On petition for rehearing the court said: / entered into an agreement concerning the

This “The Indiana statute expressly provides that right of appellee to compensation. the injured workman 'shall not collect from agreement was reduced to writing, at which both.' (Acts 1915, p. 392, § 13, supra.) Where time appellee received from his employer a the meaning of a statute is plain the courts check of the insurance carrier for the full must enforce it as it is written, and may not amount of the compensation agreed on. A resort to an artificial construction to conform few days later the agreement was filed with the law to what has been enacted in other and approved by the Industrial Board, and states in wholly different language.”

a short time thereafter the insurance carrier

paid the doctor in full for the services renWhether appellee collected compensation from his employer, within the meaning of the time appellee signed the agreement and

dered appellee on account of the injury. At the compensation under the issues, was a

accepted the amount named therein, there question of fact. If he did, this cause must

was no agreement or understanding that the be reversed, otherwise affirmed. In Mingo v. Rhode Island Co., 41 R. I. 423, employer or its insurance carrier was to be

reimbursed by appellee out of any damages 103 A. 956, the employee and employer en

he might recover from appellant. Ordinatered into an agreement in accordance with

rily, when an employer pays an injured em. the Workmen's Act, whereby the employer agreed to pay a certain sum for medical ployee the amount due under a compensaservices and a named weekly compensation. tion agreement which has been approved by

the Industrial Board, the employee cannot This agreement was approved by the proper prosecute an action against a third person authority, and the amount so agreed on as for damages, but the employer may maintain compensation was paid, subject to an agreement between the employer and the employee the amount he was required to pay the in

an action against the wrongdoer to recover that the latter should bring an action for

jured employee. damages against a third party whose negli

[1] We have no doubt but that an employ. : gence caused the injury, and that the employee should repay the employer all the er may make a gift to an injured employee

of the amount which he might be entitled to money received by him under the agreement out of the damages recovered from the third as compensation under the act, and that the party. It was there held that the employee any wise affecting his right to maintain an

employee may accept such gift without in was not precluded from suing the negligent action against some other person whose neg. third party. The court after a review of the English cases, in discussing a statute lee and his employer had a right to enter in

ligence caused the injury. Of course appelwhich provided that the employees shall not “receive both damages and compensation," and to have the same approved by the In

to an agreement concerning compensation, said :

dustrial Board, without affecting appellee's “The employer is given the right of indem- right to sue for and collect damages from nity against the negligent third person, with appellant. the intention that the final payment for the

In Kelly v. North British Ry. Co., 53 S. L. damages suffered by the employee shall be made, not by the employer, but by the negligent Rep. 53, a workman was injured through the third person who is responsible for the injury. negligence of the railway company. He reThe effect of the agreement in question is to ceived compensation from his employer unaccomplish this purpose of the statute and to der an arrangement in writing that the reaid the employer in securing the right of in- ceipt of compensation should be without prej. demnity given to him by the statute. It is not udice, and with the understanding that he the purpose of this statute to lessen or to intended to take action against the railway change the liability of the negligent third per company, and if he recovered damages from son who is fully protected therein from a double liability, and in our opinion it was not

the railway company he should repay whatthe intention of the Legislature to restrict the ever compensation had been paid him. The right of the employee to make and act upon court following Wright v. Lindsay, 49 S. L. such an agreement as the one in question, and R. 210, decided in 1911, where a similar arwe do not think that the mere approval by the rangement, partly in writing and partly oral, court of the agreement, procured by the initia- was held not to bar an action against the tive of either employee or employer, should be

wrongdoer. It was held in each of these construed as a bar to the employee's right of

cases that the payments were made for the action against the person responsible for the injury."

purpose of enabling the workman to tide

over the time that must elapse before the The evidence in the instant case very action against the wrongdoer could be disclearly and without conflict shows that with-posed of, and were not intended to be made in two weeks after his injury appellee con- by virtue of the Compensation Act. sulted a lawyer relative to his claim against In Aldin v. Stewart, 53 S. L. R. 49, where appellant for damages, and that the lawyer the workman accepted payment under cirwithin that time wrote a letter to appellant, cumstances showing that he was aware the making a claim for damages. About two payments were being made under the Workweeks later appellee's employer and appellee men's Compensation Act, he was denied the

