received as a gift. The jury found that the money was paid to appellee as a gift, with the agreement and understanding that it should not and would not interfere with or prevent appellee from prosecuting an action against DAUSMAN, C. J. Calvin E. Slusser reappellant for damages, and the evidence is ceived an accidental injury while in the emsufficient to sustain that finding. Such an ployment of Frank E. Fox, receiver of the agreement is not prohibited, and appellant | Farmers' Mutual Electric Light & Power As

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

sociation, for which injury the Industrial, 5. Insurance 1791⁄2-Loan contract on inBoard awarded compensation.

[1] The receiver contends that the employé is not entitled to compensation because of willful misconduct, within section 8 of the Compensation Act (Acts 1919, p. 158). The Industrial Board found against the contention and the evidence tends fairly to sustain the finding. Therefore this court cannot disturb the award. Artman's Manual, p. 93 et seq.

[2] The only other contention is that the workman's injury did not arise out of the

employment because the act which caused his injury was done by him in violation of the order or direction of his employers. The contention cannot be sustained. Artman's Manual, p. 60.

The award is affirmed.

surance policy providing that insured might have interest added annually to principal construed.

Loan contract on life insurance policy, made at time of issuing policy to obtain money with insured might have interest added annually to which to pay initial premium, providing that principal, held to mean, when construed in light of policy, that insured might have interest annually added to principal for such time as indebtedness created thereby did not exceed reserve value of policy.

Appeal from Circuit Court, Delaware Coun

ty; Clarence W. Dearth, Judge.

Action by Clara M. Brammer against the Reserve Loan Life Insurance Company wherein Clara M. Brammer, as administratrix of the estate of William E. Brammer, was made a party defendant. Judgment for plaintiff, and defendant insurance company appeals. Reversed with instruction.

Guilford A. Deitch and Frank G. West,

RESERVE LOAN LIFE INS. CO. v. BRAM- both of Indianapolis, and Orr & Clark, of

MER. (No. 12140.)

(Appellate Court of Indiana. March 20, 1925.) 1. Insurance 1792-Policy held to termi. nate on insured's refusal to pay interest or loan when loan with accumulated interest exceeded policy's reserve value.

Life insurance policy written under Acts 1909, c. 95, § 5 et seq. (Burns' Ann. St. 1914, 8 4622a et seq.), providing that insured's failure to pay any loan or interest thereon should not avoid policy, unless total indebtedness to insurer should equal or exceed legal reserve, terminated on insured's refusal to pay interest or loan on policy when loan, together with accumulated interest, exceeded reserve value of policy as determined by table of values attached there

to.

Muncie, for appellant.

White & Haymond, of Muncie, for appellee.

PER CURIAM. Action by appellee, Clara M. Brammer, against appellant to recover on a policy of life insurance issued by appellant on the life of Wm. E. Brammer, husband of appellee. Appellee, as administratrix of the estate of her husband, was made a party defendant. There was a trial by the court which resulted in a finding and judgment in favor of appellee. The error assigned in this court is the action of the court in overruling appellant's motion for a new trial, which presents the question of whether or not the policy terminated upon the failure of the policy holder to pay interest on a policy loan

2. Insurance 1792 - Statute relating to from and after the time the indebtedness on loans on insurance policy construed.

Acts 1909, c. 95, § 5, subd. 9 (Burns' Ann. St. 1914, § 4622a), providing for stipulation that failure to repay any loan or interest shall not avoid policy, unless indebtedness to insurer shall equal or exceed such loan value at time of failure to repay, means that, if indebtedness equals or exceeds legal reserve from policy, failure to pay any loan or interest thereon does avoid policy.

3. Insurance 151(1)-Statute providing that policy and application shall constitute entire contract between parties construed.

Acts 1909, c. 95, § 5, subd. 3 (Burns' Ann.

St. 1914, § 4622a), providing that policy and application shall constitute entire contract between parties, means policy contract alone, without necessarily contemplating that at same time a loan would be made to insured.

4. Insurance 1792-Loan contract not construed to abrogate any provision of policy. Loan contract made at same time that life insurance policy was issued would not be construed to abrogate any provisions of policy, but in harmony therewith.

account of such loan equaled the policy values as set out in the table of guaranteed values attached to the policy. The only evidence at the trial consisted of a stipulation of facts, which, so far as here involved, was as fol

lows:

[1, 2] On November 1, 1917, appellant issued its policy for $5,000 to William E. Brammer, who was the husband of appellee, the benefar as here involved, provided that it was isficiary named therein, which said policy, so sued in consideration of the payment in advance of a premium of $2,476.25 to be continued upon the further payment of a renewal premium of $145.05 on the 1st day of November of each year thereafter until two such annual premiums had been paid, or until the prior death of insured.

