The Bank Savings Life Insurance Company v. Baker
Decision Date | 10 April 1926 |
Docket Number | 26,876 |
Citation | 244 P. 862,120 Kan. 756 |
Parties | THE BANK SAVINGS LIFE INSURANCE COMPANY, Plaintiff, v. W. R. BAKER, Superintendent of Insurance, Defendant |
Court | Kansas Supreme Court |
Decided January, 1926.
Original proceeding in mandamus.
Judgment rendered.
SYLLABUS BY THE COURT.
LIFE INSURANCE--Forfeiture of Policy--Notice--Operation of Statute. Chapter 184 of the Laws of 1925 operates prospectively, and has no effect on policy contracts of insurance previously issued.
E. R. Sloan, of Holton, for the plaintiff; Robert Stone, George T. McDermott, Robert L. Webb, Beryl R. Johnson, all of Topeka, and Frederic G. Dunham, of New York, N. Y., of counsel.
J. Earl Farrish, of Topeka, for the defendant.
OPINION
This is an action in mandamus and under the declaratory judgment act. The point in controversy is whether the amended law relating to notice of forfeiture of life insurance policies applies to policies issued prior to its passage. The statute was originally enacted in 1913 (ch. 212), was amended in a particular not here important in 1923 (R. S. 40-332, 40-333), and substantially amended by chapter 184 of the Laws of 1925. As here printed the words in brackets were in the statute of 1913; those in italics were not. The amended statute omitted the words in brackets but includes those in italics.
The two material changes made by the amending statute of 1925, here in controversy, are (1) to prohibit an insurance company from forfeiting or canceling a policy for nonpayment of premium within six months after default in such payment, without giving the notice required by the statute, while the 1913 statute required notice in all cases; and (2) providing, as to policies having a thirty-day grace period, that the notice may be given not more than thirty days before the premium-paying date, while the 1913 statute made no distinction as to policies having grace periods. Generally speaking, the plaintiff contends that these provisions of the amended statute of 1925 apply to all life insurance policies issued since the 1913 law went into effect; while the defendant contends that they apply only to policies issued after the 1925 statute went into effect.
Ordinarily statutes are designed to apply prospectively rather than retrospectively. They may, of course, be remedial in their nature, designed to apply to and remedy existing conditions. They are not construed as applying retrospectively unless such is clearly the legislative intent. When such construction will disturb vested rights, or impair the obligations of existing contracts, it will not be given unless the wording of the statute makes such construction imperative.
This court, in construing the statute of 1913, held that it had no retrospective operation, and did not apply to policies issued prior to its enactment. (Lightner v. Insurance Co., 97 Kan. 97, 154 P. 227; Priest v. Life Association, 99 Kan. 295, 161 P. 631.) In both cases the question was carefully considered. No good reason appears why the same rule should not apply to the statute of 1925. In both cases it was said in substance that the statute makes a radical change in the contract, between policies previously issued and those issued under the statute, a change materially affecting the rights and obligations of the parties. In Reynolds v. Insurance Co., 105 Kan. 669, 675, 178 P. 605, it was said: "The statute requiring the giving of the written notice was a part of the policy." In Cunningham v. Insurance Co., 106 Kan. 631, 189 P. 158, it was said:
(p. 633.)
Therefore, from our previous decisions construing the statute of 1913 in question it is clear that as to life insurance policies issued while that statute was in force the terms of the statute should be read into the policy as a part of the contract between the parties the same as though it were actually written therein (as the record here shows it is actually written into the policies of some insurance companies), and that the statute contains provisions materially affecting the rights and obligations of the parties. This holding is in accordance with the general rule that a statute pertaining to the rights, liabilities or obligations of parties under an insurance contract are construed as a part of a policy issued when the statute is in force.
In 32 C. J. 1162 the rule is thus stated:
"A statute applicable to a contract of insurance and in force at the time of the making of the contract enters into and forms a part thereof in the same manner as if it had actually been written or copied therein, and, in construing the terms of the policy, the statute is to be read in connection therewith, notwithstanding a subsequent amendment or repeal of the statute."
See, also, Southland Life Ins. Co. v. Hopkins, 219 S.W. 254 (Tex. Civ. App.); E. O. Barnett Bros. v. Western Assur. Co., 143 Ark. 358, 220 S.W. 465; Insurance Co. v. Lumber Co., 118 Miss. 740, 80 So. 9; Camden Wholesale Grocery v. Natl. F. I. Co., 106 S.C. 467, 91 S.E. 732; Commercial Union Assur. Co. v. Schumaker, 71 Ind.App. 526, 119 N.E. 532 (Ind. App.); Union Mut. Ins. Co. v. Huntsberry, 57 Okla. 89, 156 P. 327; McKinney v. Insurance Co., 270 Mo. 305, 193 S.W. 564; Prudential Insurance Co. v. Ragen, 184 Ky. 359, 212 S.W. 123; Cranston v. California Ins. Co., 94 Ore. 369, 185 P. 292; Cole v. Jefferson Standard Life Ins. Co., 113 S.C. 22, 100 S.E. 893; Ross v. Capitol Life Insurance Co., 205 Mo.App. 243, 228 S.W. 889; Lindemann v. Insurance Co., 217 Mich. 698, 187 N.W. 331; Pasherstnik v. Continental Ins. Co., 67 Mont. 19, 214 P. 603; State, ex rel. Business Men's Assurance Co., v. Allen, 302 Mo. 525, 259 S.W. 77; Jarman v. Knights Templars' & Masons' Life Indemnity Co., 95 F. 70, 104 F. 638, 187 U.S. 197.
This list is not intended to be complete, but to indicate the variety of statutes considered, and how thoroughly this principle is imbedded in the law.
It is also the rule when a policy of insurance is issued and a contract of insurance made, and there is in force a statute which, in legal contemplation, enters into and becomes a part of the contract, and which materially affects the rights and obligations of the contracting parties, such rights and obligations are not affected by the amendment or repeal of the statute. (See Jarman v. Knights Templars' & Masons' Life Indemnity Co., supra.) In Hanover Fire Ins. Co. v. Dallavo, 274 F. 258, it was held:
"A statute prescribing the scope and effect of contracts of insurance and the duties and obligations of the parties is as much a part of contracts, written while it is in force, as though incorporated into them, and such contracts are not affected by its repeal."
In Christensen v. Insurance Co., 160 Mo.App. 486, 141 S.W. 6, it was held that section 7897 of the Revised Statutes of 1899, providing...
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