Langdeau v. Narragansett Ins. Co.

• Decision Date: 16 May 1963
• Docket Number: No. 3032,3032
• Citation: Langdeau v. Narragansett Ins. Co., 191 A.2d 28, 96 R.I. 276 (R.I. 1963)
• Parties: C. H. LANGDEAU, Liquidator for the State Board of Insurance of the State of Texas v. NARRAGANSETT INSURANCE COMPANY. Eq.
• Court: Rhode Island Supreme Court

Page 28

191 A.2d 28

96 R.I. 276

C. H. LANGDEAU, Liquidator for the State Board of Insurance of the State of Texas v. NARRAGANSETT INSURANCE COMPANY.

Eq. No. 3032.

Supreme Court of Rhode Island.

May 16, 1963.

J. Joseph Nugent, Atty. Gen., Francis A. Kelleher, Sp. Counsel, for General Treasurer.

Christopher Del Sesto, Providence, for receiver.

JOSLIN, Justice.

This is a petition for instructions filed in a receivership proceeding by the director of business regulation of the state of Rhode Island in his capacity as receiver of the respondent corporation pursuant to G.L.1956, chapter 14 of title 27, otherwise known as the Uniform Insurers Liquidation Act. The cause is here on appeal by the general treasurer of the state from a decree of the superior court directing him to turn over to the receiver certain bonds belonging to the respondent which have been deposited with the general treasurer pursuant to G.L.1956, § 27-1-5.

Prior to his appointment as receiver, the director of business regulation was allowed by the superior court to intervene in these proceedings. See Langdeau v. Narragansett Insurance Co., R.I., 164 A.2d 314.

This cause was before us on an earlier appeal of the general treasurer from a decree of the superior court directing him to turn over to the receiver the bonds. See Langdeau v. Narragansett Insurance Co., R.I., 179 A.2d 110, hereinafter sometimes referred to as the second Langdeau case. In the second Langdeau case in reversing the decree appealed from this court held that the deposit of the bonds with the general treasurer as required by § 27-1-5 'was intended to establish a special trust fund for the benefit of policyholders'; 'that the trial justice erred in ordering the general treasurer to turn over forthwith to the receiver the securities in question without first giving him an opportunity to discharge the duty expressly incumbent upon him under § 27-1-8'; and that the legislature in enacting the Uniform Insurers Liquidation Act and particularly § 27-14-2(8) thereof did not intend 'that it should supplant or modify §§ 27-1-5 and 27-1-8.'

The second Langdeau case was decided by this court in March 1962. Subsequent thereto the general assembly enacted P.L.1962, chap. 225, which amends G.L.1956, chap. 14 of title 27, by adding thereto § 27-14-20. That section provides that: 'The provisions of section 27-1-8 of the general laws entitled 'Return of deposit on termination of business' shall not apply in any case where the director of business regulation has been appointed and is acting as receiver, pursuant to the provisions of this chapter.'

The first question that now must receive our consideration is whether chap. 225 is retrospective in nature and shall apply to this receivership proceeding which was pending prior to its enactment.

A close scrutiny of chap. 225 is required in order to determine whether there is clearly manifested by express language or by necessary implication an intention that it operate retroactively, for without such expression or implication it must be assumed to operate only prospectively. Capobianco v. United Wire & Supply Corp., 78 R.I. 309, 82 A.2d 170. So far as the text of the act itself is concerned some of its provisions might be considered as being retroactive. Those provisions are '* * * where the director of business regulation has been appointed and is acting as receiver * * *.' (italics supplied) The use of the words 'has been' and 'is acting' in lieu of the customary 'shall' arguendo could constitute a manifestation of such intention. They are not, however, the equivalent of a direct expression of retroactivity and thus are not so 'clear, strong, and imperative that no other meaning can be annexed to them * * *.' Jennings v. United States Bobbin & Shuttle Co., 44 R.I. 388, 390, 117 A. 647, 648.

The receiver contends that chap. 225 was enacted by the legislature in order to overcome the impossibility of policyholders ever receiving the benefits of the securities deposited with the general treasurer. He further argues that this impossibility results from the fact that he has no assets with which he can pay or extinguish the claims of the policyholders and that payment or extinguishment of such claims are, under § 27-1-8, a condition precedent to relinquishment of the trust securities by the general treasurer.

In the second Langdeau case, however, in referring to a similar argument by the receiver this court said, 179 A.2d at page 113: 'On our view, therefore, of the special purpose of §§ 27-1-5 and 27-1-8 we are of the opinion that the trial justice erred in ordering the general treasurer to turn over forthwith to the receiver the securities in question without first giving him an opportunity to discharge the duty expressly incumbent upon him under § 27-1-8. We construe that duty to be paramount. It is not impossible of performance as contended by the receiver.' In view of such finding, there is not the clear implication required by Capobianco for retroactive effect to be given to chap. 225.

Absent such express language or necessary implication the act may still be given retroactive effect if falls within the exception to the rule of statutory construction expressed in Capobianco. The exception to such rule is stated in Grinnell v Marine Guano & Oil Co., 13 R.I. 135, 136, as follows: 'It is not an insuperable objection to a remedial statute that it affects pending suits, if it affects them remedially, and neither violates vested rights nor impairs the obligation of contracts.' The exception goes not only to remedial statutes, but also to statutes affecting matters of procedure and practice. Hartley v. Johnson, 54 R.I. 477, 175 A. 653; 50 Am.Jur., Statutes, § 482, p. 505.

Section 27-1-8 deals with the kind of notice required to be given policyholders prior to the trust securities being surrendered by the general treasurer, and in the second Langdeau case this court clearly implied that this statute is procedural. Practice and procedure connote the method of proceeding and the means and steps by which legal rights are enforced. Duggan v. Ogden, 278 Mass. 432, 180 N.E. 301, 82 A.L.R. 765; Bascom v. District Court, 231 Iowa 360, 1 N.W.2d 220.

In Duggan the court in holding procedural a statute providing for the manner of serving notice on a nonresident defendant in a motor vehicle accident occurring within Massachusetts said 278 Mass. at page 434, 180 N.E. at page 302, 82 A.L.R. 765:

'There were added alternative provisions to the effect that notice of such service and copy of process might be served upon the defendant if found within the commonwealth by an officer qualified to serve process, or if found without the commonwealth by a sheriff or deputy sheriff of any county in this commonwealth or by a duly constituted public officer qualified to serve such process in the jurisdiction where the defendant is...