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The Court of Appeal assigned the following reasons for its judgment:

"There is no dispute about the material facts of this case. The policy sued on was issued on July 3, 1901, to Pierre J. Pavy, aged 28 years, for $2,000, payable to the plaintiff, his mother. At the time of the issuance of the policy to the insured he paid the stipulated annual premium of $61.38, paying in cash $46.04, and by premium loan $15.34, for which last amount he executed and delivered the following certificate: "Certificate of Premium Loan.

of default in premium payment at the rate | ed the judgment appealed from. The correctof 6 per cent. per annum, and at the time of ness of that judgment is now in this court said default said loans, with accrued inter- on review. est, amounted to the sum of $70.56, as was shown by said exhibit. Further answering, defendant alleged that a default in the payment of premiums under said policy occurred on the 3d day of July, A. D. 1905, the premium due on that date not being paid, and no premiums having been paid since on said policy, and therefore by the terms of said policy the same lapsed and became null and void, subject, however, to the provision of said policy for extended insurance from the time of such lapse at the option of the insured; but defendant averred: That it was provided in said policy that, should there be any indebtedness on account of said policy at the time of default of the payment of any premiums, the values of the several options of settlement stated in the table of surrender and loan values would be correspondingly reduced, and that the extension or continuation of insurance after default of payment of premiums on said policy averred by the petitioner was one of the options of settle ment under the "Table of Surrender and Loan Values" contained in said policy, and that the value thereof at the time of default was $92.38. That the value and amount of said loans or indebtedness of the insured at the time of such default was $70.56, and there was therefore available to the insured for the purchase of extended insurance at the time of such default the sum of $21.82, and the value of said $21.82 was given by the company in accordance with the terms of said policy in extended insurance, and the term so purchased was 1 year and 112 days as above stated.

That by reason of the foregoing facts said policy had entirely lapsed and become void long prior to the death of the insured, and petitioner is not entitled to recover thereon. In view of the premises, defendant prayed that the demand of plaintiff be rejected and dismissed, at her cost.

" $15.34. Springfield, Ill., July 3, 1901.
""This certifies that the Franklin Life Insur-
ance Company, of Springfield, Illinois, has loan-
ed on the sole security of policy No. 35,053 the
sum of fifteen and 84/100 dollars, being a part
of the annual premium on said policy, which
with any additional premium loans, the amount
to be indorsed hereon and stated also in the re-
til paid, simple interest at the rate of 6% per
newal receipt, shall be a lien on said policy un-
annum to be added thereto until the end of the
accumulation period named in said policy, at
which time the profits accruing to it shall be
used towards the payment of said loan and any
excess of profits paid cash or used as otherwise
set forth in the policy at the option of the in-
sured. If at that time any part of such loan
tinued as a loan, interest as aforesaid, and the
shall remain unpaid. The balance may be con-
dividends accruing on the policy to be thereafter
payable annually, it being understood that, in
the event of my death before the expiration of
said accumulation period and while said policy
is in force, said loan to be null and void.
[Signed] P. J. Pavy, The Insured.'

"Thereafter during the continuance of the policy the insured paid, on the 3d day of July of each of the years 1902, 1903, and 1904, $46.04, of the annual premium in cash and the difference by a premium loan each year of $15.34, and the defendant indorsed each of said amounts ($15.34) on the back of the certificate hereinbefore set out. Upon said payments being made hibiting that the payment of the annual prethe defendant issued receipts to the insured, exmium on his policy was made as above set forth: Cash. $46.04; premium loan, $15.34; total, $61.38.

"It is admitted the insured, P. J. Pavy, died November 24, 1907, and the proof is that the plaintiff, the beneficiary under the policy, is his mother. The four annual premiums paid car

Statement of Premium Loans, Policy No. 35,053, ried the policy in full force and vigor up to

Pierre J. Pavy.

