*1 Fоr and Justices Justice Weintraub, affirmance—Chief Francis—6. Hei-ier, Wachenpeld, Burling, Jacobs
For reversal—Hone. THE OF AMERICA PRUDENTIAL INSURANCE COMPANY AND THE PANY, LIFE MUTUAL BENEFIT INSURANCE COM PLAINTIFFS-RESPONDENTS, v. CHARLES R. HOWELL, OF AND BANKING INSUR COMMISSIONER JERSEY, K. THE STATE OF NEW AARON ANCE OF NEELD, THE OF DIVISION OF TAXATION DIRECTOR INTERVENOR, JERSEY, AND THE STATE OF NEW OF DEFENDANTS-APPELLANTS, JERSEY, NEW STATE OF EQUITABLE LIFE SOCIETY AND THE ASSURANCE STATES, PLAINTIFF-RESPONDENT, UNITED OF THE HOWELL, OF BANKING R. COMMISSIONER v. CHARLES JERSEY, THE OF STATE OF NEW AND INSURANCE NEELD, AARON OF THE DIVISION OF DIRECTOR K. JERSEY, AND THE OF NEW OF STATE TAXATION JERSEY, INTERVENOR, NEW DEFENDANTS- OF STATE APPELLANTS. Decided February January
Argued 1959. *3 Satz, Jr., Attorney-General, David M. Deputy argued Mr. and intervenor-appellants (Mr. the cause the defendants Furman, attor- Jersey, General Hew David D. Attorney ney). the cause for the J. O’Mara plaintiffs-
Mr. Edward argued O’Mara, Schumann, & Davis Ijynch, (Messrs. respondents Smith, A. Jr. and James C. Sylvester Messrs. attorneys; Session, counsel).
The opinion of court was delivered by J. These are consolidated actions instituted Burling, in the Court, Division, Law Superior for declaratory judg ments, brought by plaintiff insurance companies against Commissioner of and Insurance and the Banking Director of the Division of Taxation, and declar seeking judgment that certain ing made payments by plaintiffs holders of are deductible from taxable considera tions under 54:184-5. N. of New State was Jersey leave granted to intervene and filed counter claims for back taxes interest each against plaintiffs. The Court, Superior Law Division entered the judgment sought by plaintiffs dismissed the counter claims. The defendants and the intervenor prosecuted appeal Superior to the Court, Appellate Division. While certification, the cause was there, motion for direct pending 1:10-14, R. R. pursuant was made by defendants granted.
Pursuant to N. J. 54:184-3, S. A. life insurance com panies business in State are doing this required to pay tax on “taxable premiums collected” them under all 2% issued on New residents Jersey and a tax on the “taxable considerations collected” under 1% annuity contracts such residents.
N. J. S. A. 54:184-5 defines these terms as follows: * * “* considerations, speci- taxable and taxable act, hereby gross fied in section three of this defined be *4 premiums gross considerations, and less sum the following: (a) Premiums received for reinsurance and assumed or (but excluding values) considerations policies cash surrender on returned contracts, or paid cash, (b) by policy payment in Dividends used holders premiums, deposit company, of renewal or left on with the and (c) premiums paid Discount on in advance.” at issue N. question is whether A. 54:184-5 J. S. (a) * * * permits a deduction as “considerations returned contracts,” on sums returned the to holders by companies follow- under the individual contracts
of group circumstances: ing ANNUITY CONTRACTS CROUP employee prior employment Upon (a) to of of an termination annuity payments.