(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 [4] It is not the purpose of the statute to accident, while later receipts made no refer- protect a negligent third party to the extent ence to compensation; the words "without of relieving him from liability. It does unprejudice” being added. The workman there dertake to protect him from double liability. was a minor, and testified that he did not Under the pleadings and the evidence in the know he had an option of claiming compen- case at bar, the payment to appellee being a sation or prosecuting an action against the gift, there is no right of action by the lumwrongdoer for damages. Under the facts it ber company or its insurance carrier for inwas held the workman had recovered com- demnity. If appellant had so desired, it by pensation and could not maintain the action proper proceedings could have brought the for damages.

lumber company and its insurance carrier in . [2] Under the Workmen's Compensation and required them to answer as to their inAct of England the workman could take pro- terest. It would seem, however, that appel. ceedings both against a third person to re- lant is fully protected from the possibility cover damages and against his employer for of having to indemnify the employer or the compensation, but he could not recover both insurance carrier. See Employers' Liability damages and compensation. He had to elect Assur. Corp. v. Indianapolis, etc., Tr. Co. before there was a recovery. Under our act. (Ind. Sup.) 142 N. E. 856, 144 N. E. 615. the workman may prosecute his action for We hold that the verdict is sustained by damages to judgment, and he may also have the evidence, and is not contrary to law. his claim for compensation allowed, but he What we have said disposes of the questions is prohibited from collecting both from the concerning the overruling of the demurrer to wrongdoer and from the employer. He must the several paragraphs of reply and the reelect from which one he will collect. If he fusal to give instructions. collects compensation, he cannot collect dam Finding no reversible error, the judgment

is affirmed. ages.

[3] It is clear that neither appellee nor his employer understood or intended that the receipt by appellee of the $20:76 should bar 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

March 18, 1925.) pellee accepted the check, which was before the agreement was approved by the Indus- 1. Master and servant Om 417(7)-Finding of trial Board. Appellee testified that the Industrial Board, on evidence final. check was given to him as a gift. We do Finding of Industrial Board that employé not overlook the fact that at the time appel- was not injured because of willful misconduct, lee received the check he and his employer within Workmen's Compensation Act, $ 8, will entered into an “agreement in regard to the not be disturbed, where based on evidence. compensation for the injury sustained” by 2. Master and servant en 375(1)-Injury held appellee, and that there was attached to said in course of employment, though act was in check what was designated as a "compensa

violation of order. tion receipt,” which recited that appellee Although act which caused injury was done had received of his employer the sum of $20.- in violation of order or direction of employer, 76 in "settlement and satisfaction of all injury held to arise out of course of employ

ment. claims for compensation or damages on account of injuries suffered" by appellee Appeal from Industrial Board. August 11, 1920, while in the service of the

Proceeding under the Workmen's Compenlumber company. While this is a plain and

sation Act by Calvin E. Slusser, claimant, opunequivocal acknowledgment of a payment of compensation, and in the absence of ers' Mutual Electric Light & Power Associa

posed by Frank E. Fox, receiver of the Farmfraud or mistake should be final and conclu

tion, employer. From an order of the Insive, the receipt is not contractual in the

dustrial Board granting an award, employer sense that the statement that the money was

appeals. Affirmed. received for compensation cannot be contradicted by proof that the same was received Lloyd T. Bailey and Geo. O. Compton, as a gift. The jury found that the money both of Columbia City, for appellant. was paid to appellee as a gift, with the Whiteleather & Bloom, of Columbia City, agreement and understanding that it should for appellee. 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 wbile 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 tupic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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sociation, for which injury the Industrial, 5. Insurance Om 17912—Loan contract on in. Board awarded compensation.

surance policy providing that insured might [1] The receiver contends that the employé

have interest added annually to principal con.

strued. is not entitled to compensation because of willful misconduct, within section 8 of the

