Parker v. Continental Cas. Co.

• Decision Date: 10 July 1963
• Docket Number: No. 43314,43314
• Parties: Floy S. PARKER, Appellee, v. CONTINENTAL CASUALTY COMPANY, a Stock Insurance Company, Appellant.
• Court: Kansas Supreme Court

Page 937

383 P.2d 937

191 Kan. 674

Floy S. PARKER, Appellee, v. CONTINENTAL CASUALTY COMPANY, a Stock Insurance Company, Appellant.

No. 43314.

Supreme Court of Kansas.

July 10, 1963.

Syllabus by the Court

1. A legislative act must become a law in its entirety at a single definite time and not in sections or fragments, except where provision is made they they shall act upon certain classes and communities at different times, and upon the happenings of certain contingencies.

2. The courts, in the construction of a statute, start with the presumption that the legislature intended to pass a valid law.

3. It is the duty of the courts to uphold legislation rather than defeat it and if there is any reasonable way to construe the legislation as constitutional and valid, it should be done.

4. In construing a statute, the purpose or intent of the legislature governs when that intent can be ascertained from the statute, even though words or references at some place in the statute must be omitted or inserted.

5. The Uniform Policy Act (G.S.1961 Supp., 40-2201 et seq.) pertaining to policies of accident and sickness insurance is considered and construed.

6. It is only where the insurer refuses, without just cause or excuse, to pay in accordance with the terms of the policy that an allowance can be made to the insured for reasonable attorney fees.

Roscoe W. Graves, Emporia, argued the cause and was on the briefs for appellant.

Marc A. Hurt, Emporia, argued the cause and was on the briefs for appellee.

HATCHER, Commissioner.

This action involves the application of the 'grace period' provision of the Uniform Policy Act pertaining to policies of accident and sickness insurance.

There is no controversy as to the pleadings, and the facts are not in dispute.

The plaintiff, Floy S. Parker, is a resident of Emporia, Kansas. She is the sole beneficiary of an insurance policy issued by the defendant, Continental Casualty Company, to Wilbern W. Parker, plaintiff's husband. The policy provided indemnity for loss of life through accidental means. The policy was issued January 23, 1952. It provided for payment of premiums quarterly.

Wilbern W. Parker paid all quarterly premiums due under the policy except the one due February 1, 1961. He died on February 24, 1961, as the result of accidental injury. On February 28, 1961, plaintiff paid the quarterly premium due February 1, 1961, by mailing defendant a check for $25.00. Plaintiff notified defendant of the death of Parker on March 2, 1961. The defendant sent plaintiff proof of loss forms which were promptly executed and returned to the defendant.

There was no 'grace period' specifically set forth in the policy for the payment of renewal premiums not paid by the renewal dates. The defendant denied liability under the policy and this action was commenced.

The plaintiff contended that a thirty-one day 'grace period' was made a part of the policy by reason of the provision of G.S.1961 Supp., 40-2203(A)(3).

The defendant contended that the statute providing for a 'grace period' did not become effective until five years after the act became effective on June 30, 1951, by reason of the provision of G.S.1961 Supp., 40-2213.

The district court rendered judgment in favor of the plaintiff and defendant has appealed.

We will first present the pertinent section of the act.

G.S.1961 Supp., 40-2202 covers the form of the policy to be used and does not require specific attention.

G.S.1961 Supp., 40-2203 contains the following introductory statement:

'Except as provided in paragraph (C) of this section each such policy delivered or issued for delivery to any person in this state shall contain the provisions specified in this subsection in the words in which the same appear in this section: * * *.'

The paragraph (C) to which the section refers, deals only with filing policies and submission of policies to the insurance commissioner.

Paragraph (A)(3) of G.S.1961 Supp., 40-2203 provides that a provision shall be included in the policy as follows:

"Grace period: A grace period of _, (insert a number not less than '7' for weekly premium policies, '10' for monthly premium policies and '31' for all other policies) 'days will be granted for the payment of each premium falling due after the first premium, during which grace period the the policy shall continue in force.' * * *'

G.S.1961 Supp., 40-2204 provides:

'(A) Other policy provisions: No policy provision which is not subject to section 3[40-2203] of this act shall make a policy, or any portion thereof, less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to this act.