the commencement of prior Upon employee (b) of an to the commencement the death annuity payments. of employer. by (e) Upon the the of the contract cancellation INDIVIDUAL ANNUITY CONTRACTS prior (a) Upon prospective to the of a annuitant the death payments. of commencement by prospective Upon (b) the the the contract cancellation of annuity payments. prior annuitant to the commencement Act, 1945, Tax plaintiffs Since the date the effective considerations have deducted the amount gross from State, under on residents of this annuity contracts collected under all them to by policyholders benefits returned 1944 to years listed during above circumstances and Prudential inclusive, with of Mutual exception returned benefits not, which did deduct period, during with- individual instances under drawal. re filed annual in question plaintiffs
During period on and Insurance ports Banking Commissioner years of March each year or the first day before 54:184-8, A. inclusive, as N. J. S. by required to After of such receipt deductions. aforesaid claiming before required annual the Commissioner report, report each to ascertain day May year, first all Taxation, neces to the Director Division of facts of tax Director fix amount payable enable the sary to N. J. S. A. 54:18.4-8. by plaintiffs. was plaintiffs, so filed by questioned
None of reports, Director. Taxes Commissioner or or objected were when due the Director paid billed each year. of suit the Com the institution prior
In 1957 N. asserted that under and Director missioner sums deducted under the aforementioned 54:184-5 (a) *5 considerations the amount of gross circumstances from were “considera- their earlier reports annual statute, but meaning tions returned” within deductible, hence not values” and rather were “cash surrender permissible not be and deductions would that similar 1, 1957. the annual due March report instant consoli filed the Plaintiffs February on seeking 2A :16-50 et seq. under N. J. S. dated actions statutory as to the meaning declaratory judgment deduction A. permitting provision 54:18A-5(&)) (N. sur cash excluding considerations “premiums (but as applied or contracts render returned on values)” policies and individual policyholders group moneys paid circum under outlined previously contracts stances. filed defendant New Jersey intervening
The State of
additional
taxes
counterclaims demanding judgment
inclusive,
1944 to
the years
so deducted for
sums
interest and costs.
together
Lane, entered
Law
Court,
Division, Judge
The Superior
favorably
plaintiffs’
the statute
construing
a judgment
and
the counterclaims.
position
dismissing
upon
meaning
first be focused
Attention should
N. J.
utilized in
8.
surrender value” as
of “cash
and
the plaintiffs,
is the
position"
It
54:18A-5(a).
the term “cash
fact,
found as
the trial court so
in-
in the insurance
term
value” is a technical
surrender
of life insurance
only
and has rеference
dustry
made under
whatever to payments
no application
has
contracts.
stems in part,
meaning
The asserted technical
insurance policies
difference between life
least,
the basic
from
under life in
The risks assumed
contracts.
are diametric
under
surance policies
elements
involves the traditional
Life
opposites.
<?.,
of loss and distribution
of risk
insurance,
i.
shifting
contracts, on
Annuity
a broad base.
loss over
risk of
The fundamental
investments.
hand,
basically
the other
*6
is
1
distinction
set forth in
Insurance
aptly
Appleman,
Practice,
83,
Law and
76
as follows:
p.
(1941),
§
“Ordinarily,
recognized,
laymen,
it is
even
of
that contracts
distinсtly
life insurance
of
different. One involves
payments
amounts,
premiums, by
of stated
known as
the insured
period
years
of
in
over
return for which
an
the insurer creates
in
immediate estate
a fixed amount in the
of
event
his death while
* * *
standing.
good
in
There
an
is
immediate hazard of loss
upon
insurer,
required performance by
thrown
with the
obligations
designated
of
insured
certain
at
intervals of time.
diametrically exposed
An
is
almost
recipient
this. The
person designated
money.
person paying
as the
is
pays
time,
in
He
pany
a fixed sum at one
for
return
which the com-
perform
obligations
period
must
then
a series of
of
over
years,
designated
longer upon
The hazard of
is no
times.
loss
company
recipient
upon
may
any
but
who
die before
benefits
creating
are received.
an
Instead
immediate estate for the benefit
others,
he has reduced his immediate estate
favor of future
contingent
positions
exactly
income. The
are almost
An-
reversed.
nuity
therefore,
recognized
must,
be
as investments rather
than' as insurance.”
The courts have often had occasion to refer to these basic
differences for
taxes,
of estate
purposes
and inheritance
have found them
in that
see
Cruthers
sphere,
e.
controlling
g.,
Neeld,
v.
