State ex rel. Highsmith v. Brown Service Funeral Co.

• Decision Date: 09 June 1938
• Docket Number: 6 Div. 293.
• Citation: 236 Ala. 249,182 So. 18
• Parties: STATE EX REL. HIGHSMITH v. BROWN SERVICE FUNERAL CO.
• Court: Alabama Supreme Court

182 So. 18

236 Ala. 249

STATE EX REL. HIGHSMITH v. BROWN SERVICE FUNERAL CO.

6 Div. 293.

Supreme Court of Alabama

June 9, 1938

Appeal from Circuit Court, Jefferson County; J. Russell McElroy Judge.

Action in the nature of quo warranto by the State, on the relation of J. H. Highsmith, against the Brown Service Funeral Company. From a judgment sustaining a demurrer to the petition and dismissing it, petitioner appeals.

Affirmed.

Erle Pettus and Thos. E. Skinner, both of Birmingham, for appellant.

Lange Simpson & Brantley and Coleman D. Shepherd, all of Birmingham, for appellee.

FOSTER Justice.

This is a quo warranto proceeding instituted upon the relation of J H. Highsmith in the name of the State to test the right of appellee, a domestic corporation, to exercise the franchise rights supposed to be granted by an Act of the Legislature, entitled "An Act To further define, regulate and license mutual aid, benefit or industrial companies or associations," approved June 10, 1935. Acts 1935, page 165. Security for costs was given as required by section 9930, Code.

Appellee claims that relator shows no interest in the controversy, and that one without interest cannot attack an act of the Legislature because it is unconstitutional, which is the attack here made.

That general principle is certainly correct, but it does not apply when the statute expressly confers the right as by section 9930, Code, to the extent that it is not merely to conserve the private rights of some one not complaining. It is not so applied as to refuse quo warranto for this purpose in State ex rel. Crumpton v. Montgomery, Excise Com'r, 177 Ala. 212, 59 So. 294.

We do not think the remedy provided by section 8344, Code, is exclusive of that of quo warranto. Fisher v. Bankers' Fire & Marine Ins. Co., 229 Ala. 173, 155 So. 538.

We see no reason why the merits of the question sought to be settled should not be considered and determined as fully argued by both parties, except as we will hereafter refer to a limitation upon the inquiry. The petition shows that the plan of business by respondent is what should be termed industrial insurance within the Act of 1935, and as ordinarily defined. 31 Corpus Juris 966.

Respondent claims that, though the petition does not state just what law governed its incorporation, the provisions of Article 10 of chapter 274, and beginning with section 7047, Code, and Article 5, chapter 306, beginning with section 8396, have application, because they provide for the incorporation and charter powers and obligations of industrial as well as mutual aid and benefit companies.

Section 8347, Code, has certain requirements as to reserves applicable generally to life insurance companies, and different from section 7061, Code, applicable to reserves for mutual aid, benefit and industrial companies.

The Act of 1935, supra, virtually rewrites Article 5 of chapter 306, in which is section 8396, and makes it include more specifically burial as a form of insurance there regulated such as respondent writes. All laws in conflict are to that extent repealed. Section 6 of the Act relates to the reserves required to be kept by such company. It is this feature of the Act now under attack. As to policies written after its enactment, the reserves are to be computed as in section 8347, Code. As to policies written before its enactment, the computation is on a different basis extending over a period of ten years.

The contention is made by appellant that it therefore changes the computation provided by section 8347, Code, applicable to policies then in existence. That the title does not indicate such a purpose, and that section 45, Constitution, is violated, and that it deprives the policy-holders theretofore issued of the benefits of section 8347, Code.

The question in both aspects may be largely treated with one discussion in view of the opinion we have reached as to its merits. We assume as true many of the propositions stated in briefs as well supported, but do not think they are controlling in the light of the result here reached. In the first place, we do not think that both sections 7061 and 8347, Code, were intended to have joint operation in their requirements as to the reserves to be kept by industrial companies. The former has particular reference to such companies, while the latter applies to life insurance generally. True, industrial insurance is a form of life insurance, but it is distinctive in character and is classed in the Code with mutual aid and benefit insurance, though it has features distinctive from them as well as from ordinary and other old line insurance.

Under well settled rules of construction, those statutes which prescribe specifically for such forms of insurance may be held to apply to the exclusion of those which apply to life insurance generally. Section 7061, Code, makes the computation for reserves on a basis entirely different and probably less onerous than section 8347, Code. It is not probably to be assumed that the Legislature intended for industrial insurance companies, though they are life insurance in one form, to maintain reserves according to the requirements of both sections, thereby increasing the burden of such companies over that of other life insurance. If only one should be given effect, it is appropriate to hold that it should be section 7061.

There is no allegation that this company has been required by the insurance department or has voluntarily computed and set up reserves on the basis of one or the other or both sections. Petitioner is content to stand on the assumption that section 8347, Code, applies, and therefore that reserves have been or are due to have been set up as there provided, with no allegation in that respect.

Based upon that assumption, appellant argues that the Act of 1935 changes the basis for reserves as to policies then existing so that the amount applicable to them will for ten years be less beneficial than as provided in section 8347, Code, though more beneficial than that provided in section 7061. Upon the further assumption then that the reserves thus required to be set up add a distinctive value to such policies on the basis of which the table set out in them fixing paid up insurance is predicated, and that the Act of 1935, supra, reduces the amount thereafter required as to them, thereby reducing their value, appellant argues that if the Legislature has such right, it cannot enact retroactive legislation to that extent without an indication to that effect in the title.

If the Act is thus defective in a failure in this respect to comply with section 45, Constitution, and if the elimination of its retroactive effect had the result of destroying the Act in its entirety, petitioner probably has the right in this quo warranto proceeding to test the corporate rights of defendant attempted to be conferred by the Act as a whole. But if the Act only looks to the future in its operation and does not impair any existing right, it cannot be said to be retroactive so as to be necessary to declare it so in the title.

So we meet the question of whether existing policy-holders of industrial companies issued prior to the Act of 1935 are injuriously affected by it. If such Act merely adds to a status then existing, it is not retroactive. If section 7061, and not 8347, Code, fixes the right to require reserves, the existing policy-holders merely have thereby benefits more advantageous than required theretofore. The Act then would only look to the future in making its requirements for future operation, and to the past only for information on which a computation is to be made to ascertain an amount to be effective for such future operation.

A law is not retroactive merely because it looks to the...