Theye Y Ajuria v. Pan Am. Life Ins. Co.

• Decision Date: 24 February 1964
• Docket Number: No. 46902,46902
• Citation: 245 La. 755,161 So.2d 70
• Parties: Carlos Manuel THEYE Y AJURIA v. PAN AMERICAN LIFE INSURANCE COMPANY.
• Court: Louisiana Supreme Court

Page 70

161 So.2d 70

245 La. 755

Carlos Manuel THEYE Y AJURIA v. PAN AMERICAN LIFE INSURANCE COMPANY.

No. 46902.

Supreme Court of Louisiana.

Feb. 24, 1964.

Chaffe, McCall, Phillips, Burke, Toler & Hopkins, James G. Burke, Jr., New Orleans, Polk, Foote & Neblett, Lamar Polk, Alexandria, for plaintiff-appellant.

G. Frank Purvis, Jr., Solomon S. Goldman, New Orleans, for defendant-respondent.

FOURNET, Chief Justice.

Carlos Manuel Theye Y Ajuria, a Cuban national now residing in Florida ¹, instituted proceedings in the district court in Orleans Parish against Pan American Life Insurance Company, a Louisiana corporation, to recover the cash surrender value of an insurance policy issued by the defendant on the life of the plaintiff, which under the terms of the contract, had been converted into a fully paid-up policy in June, 1942. He also prayed for penalties and attorneys' fees.

In answer to the plaintiff's petition, the defendant (1) denied the policy was a Louisiana contract and governed by the laws of this state, insisting that the policy was in fact delivered to him by its agent in Cuba whose laws govern the performance thereof; and maintained (2) that even if the original contract had been consummated in Louisiana, its situs had been removed to Cuba by the actions of the parties, the defendant having paid and the plaintiff having received the persistency bonus in 1948 in Cuban pesos, and the plaintiff having made and repaid in pesos three loans on the policy in 1948, 1950, and 1952; and (3) under our 'Act of State' doctrine and certain provisions of the International Monetary Fund, commonly known as the Bretton Woods Agreement, a treaty to which Cuba and the United States are signatories, the laws of Cuba ² passed since the execution of the policy involved herein govern.

Whereupon, the plaintiff filed a motion for a summary judgment on the pleadings, exhibits, interrogatories and defendant's response thereto; the motion was granted and the trial judge awarded the plaintiff the sum of $7,090 as the cash surrender value of the policy. This judgment was reversed by the Court of Appeal, Fourth Circuit, dismissing plaintiff's suit, 154 So.2d 450. The matter is now before us for review on a writ of certiorari granted on the application of the plaintiff.

The record reveals that on May 14, 1928, when plaintiff was thirty-one years of age, he applied for a life insurance policy through the defendant's agent in Havana, to which was attached payment of the first annual premium. In due time the application was received and accepted by the defendant in its home office in New Orleans; the policy was issued on May 22, 1928, and mailed to its said agent in Cuba to be delivered to the plaintiff. All other annual premiums were also paid in United States currency until 1942 when the policy was converted into a paid-up one.

It is stipulated in the policy, a copy of which was attached to the plaintiff's petition, that all premiums are payable in advance at the home office of the defendant and upon presentation of the policy, it would '* * * pay at its Home Office in New Orleans, Louisiana, U.S.A., and upon presentation of due proof of the death * * *' of the insured, the proceeds of the policy to the beneficiary.

The trial judge in his reasons for judgment stated that the obligation under the contract at the time it was issued and at the time it was converted was governed by the laws of the state of Louisiana and the laws and decrees of the Republic of Cuba passed subsequent to these events could have no effect on the obligation that existed previously. In reversing the judgment of the district court, the Court of Appeal was of the opinion that the Bretton Woods Agreement prohibited this country from enforcing contracts which would frustrate exchange control regulations of another member of the Agreement, and that the Cuban law requiring that payments between the insured and the insurer be made in Cuba in pesos was applicable to the policy under consideration, consequently, the plaintiff was not entitled to recover the cash surrender value of the policy from the defendant in any of the United States.

It is the settled jurisprudence of this state, a rule of law universally obtaining, that 'An insurance policy is a contract and the rules established for the construction of written instruments apply to contracts of insurance.' Nyman v. Monteleone-Iberville Garage, 211 La. 375, 30 So.2d 123 and authorities cited therein. And '* * * all the authorities agree that the law of the place of contract--lex loci contractus--as distinguished from the law of the forum, governs. The lex loci contractus, it is said, becomes as much a part of the contract as if specifically incorporated therein; and although the interpretation of the language of a contract of insurance is pre-eminently a question as to the intention of the parties, in the absence of evidence of a contrary intention the parties must be held to have contemplated the application of that law to the terms of their agreement, for the law of the state where a contract of insurance is made is necessarily within the contemplation of the parties and must be looked to in ascertaining the terms by which they agreed to be bound.

'When the question of the place where a contract of insurance was made is solved, the determination of the questions as to the construction to be placed upon the terms of the contract and as to the validity thereof and of the laws which are to govern such construction and validity is comparatively easy because it is an almost universal rule that the contract of insurance must be governed by the law of the state where such contract is finally consummated. * * * ' 29 Am.Jur., Insurance, Secs. 30 and 31.

Under the express provisions of the Revised Civil Code, to be found in Section 5 of Chapter 3 of Title IV, under the heading 'Of the Interpretation of Agreements', it is provided 'That courts are bound to give legal effect to all * * * contracts according to the true intent of all the parties,' and such '* * * intent is to be determined by the words of the contract, when these are clear and explicit and lead to no absurd consequences.' Article 1945. In arriving at the intent of the parties 'All clauses of agreements are interpreted the one by the other, giving to each the sense that results from the entire act.' Article 1955. It is only when a clause is susceptible of two interpretations that it must be understood in the sense in which it may have some effect rather than in a sense that would render it nugatory (Article 1951) and only in doubtful cases that the agreement must be interpreted against the party who contracted the obligation. Article 1957.

A study and analysis of the policy and exhibits contained in the record leave no room for speculation as to the intention of the parties which was stated in clear and unambiguous language; the plaintiff obligated himself to pay all premiums due on the policy at the home office of the defendant, and after the policy was converted into a fully paid-up one, it was the obligation of the defendant company to pay to the plaintiff the cash surrender value thereof upon his surrender of the policy at its office in New Orleans; all transactions were obviously intended to be negotiated in American dollars.

This is the interpretation the defendant itself placed on the contract when it wrote to all of its policyholders in Cuba advising them in part: 'At the time your policy was issued the laws of Cuba permitted the Pan American Life Insurance Company to issue it Payable in United States currency and to receive payment of premiums in Cuba in that currency. The Republic of Cuba has now enacted Law 13 of 1948...