N.
14
497
&
J.
Bank
(1954); Central Hanover
Martin,
Trust Co. v.
129 N. J.
186
Eq.
1941),
(Prerog.
affirmed 127 N.
L.
1942),
J.
468
Ct.
129
(Sup.
affirmed
N.
L.
&
J.
127
A.
(E.
1942), affirmed Central Hanover
&
Bank
Trust Co. v. Kelly,
94,
319 U.
63
945,
S.
Ct.
S.
Bearing between the two dichotomy contracts, types it is not that a strange technically descrip term tive such as “cash surrender value” would be carried over from one of contract type to another within the trade. We concur in the factual of the trial finding court, as testified to by plaintiffs’ experts, that within the insurance business “cash surrender value” has a technical e., i. a refund meaning, accumulated reserve (the of net excess level over the cost of insuring with, in was in force for the time the policyholder interest, plus some added instances, an surrender charge) The finding of life insurance. only to applicable the technical term surrender value” has in fact “cash business contended and limited the insurance meaning exhibit introduced buttressed of annual statement evidence which a blank form Commissioner requires that N. 17:23-l com- to all insurance and Insurance to furnish Banking their financial condition. showing panies purposes substan- further this form conform statute requires the National tially adopted by form statement *7 5 of of Insurance On page Association Commissioners. there is a and loss statement. annual statement form gain At are headings indicating of the there column top page there the side various of insurance contracts. On types each are included under are various items which to be that items entitled It is column heading. significant out Benefits” crossed ££Death Benefits Surrender and under “Individual Annuities” the columnar headings Thus, De- both the and Annuities.” “Group apparent^, and the National Asso- and Insurance partment Banking do that recognize Insurance Commissioners ciation of when those any death surrender benefits have meaning contracts, do although they to applied terms are insurance have in life policies. meaning if term sur- defendants that “cash But the counter it has also an ordi- render has technical meaning value” a is evidenced the fact that in several This nary meaning. issued by plaintiffs contracts standard annuity an receive what is is option the policyholder given as a surrender value” and in the “cash denominated contracts phrase individual and group other utilized frequently plaintiffs. “cash value” was con- this usage Plaintiffs’ experts explained that “cash surrender value” was due the fact was tracts in life because its public usage a term familiar to carried an- and therefore over was insurance into policies, contracts nuity describe what generally would be returned to the if annuitant the contract wеre cancelled.
The inference most favorable to defendants which can be derived plaintiffs’ from the the standard usage term “cash surrender am- value” is a technical biguous, having to those in meaning the insur- ance and industry a different a meaning layman. This is a dilemma which B. S. 1:1-1 does not solve. B. 8. 1:1-1 provides in part: * * * “In state, and construction the laws statutes this ** * phrases given generally accepted
words and shall be their meaning, according approved usage language. to the Technical phrases, phrases having special words and words or ac- cepted meaning law, in the be shall construed accordance with аccepted special meaning.” such technical or Nor can the primary of what the problem in- Legislature tended when it the term employed be resolved reference to the plain or literal canon. meaning interpretive
It should be parenthetically observed that defend inference, ants seek to draw additional other than fact that “cash surrender value” utilized in is sometimes sense, non-technieal from the fact the term was utilized contracts, in their standard by plaintiffs that such namely, constitutes an admission usage against on the part interest which *8 fatal to their in the instant position case. This is without merit argument for two First, reasons. have offered sufficient evidence to both the trial court, court and this satisfy the term “cash surrender value” does have the technical contended meaning for, further have they satisfactorily their explained inconsistent in the standard seeming usage and more Secondly, we are important, contracts. legislative concerned intention in determining the fulcral adopting “premiums or language considerations cash surrender returned (but excluding values) on policies cannot, or contracts.” Plaintiffs means alleged interest, admission be from against estopped lia- denying bility for tax which they contend did not Legislature intend where, here, to impose, the reason for especially, usage explained. then,
The basic is whether the inquiry, Legislature intended the “cash surrender value” in its phrase technical signification, or in some in other sense broad to enough clude refunds made to contract holders on death or cancellation of their contracts, to the prior happening of the condition In our view annuity payments. triggering the Legislature the term in technical employed its meaning, e., i. as applicable, to life insurance only not policies to annuity contracts. is,