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July 3, 1905, inclusive. There is no dispute
about these facts. They are conceded by both
sides. The controversy is over the construction
of the terms of the contract. The plaintiff con-
tends that under the terms of the policy it be-
came nonforfeitable after the payment of the
annual premiums for three years, and, the an-
nual premiums for four years having been paid,
she maintains that by the terms of the contract
the life of the policy was extended for 5 years
and 320 days from July 3, 1905, and said policy
was consequently in full force and vigor at the
time of the death of the insured.
Her posi-
payment to the annual premiums as hereinbe-
tion is that the premium loans, applied in part
fore set forth, are advanced dividends, and in no
sence an indebtedness in the intendment of that
word as used in the policy, to be taken into ac-
count in determining the continued insurance
value of the policy from and after July 3, 1905,
after which date no annual payment was paid.

The Court of Appeal amended the judgment appealed from by striking therefrom "The defendant, on the other hand, maintains the credit of $70.56, and disallowed and re- been indebted to the defendant, the life of the that while true that, if the insured had not jected the same, and, as so amended, affirm-policy would have been extended as claimed by

curity of this policy the amount stated in the following table, less any existing indebtedness, upon execution of blanks therefor furnished by the company; interest to be at the rate of six per cent. per annum in advance.'

"Then follows the table of surrender and loan

plaintiff, yet the insured was in truth and in fact indebted to the defendant in the full sum of the premium loans, which, with interest, amounted to $70.56 on July 3, 1905, and under the terms of the contract this was such an indebtedness which entered into the equation to fix the extended insurance value of the policy; values, setting forth for each year, from the that by reason of said indebtedness and of the end of the third year to the end of the twentieth terms of the policy providing for the correspond-year seriatim, the loan value, the term of coning reduction in the value of the option of set- tinued insurance for $2,000, and the amount of tlement elected by insured the period of extended insurance was reduced to 1 year 8 paid-up policy for each year. The term of the months and 6 days, which period expired on the continued policy at the end at the fourth year 9th day of March, 1907, long prior to the death is set down in this table as 5 years and 320 of the insured, and the policy was consequently days. lapsed and of no effect when said death oc- ly interpreted by the parties, to wit: Should "Under this table appears this clause, variousthere be any indebtedness on account of this policy at the time of default in payment of any premium, the value of the several options of settlement in the foregoing table will be correof the contract over the interpretation of which spondingly reduced.' These are the provisions the controversy has arisen between the parties. last stipulation quoted, relating to the reduc"The defendant company contends that the tion of value of the several options of settlement, is applicable to the premium loans made under paragraph 'a,' under the title Loans,' transcribed above; that such premium loans evidence an indebtedness to the company; that it is a factor which must be taken into account in is an indebtedness on account of the policy, and

curred.

strument.

"The issue thus presented is one of the interpretation of the contract. There is no dispute between the parties about the fundamental rules of law governing on this question. It is conceded that, the contract having been prepared by the defendant, every doubtful point arising thereunder must be resolved in the sense more favorable to the insured; that it is the common intent of the parties-that is, the common intention of all-that is to be sought; that, when there is anything doubtful in agreements, we must endeavor to ascertain what was the common intention of the parties, rather than to adhere to the literal sense of the terms; that the intent must be gathered from the whole in"Guided by these cardinal principles, and bear-determining the continued insurance value of ing in mind the other rules of interpretation, the policy. we take up the consideration of the stipulations of the contract which have given rise to such divergence of opinion between the parties to this suit. The policy under review is known as an 'Advance Dividend Limited Payment' policy. It bears upon its face evidence of the fact that the annual premium is to be paid, at the option of the insured. part cash and part by premium loan. It provides for surrender and loan values and for nonforfeiture. It stipulates that, in case of default in the payment of any premium after three years' premiums have been paid in full, the company (subject to any existing indebtedness) will (a) without action of the insured continue, without participation, the full amount of insurance thereunder during the term specified in the following table: Provided that, if the death of the insured shall occur within one year from the date of such default, and during the continued term, the unpaid premium for said year shall be deducted from the amount due: or (b) [then follows provision for paid-up policy, not an issue here].'