Under "Privileges and Conditions," the policy was indorsed: "A loan of $2,275 made on this policy under date of November 1, 1917." This was the full amount of the loan value as shown by the table of values in the policy. After the table of values, the policy

(146 N.E.)

on said loan evidenced by said loan agreement. The company prior to November 1, 1921, notified the said Brammer in writing that it would not be possible for it to add the interest accruing November 1, 1921, to the principal of the loan, as to do so would cause the indebtedness to exceed the policy reserve, and that it would therefore be necessary for him to remit to the defendant company on or before the said 1st day of November, 1921, the sum of $164.34, being the interest from November 1, 1920, to November 1, 1921, in order to continue said policy in force.

further provided that any indebtedness might be paid in cash, or, if not so paid, the cash and loan values would be reduced by the amount of the indebtedness; that the paid-up insurance would be reduced in the ratio of the indebtedness to the net value of such paid-up insurance; that the extended insurance should be for as long a term as the balance, left after deducting the indebtedness from the net value of the extended insurance, would purchase as a net single premium; and that failure to pay any loan or interest thereon should not avoid the policy unless the total indebtedness to the company should equal or exceed the legal reserve. At the time of issuing said policy, and for the purpose of enabling the said Brammer to meet the single premium of $2,476.25, required by said policy to be paid in advance, and at the instance and request of the said Brammer, the company agreed to loan him the cancellation of said policy, and did not the sum of $2,275 provided he paid the balance in cash, which he did. The said sum of $2,476.25 provided in said policy was paid by him in the manner aforesaid. The reserve on said policy at the end of the first policy year was $2,275 which amount also equaled its cash or loan value at said time.

To evidence the agreement as to said loan of $2,275, Brammer executed a loan agreement to the company of the same date as the policy in which it was provided that he borrowed of the said company on the said policy (which was assigned to said company) the sum of $2,275 which loan and indebtedness was to draw interest at the rate of 6 per cent. per annum, beginning one year from the date thereof, but the insured might elect to have interest added annually to the principal of the loan. The agreement further provided that the loan should be automatically extended from year to year, so long as the premiums on said policy were duly paid, until final settlement is made on said policy. The single premium of $2,476.25, required by the terms of the policy to be paid in advance, to the extent of $2,275 was not otherwise paid than by the said loan agreement so made. The two annual premiums of $145.05 each due respectively on the 1st days of November, 1918 and 1919, were paid by the said Brammer to the company in cash.

At the time of the execution of said policy and loan agreement, the said Brammer elected to have the annual installments of interest on said loan added to the principal of said loan as authorized by said loan agreement, and no interest was paid by said Brammer on said loan, and said annual installments of interest were annually added to the principal of said loan by said insurance company, and on November 1, 1921, the indebtedness including interest amounted to at least $2,719.56, which exceeded the legal reserve which was $2,710.

Said Brammer and no person for him ever paid any portion of the principal or interest

On November 2, 1921, the company duly notified Brammer that said policy had been canceled, and in said notice offered to reinstate said policy upon payment of the interest accruing November 1, 1921, of $164.34, provided said Brammer was then insurable. Brammer protested to said company against

at any time pay the said sum of $164.34 for interest as demanded by the company, nor was the said loan or the previous installments of interest thereon ever paid to the said insurance company by said Brammer or by any one on his behalf, nor did he after the 1st day of November, 1921, ever request a reinstatement of said policy, and at no time after the said 1st day of November, 1921, was said policy reinstated on the books of the company, but at all times after November 1, 1921, was carried on the books of the company as lapsed and canceled.

The policy here involved was written under the act of the Legislature approved March 5, 1909. Acts 1909, p. 251, § 5 et seq. (Burns' R. S. 1914, § 4622a et seq.). Subdivision 7 of section 5 of such act requires a table showing the loan values of the policy, and also the cash, paid up, and extended insurance options upon the surrender, or available under the policy each year upon default in premium payment, and providing that such values shall be equal to the full reserve of the policy. The policy here involved contained such a table showing the loan value, which pursuant to the statute was equal to the full reserve. It has been heretofore noted that the loan made by appellant to Brammer was the full amount of the policy loan value.

Under subdivision 9 of section 5, the company was required to make such a loan upon demand therefor by the insured, and upon a proper assignment of the policy to secure the same. This section of the act also provides that:

"It shall be further stipulated in the policy that failure to repay any such loan or pay interest thereon shall not avoid the policy unless such indebtedness to the company shall equal or exceed such loan value at the time of such failure. * **" (Our italics.)