This conclusion in part least, at arrived at by an examinаtion of other statutes the term “cash employing surrender value.” Eor instance N. J. A. 17:34-15 S. sets forth the standard which must provisions be included in all of life policies State, insurance issued in this and re the inclusion of a “cash quires surrender value” clause based N. J. upon table. 8. A. 17:34r-19 then mortality specifi this cally provides that “shall requirement not apply * * * Moreover, annuities.” the Standard Nonforfeiture Law enacted in New (N. 17:34-21.1) Jersey 1943 makes it to include a cash mandatory surrender clause stated based on a table and rate mortality of interest all life insurance issued or delivered in policies this State. subsection of that statute Again, (f) expressly provides part: section shall “This apply any reinsurance, insurance, endowment, group pure reversionary contract,” Thus, (emphasis supplied). just two before the enactment of N. J. A. years 1945, 8. 54:18A-5 (L. c. p. 5), manifested an inten- Legislature § the term tion that “cash surrender value” is applicable life insurance. only Another factor the limited contended suggestive usage is the fact by plaintiffs two only reported decisions on the issue in the question instant case were other jurisdictions decided two several years prior the enactment of J. S. A. N. 54:18A-5. Both of these *9 resulted
decisions in a construction the state law taxing similar that presently urged by plaintiffs.
In the landmark
on the
case
problem, Equitable Life
Johnson,
Assurance Society United States v.
53 Cal. App.
2d
The issue first raised was whether by Equitable considera- by company tions received contracts were under received” the California Constitu- “gross premiums tion. that the term Equitable “premiums” was argued one associated peculiarly policies insurance, of life made payments were annuity policyholders designated as considerations. The court properly concluded that: follows, analysis from “It an of the California constitutional statutory analysis provisions, proper meaning from ‘premium,’ weight authority term and from the outside state, upon that considerations received the sale annuities ‘premiums’ such, position and are taxable as and that taken
plaintiff appeal (127 page 106). on its unsound.” P. 2d The issue second raised was the one Equitable raised instant case: whether refunds considera- tions were deductible under the provision permitting deduction for “return State premiums.” Johnson case must be limited “phrase to such argued similar situations for fraud or [rescission mistake] cannot extended be to include and cash refunds values paid holders upon cancellation of their before takes effect.” The Cali- fornia court with the State’s assertion agreed that “cash surrender value” to be required paid contracts of life
127 “return within premiums” meaning Insurance were not that refunds Constitution, hut declared expressly of were “return annuity contracts рremiums”: on many reasons, these we think it be clear “For to that cash paid values a on the cancellation of life insurance surrender provision question. as used in are not return the tax paid that or surrender values But that does not determine cash prior starting pure to on the cancellation of a contract * * * payments premiums. are of to the annuitant not return Annuity by purchaser provide to the contracts their terms for refunds they provide, purchasers upon If did few so cancellation. Payments risk found refunded before the would be them. so e., payments annuitant—regardless attached—i. start to the before applicable, Code are of whether sections 2617 and 2618 of the Civil meaning premiums’ of the Con- are contract ‘return within the (127 page 109.) 2d at stitution.” P. further findings While the court remanded the cause for amounts, and the refunds involved types on of the plain a agreed “Stipulation Judgment,” to parties of returned con- effect of which deduction uphold was to here in issue. siderations on the type in Equitable A similar result was reached the court Life Hobbs, 534, 155 Kan. Assurance United v. Society States 2d 477 Ct. (Sup. 1942). P. A. An N. J. S. 54:18A-1 el reveals analysis seq. it is a drafted act and that terms used tightly “pre- differentiates between plainly Our statute precision. “considerations,” applicable miums” the former and the contracts. latter such as N. J. specialized In tax act drafting must have been 54:18A-1 el all those concerned seq., and Kansas in faced California aware problems cases, three Johnson and Hobbs decided supra, only The inference in including before. years strong cash surrender “(but excluding the parenthetical phrase in- N. J. values)” Legislature S. A. 54:18A-5(a) reached in those cases. tended to follow result occasion, states have had under their two other Since statutes, pass question local taxing upon posed and have held that returned considerations the instant case Metropolitan contracts are deductible. Life Insurance Co. Court v. Sangamon Stratton (Circuit Illinois, County, 1946) Equitable (unreported); Life Assurance Society Maryland, City v. (Baltimore, Hitchins Court, April 1957) (unreported).