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""(a) Upon application of the insured, the company will loan, on the sole security of this policy, twenty-five per cent. of any or all premiums hereunder as they become due; such loans to be made in accordance with the rules of the company, and to bear simple interest at six per cent. per annum, it being understood that, if the death of the insured shall occur before the expiration of the accumulation period named in this policy, all premium loans made hereunder, and accrued interest thereon, shall be canceled and become null and void. It is also agreed that if the insured does not avail himself of any or all of the premium loans provided for in this paragraph, and his death shall occur during the accumulation period named herein, and while the policy is in full force, an amount equal to twenty-five per cent. of all premiums paid on which no loans have been made, plus simple interest at six per cent. per annum shall be added to and become payable with the original amount of this policy.'

"(c) After this policy shall have been in force three years (premiums having been duly paid to the next succeeding anniversary of in

"The plaintiff contends, on the other hand, that the stipulation under review refers excluof the policy under paragraph 'c' of said title sively to any indebtedness contracted on account 'Loans, or for ordinary insurance business, other than the premium loans provided for in paragraph 'a.' She contends that the premium loans are purely advanced dividends, and in no sense an indebtedness in the intendment of the word as used in the clause the subject of construc

tion.

"It appears manifest to this court that the question is not whether premium loans, because denominated 'loans,' are an indebtedness in any sense by the insured to the company, but whether they are such an indebtedness which, in the common intention of the parties to the contract, was to be considered in fixing the value of the continued insurance.

"Addressing ourselves to this phase of the question, it appears evident upon a close analysis of paragraph ‘a,' relating to premium loans, that they were intended by the parties to be advanced dividends in lieu of and against the accumulated profits which would be due to the insured during the course of the accumulative period. This is made clear by the provision that if the insured does not avail himself of any or all of the premium loans provided for in this paragraph, and his death shall occur during the accumulation period named herein, and while the policy is in full force, an amount equal to twenty-five per cent. of all premiums paid on which no loans have been made, plus simple interest at six per cent. per annum, shall be added to and become payable with the original amount of this policy.

"It is not provided that these premium loans should ever be paid by the insured to the company; but, on the contrary, it is specially provided that they should remain in statu quo until the death of the insured during the accumulation period of the policy, when they all, with accrued interest, shall be canceled and become null and void. The reason of this stipulation is apparent. They were intended as advanced dividends, which would have been due under the last clause of paragraph 'a,' just quoted, supra. Had the insured not availed himself of these dividends under the option in the first stipulation of the paragraph, the company would have

himself of the option and received them during his lifetime, they become null and void at his death, and the company owes nothing to the beneficiary on account of the stipulated dividends which had already been advanced to the insured.

"The defendant tries to meet this view of the case by the argument that the provision of paragraph 'a' that the premium loans shall become null and void at the death of the insured is based on the condition that the annual premiums be paid and the policy kept alive; that the moment the insured defaults in the payment of any annual premium the premium loans must be viewed and treated as an indebtedness by the insured to the company, and the value of the continued insurance must be correspondingly reduced under the reduction stipulation quoted

supra.

would have extinguished them. The defendant could not have so applied them, and still claim to hold them in force until the death of the insured, as stipulated both in paragraph 'a' of the loan clause of the policy and the 'Certificate of Premium Loan' furnished to the insured.

"We think it is perfectly clear that the premium loans were intended by the parties as advanced dividends, and are treated as such by them, and are not such an indebtedness as is provided for by the reduction clause of the contract to be taken into account in fixing the values of the various options of settlement provided for in the contract.