Loan contract on life insurance policy, made Compensation Act (Acts 1919, p. 158). The at time of issuing policy to obtain money with Industrial Board found against the conten- insured might have interest added annually to

which to pay initial premium, providing that tion and the evidence tends fairly to sustain principal, held to mean, when construed in light the finding. Therefore this court cannot dis- of policy, that insured might have interest an. turb the award. Artman's Manual, p. 93 et nually added to principal for such time as inseq.

debtedness created thereby did not exceed re[2] The only other contention is that the serve value of policy. workman's injury did not arise out of the

Appeal from Circuit Court, Delaware Coun. employment because the act which caused

ty; Clarence W. Dearth, Judge. his injury was done by him in violation of the order or direction of his employers. The

Action by Clara M. Brammer against the contention cannot be sustained. Artman's

Reserve Loan Life Insurance Company Manual, p. 60.

wherein Clara M. Brammer, as administraThe award is affirmed.

trix 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.)

Muncie, for appellant. (Appellate Court of Indiana. March 20, 1925.)

White & Haymond, of Muncie, for appellee. 1. Insurance en 179/2-Policy held to termi. PER CURIAM. Action by appellee, Clara

nate on insured's refusal to pay interest or M. Brammer, against appellant to recover on loan when loan with accumulated interest ex

a policy of life insurance issued by appelceeded policy's reserve value.

lant on the life of Wm. E. Brammer, husband Life insurance policy written under Acts of appellee. Appellee, as administratrix of 1909, c. 95, § 5 et seq. (Burns' Ann. St. 1914, 8 the estate of her husband, was made a party 4622a et seq.), providing that insured's failure to pay any loan or interest thereon should not defendant. There was a trial by the court avoid policy, unless total indebtedness to in which resulted in a finding and judgment in surer should equal or exceed legal reserve, ter- favor of appellee. The error assigned in this minated on insured's refusal to pay interest or court is the action of the court in overruling loan on policy when loan, together with accumu- appellant's motion for a new trial, which prelated interest, exceeded reserve value of policy sents the question of whether or not the as determined by table of values attached there- policy terminated upon the failure of the to.

policy holder to pay interest on a policy loan 2. Insurance Cu 1791/2 — Statute relating to from and after the time the indebtedness on loans on insurance policy construed.

account of such loan equaled the policy values Acts 1909, c. 95, § 5, subd. 9 (Burns' Ann. as set out in the table of guaranteed values St. 1914, § 4622a), providing for stipulation that attached to the policy. The only evidence at failure to repay any loan or interest shall not the trial consisted of a stipulation of facts, avoid policy, unless indebtedness to insurer shall which, so far as here involved, was as folequal or exceed such loan value at time of fail

lows: ure to repay, means that, if indebtedness equals or exceeds legal reserve from policy, failure to

[1, 2] On November 1, 1917, appellant issued pay any loan or interest thereon does avoid its policy for $5,000 to William E. Brammer, policy.

who was the husband of appellee, the bene3. Insurance Om 151(1)-Statute providing that far as here involved, provided that it was is

ficiary named therein, which said policy, so policy and application shall constitute entire sued in consideration of the payment in adcontract between parties construed. Acts 1909, c. 95, § 5, subd. 3 (Burns' Ann.

vance of a premium of $2,476.25 to be conSt. 1914, § 4622a), providing that policy and ap

tinued upon the further payment of a replication shall constitute entire contract be- newal premium of $145.05 on the 1st day of tween parties, means policy contract alone, November of each year thereafter until two without necessarily contemplating that at same such annual premiums had been paid, or time a loan would be made to insured.

until the prior death of insured. 4. Insurance en 1791/2-Loan contract not con

Under "Privileges and Conditions," the strued to abrogate any provision of policy. policy was indorsed: "A loan of $2,275 made

Loan contract made at same time that life on this policy under date of November 1, insurance policy was issued would not be con- 1917.” This was the full amount of the loan strued to abrogate any provisions of policy, but | value as shown by the table of values in the in harmony therewith.

