Under New York Life Insurance Company v. Blaylock, 144 Miss. 541,110 So. 432, approved in New York Life Insurance Company v. Boling, 177 Miss. 172, 169 So. 882, 111 A.L.R. 967, the company had no right to deduct the surrender charge in this case, for the simple reason that there was no surrender, or offer of surrender, of the policy, and there is no provision therein automatically surrendering it under the facts of this case. This action is on the policy as extended insurance.
This language of the court in the Blaylock case is applicable to the case at bar:
"The main question presented on the appeal, which will be decisive of the case, is whether or not the `surrender charge' of $15 may be deducted by the company from the reserve or cash amount due the insured on the policy at the time of the lapse, or should it be applied in extending the insurance under clause (b) of the provisions, `Options on Surrender or Lapse,' of the policy, where there has been no actual surrender of the policy, but the insurance is continued under said clause (b) to some future date as provided.
"In the case before us the policy became void several months before the death of the insured if the $15 as a `surrender charge' could be deducted from the amount due on the policy and not applied to extended insurance; but if the `surrender charge' of $15 in this case could not be retained by the company, then the insurance for the face amount of the policy was extended to a date after the death of the insured; so the question then is whether the $15 claimed by the company as a `surrender charge' should be applied to extended insurance under the terms of the policy, or whether the company should be allowed to retain that amount, in which event the policy would have become void before the death of the insured.
"We have been unable to find any decision of the question, counsel cite none, and we are therefore left to construe *Page 16 the provisions of the policy from the language used; and after a careful consideration of the proposition we are convinced that the $15 `surrender charge' cannot be collected by the insurance company, because, as we see it, there was no actual surrender of the policy, but the default in the payment of the premium amounted to a mere lapse of the policy, and under the said clause (b) the insurance was automatically extended, or `the insurance was continued as provided in option (b),' as expressed by the provisions of the policy mentioned, the insured having failed to elect to come under clause (a) or clause (c); therefore no `surrender charge' could be collected from the amount due the insured on the policy at the time of the lapse, because there was no surrender of the policy.
"We do not understand the provisions of the policy to mean that the $15 `surrender charge' could be retained by the company where the policy merely lapsed, and clause (b) extending the insurance automatically applied. It seems clear to us that this `surrender charge' can be collected by the company only where the policy is surrendered for cash, as provided in clause (a) or where the insured elects, clause (c), which latter question we do not decide, but the surrender charge cannot be retained where the insurance is continued under clause (b) as it was in the case before us.
"If the provisions in the policy under the designation `Options on Surrender or Lapse' can be reasonably construed to mean that when there is a lapse and the insurance is continued under clause (b) that this constitutes a surrender of the policy, or that the intention of the provision is that the lapse and continuance of the insurance shall warrant the charge of the $15 as a surrender or lapse charge, still the other construction that we have above placed upon the provision, namely, that the `surrender charge' is not to be deducted by the company unless the policy is actually surrendered and not continued *Page 17 under clause (b) as it is in the case before us, is also a reasonable construction of the provision; and when there are two reasonable constructions of the contract of insurance, one favorable to the insurance company and the other to the insured, it is the duty of the courts to adopt the one favorable to the insured, because the contract is to be construed most strongly against the writer of it. This is the universal rule, as we find it in all jurisdictions. Therefore we think, in the instant case, that the surrender charge cannot be claimed by the insurance company because there was no surrender of the policy; but if mistaken in that view, then it is our opinion that even if the construction contended for by the appellant is a reasonable one, still it is the duty of the court to adopt the other reasonable one favorable to the validity of the policy."
In the Nelson case [184 Miss. 632, 184 So. 638], cited in the majority opinion, the court drew a distinction between "The cash surrender value," the wording of the policy in the Blaylock case, and "the cash value," the wording in the Nelson case. In the case at bar, the wording is "Cash Surrender Value," as in the Blaylock case.
No Tennessee case has been called to our attention announcing a contrary rule, but, on the other hand, Sugg v. Equitable Life Assurance Society, 116 Tenn. 658, 94 S.W. 936, seems to approve it.
Anderson, J., concurs in this dissent.