[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 92 On the stipulated facts there is no basis for holding that the insurance policy was in effect when Hyman D. Baker died. The right of the insured, after default in premium payment, to elect one of the options described in the policy, did not pass to his beneficiaries at his death. (Lange v. Metropolitan Life Ins.Co., 278 N.Y. 626.) Mere proof that the policy bore a date two months earlier than its actual date of issue, and that insured paid premiums for that two-month period, did not establish such discrimination as was prohibited by section 89 of the Insurance Law (Cons. Laws, ch. 28) as it stood in 1920. We do not decide what effect such discrimination, if established, would have on the rights of beneficiaries. As to interest on policy loans, defendant properly charged against the policy's surrender value, interest to the date of premium default, even though that date was prior to the date when annual interest became due when insured was not in default as to premiums. Proof of the payment of compound interest on these policy loans, whether or not justified by the terms of the policy, does not entitle the beneficiaries to a credit, since the insured knew that the interest was being compounded, and failed to object thereto. (Young v. Hill, 67 N.Y. 162, 167.) No post mortem dividend was due on this policy since the policy was not in effect when insured died.
The judgments should be reversed and judgment directed in favor of the defendant, dismissing the complaint, with costs in all courts.
LEHMAN, Ch. J., LOUGHRAN, FINCH, RIPPEY, LEWIS, CONWAY and DESMOND, JJ., concur.
Judgments reversed, etc. *Page 93