"The trial judge allowed the defendant credit for the sum of $70.56, the principal and interest of the premium loans. We think there was error in this. Viewed as advanced dividends, the premium loans were canceled and became null "A sufficient answer to this view of the case is and void at the death of the insured, as per stipthat it is not 'nominated in the bond.' The pro-ulation in the contract. visions of paragraph 'a,' under discussion, neg- "We have carefully read the able and exhaustative the idea. True, the contract must be con-ive brief of defendant and appellant, but found strued in its entirety, and we cannot lose sight it of assistance only in the solution of the only of the reduction clause, at the foot of the table question before us-the correct interpretation of of surrender and loan values in construing the clauses of the contract as to which the parparagraph 'a' of 'Loans'; but we must bear in ties differed. The brief of appellee also proved mind that the said reduction clause is general in of assistance on this point. its provisions, and paragraph 'a' treats of a special subject and must control in its special provisions, unless they otherwise clearly fall under the scope and grasp of the general provision. This we do not find to be the case.

"An appeal was made to the 'Certificate of Premium Loan' issued by the insured, transcribed in full supra, as affording evidence of a construction placed upon premium loans by the parties that such loans constituted an indebtedness to be taken into account in determining the value of continued insurance.

"We fail to appreciate the force of this contention. On the contrary, we think the concluding clause of that receipt is destructive of the defendant's position. It provides: 'It being understood that in the event of my [insured's] death before the expiration of said accumulation period and while said policy is in force said foan is to be null and void.''

"For these reasons the judgment appealed from is hereby amended, by striking therefrom the credit of $70.56, which amount is hereby disallowed and rejected, and, as thus amended, the judgment is hereby affirmed, at the appellant's costs."

Opinion.

The policy to which plaintiff refers in her petition was one issued by the defendant company, whereby it promised to pay $2,000 upon receipt of satisfactory proof of the death of Pierre J. Pavy, provided the policy was then in force, to Laperle Pavy, mother of the insured; otherwise, to the insured's The insurance was executors or assigns.

granted in consideration of the application for the same, which was made a part of the contract, and of the payment of $61.38, re

"Extended insurance surely keeps the policy in force, whether the extension is for the full period stipulated in the table of values or for the reduced period under the stipulation for receipt of which was acknowledged, said payduction invoked by the defendant.

"If the premium loans were intended to be paid and retired on default made on the payment of annual premiums and utilized as an indebtedness to reduce the value of extended insurance, there would have been no need of the provision made in the concluding clause of the certificate of premium loan quoted.

"By making the application of the premium loans contended for by the defendant, they would have become extinguished, and the provision that they should become null and void at the death of the insured while the policy is in force was unnecessary. They would be already null and of no effect, because extinguished under this hypothesis, and the provision for their subsequent annulment would be mere brutum ful

men.

ment being the premium for one year's insurance, and the further payment of a like amount on or before the 3d day of July in every year thereafter until the premium for 20 years had been duly paid, or until the prior death of the insured.

The loan and surrender values, option priv. ileges, and conditions stated in the second, third, and fourth pages of the policy were declared to form a part of the contract as fully as if recited at length over the signatures affixed to the policy. Or the second page of the policy is found the heading:

"Surrender and Loan Values."

We make from what appears thereunder the following extracts:

"Nonforfeiture.

"Now this receipt, though signed by the insured, was evidently prepared and furnished by the defendant. It bears internal evidence of this fact. By paragraph 'a,' above referred to, the premium loans were to be made in 'accordance with the rules of the company,' and the company no doubt furnished the form for "In case of default in the payment of any the receipt. It cannot now be heard to say that premium after three years' premiums have been the receipt does not mean what is therein re-paid in full the company (subject to any existcited. ing indebtedness) will

"If the premium loans remained in force unti the death of the insured, and became null and void on the happening of that event, then the principal thereon, with interest, was not to be applied to the reduction of the value of the

(a) Without action of the insured continue without participation the full amount insurance hereunder during the term specified in the following table, but if the death of the insured shall occur within one year from the date of

the unpaid premium for such year shall be deducted from the amount due; or

"(b) Upon the surrender of the policy within sixty days after the date of such default issue a nonparticipatory paid-up life policy as specified in said table.