The defendants that there no difference urge significant between cash surrender life insurance and monies values on returned ato annuitant on surrender or prospective cancel- lation at least prior maturity date, *11 insofar the statute objectives legislative taxing are concerned. The further assert that absent defendants a of the relationship reasonable between deductions showing allowed the below the by court of underlying purрoses e., statute, the i. a tax total insurance upon the business State, done the by within this the company construction contended for render plaintiffs would unconstitutional aas benefit N. J. discriminatory prohibited by Const. 14¿7¿ I, Art. I IV, VII, and Art. Sec. and the par. Sec. Amendment of the United States Constitution.
Thus, the issue raised a is whether there is rational basis between cash surrender the value on a distinguishing life insurance and the return the policy considerations on paid contract, an the nature and light basis of the tax so, If then imposed. not con- only is the overcome, stitutional problem raised see Robson v. Rodriguez, 26 N. J. 517 but the (1958), final litmus test of legislative is met. intention
Plaintiffs on lay stress the essential differences between cash surrender values on life insurance the return of considerations paid on annuity contracts—defend- ants stress the similarities. The plaintiffs that from argue the of the insurance a standpoint life company, policy creates an immediate risk when the first attaching is premium whereas paid, annuity contract, the e., i. assumed, risk the primary annuitant may outlive his life does not attach expectancy, until the annuity In life matures. insurance the premium be- immediately comes of a reserve fund part accumulated pursuant to a table to the benefits forth in the mortality set provide Under the level the policy. premium excess plan premium accumulated, interest, in the deposits years are early in the reserve fund to the form reserve. When the policy is policy surrendered, cash surrender value is calculated premiums that have been the date taking paid to up surrender, plus a interest minus the proper factor, expense allocable and minus a policy mortality charge (which is the cost of for the insuring policyholder period which the inwas force).
. contract, A deferred hand, on the other is similar a of money interest deposit prior maturity'—an accumulation year year of stipulated purchase price. The return to the policyholder upon termination cancella- tion of the contract under issue, the circumstances here in is calculated the basis considerations paid by thereon, interest minus policyholder plus expenses factor company. mortality does not enter into determination of refund of considerations under an annuity Thus, contract. amount returned argue under an policyholder nothing more than a consideration returned as that term used in statute, and is “cash surrender value” which differs *12 from a returned a consideration that is mortality factor from subtracted the premiums returned.
The defendants contend that the of a mortality difference factor is not one which a has reasonable relationship the of the statute. It purpose is that both taxing argued cash surrender values on life insurance and cancellation termination on annuity contracts, benefits calcu- although bases, lated on different essentially both ‘bargained-for” conditions and therefore differ from refunds which arise as a result rescission for predicated, on fraud example, or mistake. difference, from the of view tax point statute, of the that
is in the case of life insurance, where the is policy terminated the instаnce the insured, has company done business for the period which the inwas
130 has It has received a consideration force. significant of insurance. that in the business period, engaged, during hand, contract, the other company On an The deduction received a consideration. has not significant a administration is not minor expenses charge contract, it can- termination of activity. Upon gainful in which done business for period not be to have said Erom the standpoint was force. has where the contract been the result is similar to company for cause. rescinded N. in mind the tax imposed by
And if we bear
trans
is a tax on the
business
A. 54:184-1 et seq.
gross
discern
valid and rational basis
acted, it is not difficult to
the insurance
between allowing
company
distinguishing
for the return
from
collected
proceeds
a deduction
gross
where
has been
no business
policyholder’s equity
not
it where it has. The
done
but
company,
allowing
one which
been emphasized
business”
has
theory
“doing
as the
factor.