policy. After the table of values, the policy For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(146 N.E.) further provided that any indebtedness might , on said loan evidenced by said loan agreement. be paid in cash, or, if not so paid, the cash The company prior to November 1, 1921, and loan values would be reduced by the notified the said Brammer in writing that it amount of the indebtedness; that the paid-up would not be possible for it to add the ininsurance would be reduced in the ratio of terest accruing November 1, 1921, to the printhe indebtedness to the net value of such cipal of the loan, as to do so would cause the paid-up insurance; that the extended insur- indebtedness to exceed the policy reserve, ance should be for as long a term as the and that it would therefore be necessary for balance, left after deducting the indebtedness him to remit to the defendant company on or from the net value of the extended insur- before the said 1st day of November, 1921, ance, would purchase as a net single premi- the sum of $164.34, being the interest from um; and that failure to pay any loan or in- November 1, 1920, to November 1, 1921, in terest thereon should not avoid the policy order to continue said policy in force. unless the total indebtedness to the company

On November 2, 1921, the company duly should equal or exceed the legal reserve. notified Brammer that said policy had been

At the time of issuing said policy, and for canceled, and in said notice offered to reinthe purpose of enabling the said Brammer state said policy upon payment of the into meet the single premium of $2,476.25, re- terest accruing November 1, 1921, of $164.34, quired by said policy to be paid in advance, provided said Brammer was then insurable. and at the instance and request of the said Brammer protested to said company against Brammer, the company agreed to loan him the cancellation of said policy, and did not the sum of $2,275 provided he paid the bal- at any time pay the said sum of $164.34 for ance in cash, which he did. The said sum of interest as demanded by the company, nor $2,476.25 provided in said policy was paid by was the said loan or the previous installhim in the manner aforesaid. The reserve ments of interest thereon ever paid to the on said policy at the end of the first policy said insurance company by said Brammer or year was $2,275 which amount also equaled by any one on his behalf, nor did he after its cash or loan value at said time.

the 1st day of November, 1921, ever request To evidence the agreement as to said loan a reinstatement of said policy, and at no time of $2,275, Brammer executed a loan agree after the said 1st day of November, 1921, ment to the company of the same date as the was said policy reinstated on the books of policy in which it was provided that he hor- the company, but at all times after November rowed of the said company on the said policy | 1, 1921, was carried on the books of the com(which was assigned to said company) the pany as lapsed and canceled. sum of $2,275 which loan and indebtedness The policy here involved was written unwas to draw interest at the rate of 6 per der the act of the Legislature approved cent. per annum, beginning one year from March 5, 1909. Acts 1909, p. 251, 8 5 et seq. the date thereof, but the insured might elect (Burns' R. S. 1914, $ 4622a et seq.). Subdivito have interest added annually to the prin- sion 7 of section 5 of such act requires a cipal of the loan. The agreement further table showing the loan values of the policy, provided that the loan should be automatical- and also the cash, paid up, and extended inly extended from year to year, so long as

surance options upon the surrender, or availthe premiums on said policy were duly paid, able under the policy each year upon default until final settlement is made on said policy. in premium payment, and providing that

The single premium of $2,476.25, required such values shall be equal to the full reserve by the terms of the policy to be paid in ad- of the policy. The policy here involved convance, to the extent of $2,275 was not other-tained such a table showing the loan value, wise paid than by the said loan agreement which pursuant to the statute was equal to so made. The two annual premiums of $145.- the full reserve. It has been heretofore not05 each due respectively on the 1st days of ed that the loan made by appellant to BramNovember, 1918 and 1919, were paid by the mer was the full amount of the policy loan said Brammer to the company in cash.

value. At the time of the execution of said policy

Under subdivision 9 of section 5, the comand loan agreement, the said Brammer elect- pany was required to make such a loan upon ed to have the annual installments of interest demand therefor by the insured, and upon a on said loan added to the principal of said proper assignment of the policy to secure the loan as authorized by said loan agreement, same.

