166 So. 522 | La. Ct. App. | 1936
Lead Opinion
This is a suit by George Devine, the beneficiary of a life insurance policy issued to Lottie Harris, deceased, by the National Life Accident Insurance Company of Nashville, Tenn., in which the full amount of the death benefit, $207, is claimed. The policy was issued October 3, 1927, and lapsed for nonpayment of premiums on December 19, 1932. Lottie Harris died August 5, 1935. It is admitted that at the time the policy lapsed it had a net cash or reserve value of $10.82, which plaintiff contends must, under the provisions of Act No.
The sole issue is whether Act No.
Act No.
Under the prior act the insurance company had no option, and the reserve had to be applied to the purchase of extended insurance at the full face value, whereas, under the subsequent act, the insurance company might apply the reserve to either paid-up or extended insurance. It will be observed that there is repeated in the amendatory act the language of the original act, which provided "that no policy * * * issued * * * on or after January first, Nineteen Hundred and seven, after being in force three full years shall by its terms lapse," etc. Counsel for plaintiff contends that the reference to January 1, 1907, as the effective date, was an inadvertence superinduced perhaps by reason of article
On the other hand, opposing counsel contends that this phraseology was purposely included in the amendatory act and evidences an intention to make the new act retroactive and argues that there is no valid objection upon constitutional grounds as impairing the obligation of a contract because the subject-matter is one involving the public policy of the state. On this point plaintiff counters with the statement that only public, social, or emergency legislation, or the exercise of the police power of a state, can properly affect the obligation of contracts lawfully entered into.
Is the act of 1932 intentionally retroactive? The rule is that a statute should have only prospective effect, unless its language compels a different conclusion.
"A law can prescribe only for the future; it can have no retrospective operation, nor can it impair the obligation of contracts." Article 8, Rev.Civ.Code. *524
"Acquired rights and existing compacts cannot be affected by subsequent legislation." State v. Bermudez,
"A law will not be given a retroactive operation, unless the intention that it should so operate is so clearly expressed that no other construction is possible. * * * State ex rel. Knollman v. King,
In our opinion the presence of the words in the amendatory act of 1932 relative to its effective date is very clearly an error. It was probably due to the fact that the former act of 1906, with exception of the portion to be amended, was copied in extenso by the framers of the new act. The act of 1906 provided that where the insured failed to make a choice as between extended insurance and a paidup policy, the accumulated reserve on a lapsed policy must be applied to the purchase of extended life insurance, and the sole purpose of the amendatory statute was to permit the insurer to apply the reserve to either the one or the other. To say that the act is purposely retroactive would result in a manifest absurdity. In the first place, if the Legislature had intended to affect policies issued prior to its passage, it could very easily have said so. Moreover, the statute is couched in the future tense. Act No.
In Corpus Juris, vol. 59, Verbo "Statutes," p. 992, we find the following: "While, as a general rule, every word in a statute is to be given force and effect, words inadvertently used, words to which no meaning at all can be attached, or words having no meaning in harmony with the legislative intent as collected from the entire act, will be treated as surplusage, and will be wholly disregarded in the construction of the act in order to effectuate the legislative intent; * * *."
Reading the two statutes together as laws in pari materiæ, it is clear that the only purpose of the later statute and its only intention was to change the provision in the earlier act concerning the application of accumulated reserves on lapsed policies in which no option had been exercised by the insured.
In Watson v. Metropolitan Ins. Co.,
"Nor are we in any way shaken in our view by a consideration of Act No.
"The later act, which, it is conceded, has no direct bearing here."
But, if the Watson Case may not be considered as authority for the proposition presently under discussion, it is certainly not authority to the contrary. Act No.
In Town v. Morgan's Syndics,
And we find the following in Central Glass Co. v. Niagara Fire Ins. Co.,
We conclude, therefore, that the act of 1932 can be given no retroactive effect.
The alleged unconstitutionality of the act of 1932 as being repugnant to the constitutional provision concerning the impairment of the obligations of contracts need not be considered for the reason that we have held that the act was not intended to be and is not retroactive.
For the reasons assigned, the judgment appealed from is affirmed.
Affirmed.
Concurrence Opinion
A concurring opinion is usually looked upon as evidencing doubt, on the part of the author, of the soundness of the reasoning set forth in the controlling opinion. Such is not true in this instance. I feel that what my associates have said is logical and sound, and yet I find, among the many arguments and contentions of counsel, reasons on which the decree might have been based, which reasons appeal to me as conclusive of the issues involved, and I cannot resist the impulse to set them forth, particularly as the only reason given in the controlling opinion is one which results from the conclusion that the framers of a written statute did not intend to say what they plainly did say.
I do not feel that the framers of the act of 1932 intended that it should have retroactive effect. I believe that they did not mean, in 1932, to say that, into all policies issued on or after January 1, 1907, certain conditions should be written. Nevertheless they did say just that, and an issue is always extremely controversial which depends upon the conclusion that that which is expressly stated was not intended.
That the statute of 1932, if given retroactive effect, is violative of the provisions of the State and of the Federal Constitution, appears to me plain, and, for my part, I prefer to eliminate that statute from consideration by holding that, if it is interpreted as having retroactive effect, it is unconstitutional rather than by the method adopted by my associates.
