Department of Insurance of Indiana v. Church Members Relief Ass'n

• Decision Date: 02 April 1940
• Docket Number: 27372.
• Citation: 26 N.E.2d 51,217 Ind. 58
• Parties: DEPARTMENT OF INSURANCE OF INDIANA et al. v. CHURCH MEMBERS RELIEF ASS'N.
• Court: Indiana Supreme Court

26 N.E.2d 51

217 Ind. 58

DEPARTMENT OF INSURANCE OF INDIANA et al. v. CHURCH MEMBERS RELIEF ASS'N.

No. 27372.

Supreme Court of Indiana

April 2, 1940

Appeal from Superior Court, Marion County; Joseph R Williams, judge.

Omer S. Jackson, Atty. Gen., and Jos. W. Hutchinson, Deputy Atty Gen., for appellants.

Johnson & Zechiel and Edwin E. Thompson, all of Indianapolis, for appellee.

FANSLER Judge.

The appellee, as plaintiff, brought this action alleging that the defendants, who are appellants, were interfering with the plaintiff in the writing of certain insurance contracts. An injunction was sought, and the action involves an interpretation of the statute governing the character of policies which might be issued by the plaintiff and a determination of the legality of the policies in question. There were special findings of fact and conclusions of law and a judgment sustaining the plaintiff's right to issue the policies.

Error is assigned upon the conclusions of law and upon the overruling of the motion for a new trial.

The appellee was organized under chapter 195 of the Acts of 1897 (Acts 1987, p. 318, sections 39-421 to 39-446, Burns' Ind.St.1933, sections 9780 to 9805, Baldwin's Ind.St.1934), which provides for the organization of assessment companies. The appellants contend that the act does not authorize, but forbids, the issuance of policies with provisions for fixed extended insurance, fixed paid-upon insurance, fixed loan value, or a fixed cash-surrender value.

The trial court concluded, first, that the defendants are estopped to deny the plaintiff's right to issue the contracts; second, that, by a practical construction of the statutes by the parties, the legal right of the plaintiff to issue the policies has become a fixed right; and, third, that the appellee has the right to issue the policies under the statute.

That the court was in error in its first and second conclusions cannot be doubted. When the right to do a thing depends upon legislative authority, and the Legislature has failed to authorize it, or has forbidden it, no amount of acquiescence or consent, or approval of the doing of it by a ministerial officer, can create a right to do the thing which is unauthorized or forbidden. The administrative officers of the state, as well as the appellee, were bound by the statute. The insurance department had no power to authorize or acquiesce in the issuance of policies unauthorized or forbidden by the statute. An estoppel against the state cannot arise out of the unauthorized acts of state officers. Platter v. Board of Com'rs, 1885, 103 Ind. 360, 381, 2 N.E. 544, 556, 557; Sandy v. Board of Com'rs, 1909, 171 Ind. 674, 677, 87 N.E. 131 132, 131 Am.St.Rep. 273; Ness v. Board of Com'rs, etc., et al., 1912, 178 Ind. 221, 232, 98 N.E. 33, 36, 1002; 21 C.J. § 193 p. 1191; 19 American Jurisprudence, § 166, p. 818.

A so-called practical construction, which apparently means a departmental construction, of a statute is not binding or conclusive upon the state or upon the court. Such a construction may be looked to and considered by the court in construing and interpreting an ambiguous statute, but it cannot in any manner affect the operation or construction of a non-ambiguous statute. Hord v. State, 1907, 167 Ind. 622, 641, 79 N.E. 916, 922; Shutt v. State ex rel. Cain, 1909, 173 Ind. 689, 691, 89 N.E. 6; State v. Mutual Life Insurance Co., 1910, 175 Ind. 59, 79, 93 N.E. 213, 221, 42 L.R.A.,N.S., 256; Metropolitan Life Insurance Co. v. State of Indiana, 1917, 186 Ind. 407, 410, 116 N.E. 579, 580.

The sole question therefore is whether the statute, under which the appellee was authorized to engage in the insurance business, forbids the inclusion of the provisions complained of in the appellee's policies. It is clear that the appellee is operating upon the assessment plan. All of the policies specify the amount of annual or quarterly premiums but there is a provision for the payment of 'subsequent amounts required under this policy,' and another for the collection of additional amounts of premium to maintain legal reserves for the payment of obligations. If the terms, 'fixed paid-up insurance' and 'fixed extended insurance,' are construed as meaning only that the time or period for which the policy is to run is fixed, there seems to be no statutory reason why policies with such provisions may not be issued by the appellee. The policies provide, in effect, that the first premium will insure for a period of one year, the second premium for a period of one year, and the third premium for a period of one year plus an additional fixed period; that, if the first four premiums named shall be paid, the policy will insure for not only the fourth year, but an additional and longer fixed period, and so on. Section 4 of the statute provides that the trustees, directors, or managers shall fix the rates and amounts of premiums, assessments, or periodical calls, and the time and manner of payment, and the risks to be assumed by the company, 'and the duration thereof.' In other words, there is nothing in the act that requires that the premium payments shall be for protection for a period of one year and no more. It is therefore within the power of the appellee to fix the time for which the insurance will run or be extended upon the payment of one or any other number of premiums. But the term, 'paid-up...