German
some of the cases
controlling
Cf.
Ill,.
Cleave,
Co. v. Van
It should be emphasized although Legisla a deduction it need not have allowed from may, “gross ture returned from for considerations considerations” The tax one on contracts. con being gross was its make. The siderations, the choice intention to deduction is derived from the outlined allow the factors this which lead to the opinion in the conclu foreportion “cash surrender value” used in its sion that was phrase to life insurance technical sense relating contracts. The distinction be applicable situations, business, in terms of tween the two serves doing treatment, a rational basis for differential rela provide act, purposes tion to ultimate and buttresses arrived at. conclusion previously advanced, the reasons Eor from judgment appealed *13 affirmed. The crucial here con- (dissenting). inquiry Hehee, and I no cerns find indication of legislative design; between intention to life insurance distinguish policies exclusion, in the ordained L. c. N. J. surrender values” 54:18R-5(a), “cash as an allowable from the “taxable deduction premiums taxable considerations” as in 3 of the act, section specified defined section 5 gross “to be contract premiums alia, considerations,” less, inter re- gross Premiums “(a) ceived reinsurance assumed and or considera- premiums tions cash (but surrender returned on excluding values) * * contracts, or policies I would not have the intent of the determined lawgivers “* * * as a fact on within testimоny that “expert” ‘cash surrender business value’ has technical i. ea refund accumulated reserve meaning, (the excess of net level over cost insuring for the time the policyholder with, was force instances, some an added surrender interest, charge) plus applicable policies of life insurance.” only of clause arrangement (a), apparent parenthetical or “premiums considerations,” modification of followed by contracts,” words “returned on is in my of the understanding negation limitation of suggested surrender “cash values” provision to life insurance policies. Indeed, have, Prudential and Mutual since the act, made adoption no such deductions in case any an individual involving contract “(b) [u]pon the cancellation of prospective annuitant to the commencement of prior payments,” but now And, assert the to do so hereafter. right out pointed majority, contracts at issue here provide surrender “cash values” or “cash value.” Plaintiffs’ Shepherd explained witness the term “cash surrender * * “* value” was employed annuity contracts be- cause we would thought public understand it because their with the term familiarity in their life insurance not this the But is essential sense policies.” and significance *14 132 the an- these to hy conveyed
of the transaction as the mutual intention the used to express nuitants terms Son,& Inc. v. Cata- M. and Brewster George expectations? Co., A contract 17 20 (1954). Construction N. lytic here com- and makes known and agreement obligation; has certain and definite mon the a acceptance expression themselves contracts. The annuity parties application is rejected that now have the contract a characterization given as illusory. policies on life insurance premiums of payment method,” the deduction the “level and premium
according
a “mortality
and
policy”
charge”
allocable
the
“expense
the
the cash surrender value of
policy,
in determining
by plaintiffs
of the distinction offered
conclusive
Plaintiffs’
legislative
the
intent and purpose.
assessing
testified in
Peterson and Lunsford all
witnesses Menagh,
are deter
and
surrender values
annuity
substance
effect that
sum
paid plus
mined
the
or considerations
premiums
and
interest,
they
the
accrued
minus
company expenses;
Guertin
actuarial witness
affirmed
also
plaintiffs’
of life
policies repre
the “cash surrender value”
insurance
interest, less company
sent the
accrued
premiums paid plus
to the
point
cost of
expenses
deemed to be
policy,
surrender or cancellаtion
factor,” an actuarial
assumption
“mortality
“according
table,
in the class
policyholders
some
mortality
issued,
will die
to a
according
in which that
Thus,
surrender
certain rate
the “cash
value”
age.”
based on
interest,
plus
life insurance
means
factor”;
and so
expense
“mortality
minus
including
returned
also the “considerations”
on an
interest
premiums plus
Compare
minus
represent
expenses.