The necessary meaning and inference from this last provision of the statute is that, if the indebtedness to the company equals or ex

ceeds the legal reserve from the policy, thened to the principal of the loan until the date and in that event a failure to pay any loan or interest thereon does avoid the policy, and that is the situation with which appellee is confronted in this case, for it appears by the stipulation of the parties that the reserve value of the policy on November 1, 1921, was $2,710, while the indebtedness at that time including the interest was $2,719.56 by the method of computing the same most favorable to appellee.

of the death of the insured, and that the amount should be deducted from the $5,000 then due on the policy, but such contention cannot prevail. The options of the policy as to paid-up insurance or extended insurance for $5,000 were available to the insured only in the event that the loan had not been made to him or, having been made, that the same had been paid in cash. Having accepted the loan, these options were modified by the terms of the policy itself. It is expressly provided in the policy that, if the loan is not paid in cash, then the cash and loan values will be reduced in the ratio of the indebtedness to the net value of such paid-up insurance, and the extended insurance shall be for so long a period as the balance, left after deducting the indebtedness from the net value of the extended insurance as shown in the table, will purchase as a net single premium. But the insured, having negotiated a loan for the full reserve value of the policy, the same, together with the accumulated interest, reduces the cash and loan value, which is the same as the reserve value, until the same becomes a minus quantity, and, under the construction that we have given the statutory provisions and the provision in the policy in the event the indebtedness should exceed the reserve of the policy, the same is voided. The fact that the premium payments had been completed did not annul the provisions of the policy relating to loans, extended insurance, and paid-up insurance. Appellant will hardly contend that at any time after such completion the insured might have not negotiated even a larger loan than the one here involved, and, had such loan been for the full amount of the reserve value, or had the indebtedness in time by the accumulation of interest equaled the reserve value the insured could not then claim further benefits under the policy. Authorities that hold that, where there is an indebtedness growing out of a policy with provisions similar to the provisions in the policy here involved, the same should be deducted from the cash surrender value of the policy, and that in the event the indebtedness equals or exceeds the reserve value of the policy the company will not be required to continue the same, are numerous. The policy involved in the case of Cotnam v. Massa

It clearly appears then that the insured had received at a fixed date before his death, in the form of a loan, an amount which, together with the accumulated interest thereon, was in excess of the full reserve value of the policy. It cannot consistently be contended that in addition thereto he should have the benefit of the provision of the policy as to cash settlement, paid-up insurance, or extended insurance. There was no cash due him; on the contrary, he was on that date indebted to the company. There was nothing with which to purchase paid-up insurance or extended insurance. Having accepted the full reserve value of the policy in the form of a loan and accumulated interest, he certainly was not in a position to demand more. Appellee argues that the provision of the loan agreement that the insured might have the interest annually added to the principal of the loan was a modification of the policy provision as to the indebtedness which the parties had a right to make. But the loan agreement was not made subsequent to the time of issuing the policy, but at the same time and for the purpose of obtaining money with which to pay the initial premium. [3-5] It is true that the statute provides that the policy and the application shall constitute the entire contract between the parties. This, however, speaks with reference to the policy contract alone, and without necessarily contemplating that at the same time a loan would be made to the insured. But whether or not the loan contract, being executed at the same time as the policy was executed, and that therefore the two instruments are to be construed together as one contract, the loan contract made at the same time the policy was issued must not be so construed as to abrogate any of the provisions thereof, but must be construed in harmony therewith. The provisions of the loan contract that the insured might have the in-chusetts Mutual Life Insurance Co., 180 Iowa, terest annually added to the principal, con- 1141, 162 N. W. 786, was similar in this restrued in the light of the provisions of the gard to the policy here in suit. It was there policy, can only mean for such time as the contended that the cash surrender value of indebtedness created thereby did not exceed the policy should be applied as a net single the reserve value of the policy. The pre- premium to the purchase of paid-up insurmium having been paid in full, had there ance, the indebtedness deducted therefrom, been no indebtedness the insured would have and the judgment entered for the balance; been entitled to a paid-up life policy for $5,- but the court denied the contention, and held 000, but the $5,000 at the death of the in- that such indebtedness was first properly desured was not the reserve value of the policy ducted from the cash surrender value of the on November 1, 1921. Appellee reasons that policy, and that then the balance should be apunder the contract the interest should be add-plied as a net single premium to the purchase

(146 N.E.)

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Disability; Second Series, Impairment.]