This section of the act also provides and no interest was paid by said Brammer

that: on said loan, and said annual installments of "It shall be further stipulated in the policy interest were annually added to the principal that failure to repay any such loan or pay inof said loan by said insurance company, and terest thereon shall not avoid the policy unless on November 1, 1921, the indebtedness in- such indebtedness to the company shall equal cluding interest amounted to at least $2,719.- or erceed such loan value at the time of such


(Our italics.) 56, which exceeded the legal reserve which was $2,710.

The necessary meaning and inference from Said Brammer and no person for him ever this last provision of the statute is that, if the paid any portion of the principal or interest indebtedness to the company equals or ex

ceeds the legal reserve from the policy, then qed to the principal of the loan until the date and in that event a failure to pay any loan or of the death of the insured, and that the interest thereon does avoid the policy, and amount should be deducted from the $5,000 that is the situation with which appellee is then due on the policy, but such contention confronted in this case, for it appears by the cannot prevail. The options of the policy stipulation of the parties that the reserve as to paid-up insurance or extended insurvalue of the policy on November 1, 1921, was ance for $5,000 were available to the insured $2,710, while the indebtedness at that time only in the event that the loan had not been including the interest was $2,719.56 by the made to him or, having been made, that the method of computing the same most favor same had been paid in cash. Having acceptable to appellee.

ed the loan, these options were modified by It clearly appears then that the insured the terms of the policy itself. It is expresshad received at a fixed date before his death, ly provided in the policy that, if the loan is in the form of a loan, an amount which, to- not paid in cash, then the cash and loan valgether with the accumulated interest thereon, ues will be reduced in the ratio of the inwas in excess of the full reserve value of the debtedness to the net value of such paid-up policy. It cannot consistently be contended insurance, and the extended insurance shall that in addition thereto he should have the be for so long a period as the balance, left benefit of the provision of the policy as to after deducting the indebtedness from the cash settlement, paid-up insurance, or ex- net value of the extended insurance as shown tended insurance. There was no cash due in the table, will purchase as a net single him; on the contrary, he was on that date premium. But the insured, having negotiat. indebted to the company. There was nothing ed a loan for the full reserve value of the with which to purchase paid-up insurance or policy, the same, together with the accumuextended insurance. Having accepted the lated interest, reduces the cash and loan val. full reserve value of the policy in the form ue, which is the same as the reserve value, of a loan and accumulated interest, he cer until the same becomes a minus quantity, tainly was not in a position to demand more. and, under the construction that we have gir.

Appellee argues that the provision of the en the statutory provisions and the proviloan agreement that the insured might have sion in the policy in the event the indebtedthe interest annually added to the prin- ness should exceed the reserve of the policy, cipal of the loan was a modification of the the same is voided. The fact that the prepolicy provision as to the indebtedness which mium payments had been completed did not the parties had a right to make. But the annul the provisions of the policy relating to loan agreement was not made subsequent to loans, extended insurance, and paid-up inthe time of issuing the policy, but at the surance. Appellant will hardly contend that same time and for the purpose of obtaining at any time after such completion the inmoney with which to pay the initial premium. sured might have not negotiated even a larg

[3-5] It is true that the statute provides er loan than the one here involved, and, had that the policy and the application shall con- such loan been for the full amount of the restitute the entire contract between the par- serve value, or had the indebtedness in time ties. This, however, speaks with reference by the accumulation of interest equaled the to the policy contract alone, and without reserve value the insured could not then necessarily contemplating that at the same claim further benefits under the policy. Autime a loan would be made to the insured. thorities that hold that, where there is an But whether or not the loan contract, being indebtedness growing out of á policy with executed at the same time as the policy was provisions similar to the provisions in the executed, and that therefore the two instru- policy here involved, the same should be dements are to be construed together as one ducted from the cash surrender value of the contract, the loan contract made at the same policy, and that in the event the indebtedness time the policy was issued must not be so equals or exceeds the reserve value of the construed as to abrogate any of the provi- policy the company will not be required to sions thereof, but must be construed in har- continue the same, are numerous. The polmony therewith. The provisions of the loan icy involved in the case of Cotnam v. Massacontract 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

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