If interpreted as having retroactive effect, it is unconstitutional because it would then be permitted to impair the obligation of the contract of insurance entered into in 1927, some five years prior to its enactment.
A state statute may not validly impair the obligation of a private contract. If there is an exception in the case of a statute prompted by grave public or social emergency, that exception results only from the inherent police power of the state. The statute involved here is not so prompted. At the time of the issuance of the policy sued on, Act No.
Likewise, the State Constitution, in section 15, art. 4, contains a similar inhibition: "No ex-post facto law, nor any law impairing the obligation of contracts, shall be passed; nor shall vested rights be divested, unless for purposes of public utility, *526 and for just and adequate compensation previously paid."
The act of 1932, if it is effective here, would give one of the parties to the contract the right to apply the reserve to the purchase of paid-up insurance: in other words, to change the obligation fixed, as a result of the act of 1906, at $207 to an obligation for $24, which would be the amount of recovery if the act of 1932 is to apply.
It is true that the provision for automatic extended insurance was not expressly contained in the policy as it was originally written, but, as a result of the interpretation placed by the Supreme Court on the act of 1906 in the decision of Watson v. Metropolitan Insurance Co., supra, it was written into that policy as the result of law, and there can be no doubt that the provisions of a contract are protected by constitutional inhibitions, whether those provisions be contained in the contract as written, or be written into the contract as the result of law.
It is equally certain that, where a contract is entered into in view of the prevailing law on the subject, even though the rights under the contract may not come into existence until after the law has been changed, nevertheless that contract should be interpreted in the light of the law as it existed at the time the contract was written and not in the light of the law as it may have been subsequently repealed or amended. The right to extended insurance here did not, under the terms of the contract, come into existence until there should be a lapse, but once the right to extended insurance upon a lapse was written into the policy, it remained a part of the policy and should not be written out by some later law.
In Gillespie v. Cammack, 3 La.Ann. 248, 249, is found an interesting case involving a statutory change in the amount of protest fees allowed to the holder of a bill of exchange. When the bill of exchange was issued, the law provided for 10 per cent. of the amount as a protest fee. Before the right to the fee came into existence the law was changed, and the amount of protest fees was limited to 5 per cent. When it became necessary to sue on the bill, the question of the proper amount of protest fee was presented. In the syllabus of that case appears the following: "Where, at the date of a bill, a statute was in force allowing damages at ten per cent. in case of protest, the right to damages at that rate must be considered as part of the contract. A subsequent statute reducing the rate, though in force at the time of suit, cannot affect the right of the creditor to damages at the rate fixed by the statute in force at the date of the contract."
In the body of the opinion the court said: "The right therefore to ten per cent. damages, if the bill should be returned protested, being conferred by the statute, must be considered as part of and embodied in the contract, and the subsequent statute must not be construed to operate retrospectively so as to take away a vested right."
In Town v. Morgan's Syndics,
In Bank of Minden v. Clement,
"Section 10, article 1, of the Constitution — `No state shall * * * pass any * * * *527 law impairing the obligation of contracts' — has been much considered by this court and often applied to preserve the integrity of contractual obligations. * * *
"In Sturges v. Crowninshield, 4 Wheat. 122, 197, 198,
The policy in the instant case, like the policies in the Clement Case, were affected on issuance by the law in existence at that time.
It is contended that the act of 1932 resulted from public necessity and was an expression of public policy; that it deals with a matter which is affected with a public interest and that, therefore, it may validly contain provisions which would otherwise improperly impair the obligation of contracts.
We agree with counsel for plaintiff that the exception to the fundamental rule is not a question of public policy, but is a question of the valid exercise of the police power of the state. Such a law, to be valid and to be given retroactive effect, must result from some great public need or requirement. In legislation dealing with the safety, the health, and the morals of the general public, the inhibition against impairing the obligation of contracts has not been applied. For instance, in Home Building Loan Association v. Blaisdell,
"An emergency existed in Minnesota which furnished a proper occasion for the exercise of the reserved power of the state to protect the vital interests of the community. * * *
"The legislation was addressed to a legitimate end; that is, the legislation was not for the mere advantage of particular individuals but for the protection of a basic interest of society."
In the syllabus of the Morris Case appears the following: "Mortgage Moratorium Law, providing for postponement of foreclosure sale beyond due date of mortgage debt, held not unreasonable exercise of state's police power in view of economic emergency, and therefore not invalid as impairing obligation of contract."
Defendant would bring the legislation now under discussion, to wit, the act of 1932, into the category of that considered in the cases above referred to, contending that legislation affecting insurance companies is affected with a public interest; that it is quasi public in nature and that, therefore, such legislation may be constitutionally retroactive, and in support of this view cites the decision of the Supreme Court of Louisiana in Treigle v. Acme Homestead Association,
We see in the statute of 1932 no attempt to produce a result obviously necessary for the public good or obviously required for public safety or public morals.
Counsel for defendant cites many cases in which acts of Congress have been held to affect contracts previously entered into. But there is no prohibition against such congressional action. Both the federal and the state constitutional restrictions are directed solely at state legislation. Counsel cites other cases, such as Gager v. Teche Transfer Co. (La.App.)
I am, therefore, of the opinion that the statute of 1932, if considered as having retroactive effect, is unconstitutional, and that a decree in plaintiff's favor could better have been based on the unconstitutionality of that statute. I, however, concur in the reasons and decree issued by my associates. *623