'(B) Policy conflicting with this act. A policy delivered or issued for delivery to any person in this state in violation of this act shall be held valid but shall be construed as provided in this act. When any provision in a policy subject to this act is in conflict with any provision of this act, the rights, duties and obligations of the insurer, the insured and the beneficiary shall be governed by the provisions of this act.'

The section with which we are chiefly concerned, G.S.1961 Supp., 40-2213, provides:

'A policy, rider or endorsement, which could have been lawfully used or delivered or issued for delivery to any person in this state immediately before the effective date of this act may be used or delivered or issued for delivery to any such person during five (5) years after the effective date of this act without being subject to the provisions of sections 2[40-2202], 3 [40-2203] or 4[40-2204] of this act.'

The act contains the following penalty provision:

'Any person, partnership or corporation willfully violating any provision of this act or order of the commissioner of insurance made in accordance with this act, shall forfeit to the state of Kansas a sum not to exceed five hundred dollars ($500) for each such violation, which may be recovered by a civil action. The commissioner of insurance may also suspend or revoke the license of an insurer or agent for any such willful violation.' (G.S.1961 Supp., 40-2214.)

The last two sections of the act (Laws of 1951, Chapter 296) which were not carried into the General Statutes should also be noted.

'Sec. 16. Sections 40-1109, 40-1109a, 40-1109b, 40-1405, 40-1406, 40-1407, and 40-1408 of the General Statutes of 1949 are hereby repealed.'

'Sec. 17. This act shall take effect and be in force from and after its publication in the statute book.' (The act was published in the statute book June 30, 1951.)

The appellant summarizes its contention as follows:

'It is appellant's contention that Section 40-2213 means just what it plainly says, namely that policies without a grace period that could have been lawfully issued prior to the effective date of the Uniform Act, may be issued for a period of five (5) years after the effective date of the act and are not governed by the act and no grace period is to be read into them by virtue of the act.'

The appellant would contend that the effective date of G.S.1961 Supp., 40-2202, 40-2203, and 40-2204 was June 30, 1956, while the effective date of the other sections of the act was June 30, 1951.

The construction suggested by appellant, if sustained, would render the entire act unconstitutional. The Constitution of Kansas does not permit closely related parts or sections of an act to become effective at different times.

Article 2, Section 19, provides:

'The legislature shall prescribe the time when its acts shall be in force, and shall provide for the speedy publication of the same: * * *.'

This court first considered the matter in Com'rs of Cherokee County v. Chew, 44 Kan. 162, 24 P. 62. It is stated:

'* * * The plaintiff in error contends that the act of 1887, chapter 159 of the laws of that year, took effect after its publication in the statute book, and was in force, or became operative, as to the offices named therein, upon the expiration of the terms of the respective occupants thereof. If this construction is adopted, the act takes effect in part at one time, and in part at other and different times, and may on that account be obnoxious to the constitutional provision above quoted, which requires the legislature to fix a time when its enactments shall take effect and be in force. If another construction can be placed upon section 8 of the Laws of 1887, above quoted, which frees it from any objection under the constitutional provision, and such construction is equally consistent with the language of said section 8, and with the intention of the legislature in enacting the law of which section 8 is a part, such construction should be adopted. If we construe the words, 'and after the present term of the officers hereinbefore named shall have expired,' to mean after the terms of all the officers named shall have expired, the act not only takes effect but becomes operative in all its parts, and upon all the offices therein named at the same time, and is thus freed from the objection that it takes effect piecemeal, and also, as we think, from the objection that the legislature in its passage did not fix a time when the act should take effect and be in force. * * *' (44 Kan. p. 164, 24 P. p. 63.)

In Com'rs of Miami County v. Hine 54 Kan. 334, 38 P. 286, it is again stated:

'The constitutional limitation referred to provides that 'the legislature shall prescribe the time when its acts shall be in force.' This provision plainly requires that the legislature shall fix a single, definite time, when is act, as an entirety, shall become a law. According to the practice and legislative course in this state, the last section of every act fixes a definite time when the act, as a whole, shall go into effect. It is sometimes by publication in a newspaper, in the statute book, or at some fixed time after a publication has been made. It was not intended that one section or provision of an act should become a...