"Loans.

"(a) Upon application of the insured the company will loan on the sole security of this policy twenty-five per cent. of any or all of the premiums hereunder as they become due, such loan or loans to be made in accordance with the rules of the company and to bear simple interest at six per cent. per annum, it being understood that, if the death of the insured shall occur before the expiration of the accumulation period named in this policy, all premium loans made hereunder and accrued interest thereon shall be canceled and become null and void. It is also agreed that if the insured does not avail himself of any or all of the premium loans provided for in this paragraph, and his death shall occur during the accumulation period named herein, and while this policy is in full force, an amount equal to twenty-five per cent. of all premiums paid, on which no loans have been made, plus simple interest at six per cent. per annum, shall be added to and become payable with the original amount of this policy.

"(b) After this policy shall have been in force three years (premiums having been duly paid to the next succeeding anniversary of the insurance) the company will loan on the sole security of this policy the amount stated in the following table (less any existing indebtedness) upon execution of blanks therefor furnished by the company, interest to be at the rate of six per cent. per annum in advance:

If the contract was

with no liability on its part; the former, that the death of the assured before the expiration of the term of insurance leaves the company owing her the full amount of the insurance. The plaintiff has introduced evidence to show that the contract declared on, evidenced by the policy, gives undue and unfair advantages to the insurance company and should not be countenanced. unfair and illegal, the remedy was to terminate it and recover the premiums paid-not to continue it in force and at the end change its terms, and so as to make it bring about what is averred would be proper and equitable results. This we cannot do without making a new contract for the parties, which we are not authorized to do.

to construing it according to law. We are As matters stand, our province is confined of the opinion that the Court of Appeal erred in its conclusions in that respect. When Pierre J. Pavy defaulted in paying his fifth installment of premium, the automatic extended continuance of insurance which resulted therefrom was not 5 years and 320 days, as contended by the plaintiff. That extension of insurance was for the benefit of holders of policies who had in point of fact made full payment of $61 per year prior to We cannot making default in payments. make that term of continued insurance apply

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"Should there be any indebtedness on account, to cases where the policy holder had in fact of this policy at the time of default of payment paid only $46 of premium per year and mereof any premium, the value of the several options of settlement stated in the foregoing table ly promised to pay the balance of the prewill be correspondingly reduced. miums at later dates, without ignoring the words:

"Distribution of Profits.

"The accumulation of this policy ends on the 3d day of July, 1921, when its share of profits will be apportioned, provided the insured is then living and all premiums have been paid in full to that date, and this policy may then be continued by the insured or assigns (subject to any existing indebtedness) under one of the following:

"Should there be any indebtedness on account of this policy at the time of default of payment of any premium, the value of the several options of settlement stated in the foregoing table will be correspondingly reduced."

We do not think the parties to the policy contemplated any other indebtedness thar that touching payment of premiums. The The plaintiff in this suit, as the beneficiary parties to the contract had the right to look thereof, sues in affirmance of the policy. forward to the probability of a default in The defendant likewise urges the enforcement making payments of premiums of insurance, of the same according to its terms. The lat- and to fix and declare what the result of such

did so. a diminished term for the existence of the policy, and that it should be changed from a participating to a nonparticipating policy

It was agreed that there should be

No. 17,651.

(125 La. 278)

SECKINGER v. CHENEVILLE.

thereafter. There was intended to be a dif- (Supreme Court of Louisiana. Jan. 17, 1910.)

ference between the rights of those who had placed actually in the hands of the company the full amounts of the premiums the company demanded, and those who had only placed into the hands of the company threefourths of the premiums for a policy of $2,000 leaving one-fourth of the sum actually unpaid and represented in fact by premiums to be paid.