2. Master and servant 416-Finding of Industrial Board must be sufficient to support award.

of paid-up insurance. In the case of Federal | for disability; as "impairment" means total or Life Insurance Co. v, Warren, 167 Ky. 740, partial loss of function of member, or of body 181 S. W. 331, the policy was very similar as a whole, and not loss of earning capacity, to the policy here involved, and the same conwhereas "disability" means inability to work, tention as to deduction of the indebtedness and not loss of member. from the face value of the policy was made, but the court held that the indebtedness should be deducted from the cash surrender value of the policy as shown by the table, and that the balance should be applied as a single premium to the purchase of paid-up insurance. The same principle was involved in the case of Brunson v. Northwestern Life Insurance Co., 75 Ind. App. 39, 129 N. E. 636, and this court there held that, when the indebtedness due the company by reason of the policy was deducted from the loan or reserve value of the policy, there was nothing left, and that therefore the policy lapsed and was wholly without force at the time of the death of the insured. Other authorities to the same effect are Stevens v. Mutual Life Insurance Co., 227 N. Y. 524, 125 N. E. 682, 18 A. L. R. 1141; Dibrel v. Citizens' National Bank, 152 Ky. 839, 153 S. W. 428; Rose v.

Missouri State Life Ins. Co., 165 Mo. App.

646, 148 S. W. 181; McCall v. International Life Ins. Co., 196 Mo. App. 318, 193 S. W. 860; Dewerthern v. Reserve Loan Life Ins. Co. (Mo. App.) 234 S. W. 1048; Short's Adm'x v. Reserve Loan Life Ins. Co., 175 Ky. 554, 194 S. W. 773; Adams v. Mutual Life Ins. Co., 76 Ind. App. 598, 132 N. E. 688.

Industrial Board must find facts sufficient to sustain award under Burns' Ann. St. Supp. 1921, §§ 8020r2 and 8020s2, although it is not bound by strict rules of procedure applicable in actions of law.

Dausman, C. J., dissenting.

Appeal from Industrial Board.

Proceeding under the Workmen's Compensation Act by Evan Hawkins for injuries, opposed by the Northern Indiana Power Company, employer. From an order of the Industrial Board dismissing petition to vacate and set aside award, the employer appeals. Reversed, with directions.

Bell, Kirkpatrick, McClure & Elliott, of Kokomo, for appellant.

Overson & Manning, of Kokomo, and Turner, Adams, Merrell & Locke, of Indianapolis, for appellee.

MCMAHAN, J. This is an appeal from the Industrial Board. In accordance with an agreement, appellee was awarded compen

In harmony with the principles announced in the foregoing authorities, appellee having refused to pay the interest on the loan at a time when the loan together with the ac-sation during total disability. Later appelcumulated interest exceeded the reserve value of the policy as determined by the table of values attached, appellant was thereupon justified in canceling the policy, and at the death of the insured there was nothing due thereon. The judgment is reversed, and, the facts in this case appearing by an agreed stipulation and therefore undisputed, we see no need of a new trial. The court is therefore instructed to enter judgment for appellant.

NORTHERN INDIANA POWER CO. v.
HAWKINS. (No. 12161.)

(Appellate Court of Indiana. March 17, 1925.)

I. Master and servant 416-Finding of permanent "impairment" to earning wages, rather than "disability" to so do, held not to support award.

a

lant filed an application for a review on ac-
count of a change in condition, alleging that
the disability of appellee had ended. Appel-
lee also filed an application to review on the
ground that his injury had resulted in a per-
manent partial impairment. A hearing on
these applications was had before a single
member, and on September 12, 1924, the full
Board on review made a finding that appel-
lee's injury had resulted in an 80 per cent.
"permanent impairment as a man, that is he
is 80 per cent. impaired to work and earn
wages." Appellee was awarded 400 weeks'
compensation at the rate of $13.20 per week,
the total not to exceed $5,000. On Septem-
ber 17, appellant filed a verified petition to
vacate and set aside the award, for certain
This motion was dismiss-
specified reasons.
ed by the Board on its own motion. The
errors assigned are that the Board erred in
overruling the motion to vacate the award,
and that the award is contrary to law.

Having come to the conclusion that the award must be reversed because of the insufficiency of the finding to sustain the award, we need not, and do not, pass upon the question relating to the dismissal of the motion to vacate the award.

Finding of permanent "impairment as man, that is, 80 per cent. impairment to work and earn wages," which was clearly based on "disability," held not to support award under Workmen's Compensation Act, § 31, as amended by Acts 1919, c. 57, under clauses providing for award for impairment, nor under clauses [1] Section 31, clauses (a), (b), (c), (e), (f), For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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