507,
v.
61
Ct.
Guggenheim
U. S.
Rasquin,
(1940).
Unlike illustration contract given Practice, Insurance Law as Appleman, pay- § “in fixed ment hy person “recipient” designated time, in return which the must sum at one for company then a series perform over a obligаtions period years, times,” designated contracts here provide payments installments. And there are provisions death benefits; and, case of cancellation under a non- clause, forfeiture annuitant of a given option cash surrender if the value: annuitant should die before date, there would be payable installment (a) *15 or premiums paid the cash surrender (b) value, whichever is Under the greater. clause, non-forfeiture the annuitant is an a given option of reduced or cash paid-up annuity a value which is equated “cash surrender value.” There is in this no difference regard of substance between the Prudential Mutual and In Mutual’s policies. policy, term “cash surrender value” used is in the non- throughout forfeiture, loan, dividend, and settlement clauses. option The death benefits under its payable Cash Deferred Life interest; Annuity equal premiums paid without no surrender is under permissible clause; the non-forfeiture if the policy- holder he defaults, a lesser And given paid-up annuity. Equitable’s policies for death and provide benefits cancella- benefit, tion. The in the event of death before the annuity date, a cash surrender equals value or total premiums, whichever is The cash surrender value greater. is here value,” termed “cash defined in the contraсt and described in the policy schedule captioned “value on surrender or This lapse.” also policy provides for benefits characterized as “cash values.”
Prudential’s contracts” “group annuity for death provide and termination-of-employment benefits equal pre- miums paid by interest; employee plus there is a like no plan provision íot interest. making Equitable’s Retirement Eon-Contributory Con- Annuity tract makes provision no for benefits either at death or termination of Another employment. plan provides for the same death benefits and cash values as in the Prudential contracts.
The distinctions made by plaintiffs bеtween life insurance and such policies contracts, in respect “moT- fulfillment risk, and are not relevant factor”
tality 2, 3, 54:18fi.-l, statute, N. J. 8. basic annual tax at insurance life lay upon companies collected rate of the “taxable premiums upon 2% * * * insur- under or contracts of all company the taxable upon ance on this residents of State 1% * ** under company considerations collected State,” less certain contracts on residents of this taxes. franchise and other
Rescission or of an cancellation mistake, differ- is in a fraud, like, misrepresentation, ent category.
The themselves cash surrender рarties have provided value; and their intention controls. terms of taken in ordinary contracts are to be their in sense, unless a technical popular usage clearly ; have dicated and where words a common usage avoided, absent technical construction is to be a compelling contra,. Dairies, Inc. v. inference Abbotts Armstrong, Commission, N. J. 319 Salz v. House 18 N. State (1954); Co., Bew v. Travelers’ Insurance 95 N. J. L. 106 (1955); *16 533 & A. Textile v. (E. 1921); Bayonne Corporation Workers, Federation 116 N. J. American Silk Eq. Jur., Insurance, 159; & See Am. 1934). (E. §§ Jur., Statutes, 50 Am. 277. §§ The statutory construction is to purpose bring statute within intention of operation apparent this end the intention of Legislaturе; general law interpretation controls the of its several so parts, be restrained words and words of general may accordingly expanded; narrower the essential reason of significance law over the literal sense of terms. motive prevails which led to the of the law is under- making to its key It is not words but the internal sense of standing. Here, law that it there is meaning. no gives ground had in Legislature view “technical” supposing the common rather than usage.
I would reverse the the cause and remand judgment further with the con- conformity proceedings foregoing siderations. Weesttraub, For Justice and Justices affirmance—Chief
Btjrlifg, Jacobs, Erancis and Proctor—5. For reversal—Justice Hehbr—1.