There was in reality no payment of premiums by Pavy beyond three-fourths thereof, and in reality no loan made to him by the company. Those terms had a scope entirely different from those ordinarily attached to them, and were to be used to meet specific conditions. There was a real indebtedness by Pavy for the unpaid portion of the premiums, which remained unpaid up to the time of default. The payments and the loans acknowledged were only constructive payments and constructive loans, if we may use that expression, to be used so long as original or normal conditions existed, but should a default occur then matters were to be made

to take their actual shape, and the rights of parties were to be fixed on the basis of the actual facts of the case. Policy holders, who at the time of default had not in fact paid in full in money the annual premiums, agreed that there should be an adjustment based upon actual payments which had been made in money, and the future rights and obligations fixed and determined from that standpoint. The testimony in the record going to explain the theory and plan upon which this particular character of policy was adopted by the defendant company conveys to the court knowledge and information which would be pertinent to the determination of an action of rescission or an action to recover payments of premiums as having been made in error or fraud, and as payments of money not due under article 2301 Civ. Code; but it cannot assist us in the conclusions to be reached by us under the present pleadings and issues.

This court having accepted as correct the construction of the policy upon which the actuaries acted in making their calculation of values and the period of extension of the policy, we see no reason for questioning the correctness of the calculations themselves.

For the reasons assigned, the judgment of the Court of Appeal brought before us for review is hereby annulled, avoided, and reversed, and it is now ordered, adjudged, and decreed that there be judgment in favor of the defendant and against the plaintiff, and that this suit be dismissed, at her costs in both courts.

HUSBAND AND WIFE ($ 182*)-MORTGAGES (§ 536*)-SALE BY WIFE OF PARAPHERNAL PROPERTY-MORTGAGE BY WIFE-VALIDITY.

Where a married woman, with the authority of her husband makes a sale of her paraphernal property, and repurchases it, on the same day, and by an act before the same notary, the transactions, upon the face of the papers, are legal, and must be accepted, for what they purport to be, until shown to have been otherwise intended. The mortgage and note given in repurchasing the property constitute a sufficient basis for an order of seizure and sale, and the sale thereunder, in the absence of objection from the defendant in the writ, conveys a good title to an innocent adjudicatee, which, after the continued silence of the former owner for a number of years (notwithstanding that she was notified of the intended sale, was present in the parish when it was made, and has continued to live there), a person who has agreed to buy the property may be compelled to accept.

[Ed. Note.-For other cases, see Husband and Wife, Dec. Dig. § 182;* Mortgages, Dec. Dig. § 536.*]

(Syllabus by the Court.)

Appeal from Civil District Court, Parish of Orleans; Geo. H. Théard, Judge.

Action by Walter E. Seckinger against E.

J. Cheneville. Judgment for defendant, and plaintiff appeals. Reversed, and judgment rendered in favor of plaintiff.

McCloskey & Benedict, for appellant. Titche & Rogers, for appellee.

Statement of the Case.

MONROE, J. Plaintiff seeks to compel de fendant to accept title to certain real estate, in accordance with a written agreement between them. The defense is that the title tendered is bad, or, if not bad, suggestive of litigation. This defense is founded on the following facts, to wit: The property was acquired on May 6, 1897, by Mrs. Theresa Blaise, wife of George Digby, by an act which recites that the purchase is made with her paraphernal funds. On January 14, 1898, Mrs. Digby, duly authorized by her husband, executed an act purporting to be a sale of the property, to Patrick H. Golden for $1,800 cash, and on the same day and before the same notary another act, purporting to be a sale, was executed, whereby Golden reconveyed the property to Mrs. Digby for $1,900, of which $700 is said to have been paid in cash, and for the balance of $1,200 Mrs. Digby gave her note, secured by mortgage. In June, 1901, Robert Legier, agent, as the holder of the note so given, caused executory process to issue thereon, under which the property was adjudicated to plaintiff herein for $1,310 cash; the usual notices having been served on the defendant in the writ. In December, 1901, Legier, agent, brought suit

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