Opinion
No. 32488.
April 5, 1937.
CONSTITUTIONAL LAW. Insurance.
Code amendment of statute, declaring rents arising from demise of land by life tenant apportionable, by adding words "and a like apportionment shall be made in the case of annuities" held not violative of constitutional guaranties of due process and equal protection of law in application to annuities arising under disability provisions of life policies as requiring apportionment notwithstanding express contract to contrary, where disability provisions contained no express stipulation that benefits should be apportionable (Code 1930, sec. 2179; Const. U.S. Amend. 14).
APPEAL from circuit court of LeFlore county. HON. S.F. DAVIS, Judge.
Watkins Eager, of Jackson, for appellant.
The provisions of the life insurance policy for the payment of a stated sum at regular intervals and for the waiver of premiums due under said policy during the lifetime and continued disability of the insured does not constitute an annuity.
New York Life Ins. Co. v. Majet, 173 Miss. 870, 161 So. 156; Universal Life Ins. Co. v. State ex rel. Mill, 153 Miss. 358, 121 So. 849; Commonwealth v. Metropolitan Life Ins. Co., 98 A. 1072; People ex rel. Metropolitan Life Ins. Co. v. Knapp, 184 N YS. 345; In re National Provincial Life Assurance Society, L.R. 9 Eq. 306; Carroll v. Equitable Life Assurance Society of U.S., 9 F. Supp. 223; Curtis v. New York Life Ins. Co., 104 N.E. 553.
The identical contract now before the court has been held to be an indemnity contract and not an annuity.
Chattanooga Sewer Pipe Works v. Dumler, 153 Miss. 276, 120 So. 450, 62 A.L.R. 999; Brownstein v. New York Life Ins. Co., 148 A. 273; New York Life Ins. Co. v. Dumler, 149 Miss. 361, 115 So. 43; New York Life Ins. Co. v. Alexander, 122 Miss. 813, 85 So. 93; Peek v. New York Life Ins. Co., 219 N.W. 487; 1 R.C.L. 118 sec. 3.
Before there can be an apportionment of a right, such right must be vested; no right vested in the insured unless he lived and remained disabled for a full year.
Peek v. New York Life Ins. Co., 219 N.W. 487; Langevin v. Prudential Ins. Co., 171 A. 392; 2 Couch Encyc. of Insurance Law, sec. 354; New York Life Ins. Co. v. English, 72 S.W. 58; Howard v. Benefit Assn. of Railway Employees, 39 S.W.2d 657; Woods v. Provident Life Ins. Co. of Chattanooga, 42 S.W.2d 499; Farlen v. Fidelity Casualty Co., 192 N.Y.S. 513; Atlantic Life Ins. Co. v. Serio, 171 Miss. 726, 157 So. 474; New York Life Ins. Co. v. Dumler, 149 Miss. 361, 115 So. 43; Henry v. Henderson, 81 Miss. 752; Stover's Appeal, 77 Pa. 282.
Even if the contract here involved creates an annuity, which is denied, still section 2179, Mississippi 1930 Code, does not require an apportionment thereof contrary to the intent of the contracting parties where it is otherwise provided in the instrument creating the annuity.
Hemenway v. Hemenway, 50 N.E. 456; Mutual Life Ins. Co. v. Hill, 193 U.S. 551, 48 L.Ed. 788; Carter v. Cox, 44 Miss. 148.
The provision, "and a like apportionment shall be made in the case of annuities," at the conclusion of section 2179, Code of 1930, applies only to annuities arising from demised land.
Section 2179, Code of 1930; Greenville Ice Coal Co. v. City of Greenville, 69 Miss. 86, 10 So. 574; Leinkauff v. Barnes, 66 Miss. 207, 5 So. 402; Anderson v. City of Hattiesburg, 131 Miss. 216, 94 So. 163; Henry v. Henderson, 81 Miss. 752; Hamner v. Yazoo Delta Lbr. Co., 100 Miss. 349, 56 So. 466; State v. Traylor, 100 Miss. 544, 56 So. 521; Potter v. Fidelity Deposit Co. of Maryland, 101 Miss. 823, 58 So. 713; Jones v. Jones, 72 F.2d 829; White v. Hopkins, 51 F.2d 159; Fulton v. Schuky, 191 N.E. 3.
The statute as construed violates the Fourteenth Amendment to the Constitution of the United States in that the same deprives the appellant of its property without due process of law and denies to it the equal protection of the law.
Adkins v. Children's Hospital of the Dist. of Columbia, 261 U.S. 525, 67 L.Ed. 785, 24 A.L.R. 1238; Fidelity Deposit Co. of Maryland v. Tafoya, 70 L.Ed. 664; Nebbia v. New York, 78 L.Ed. 940; Mayflower Farms v. Ten Eyck, 80 L.Ed. 475.
H. Talbot Odom, of Greenwood, for appellee.
Under the doctrine of stare decisis this case should be affirmed.
The insurance policies and the parties involved on this appeal are identical with the policy considered by the court in the case of New York Life Insurance Company v. Majet, 173 Miss. 870, 161 So. 156, decided by Division A of our court through Justice Cook on April 29, 1935. Not only are the policies identical, but the parties and their attorneys are the same. The same issues are raised with the exception that it is now claimed that the construction given section 2179 of the Code of 1930 requiring all annuities to be apportioned renders the statute repugnant to the due process and equal protection clauses of the Federal Constitution.
15 C.J. 916-919; Zama v. Separate School District, 120 Miss. 444, 82 So. 313; Maris v. Lindsey, 124 Miss. 142, 87 So. 12; Knox v. Wyoming Mfg. Co., 138 Miss. 249, 103 So. 11; White v. Williams, 159 Miss. 732, 132 So. 573, 76 A.L.R. 757.
Counsel argue that our Legislature has recognized the distinction between an annuity and disability benefits. They then quote from section 5274 which enumerates the kinds of insurance authorized. This same argument was made by appellant's counsel on the other Majet case in their suggestion of error. And in their present brief, as in their suggestion of error, their argument as to the above statute was followed by a quotation from the case of Universal Life Ins. Co. v. State ex rel. Miller, 153 Miss. 358, 121 So. 849.
Not a single new case is cited on this proposition. It, therefore, would seem idle on our part to attempt a further discussion of these authorities as we did in the other Majet case, since the court has specifically rejected these cases as having no application on the question of whether or not the disability benefits under the policies in question amounted to an annuity.
3 C.J. 200-201.
The term annuity has been variously defined, but the definitions, although differing in form, are substantially alike in meaning. In general terms, it is a yearly payment of a certain sum of money granted to another in fee for life or for years, and charging the person of the grantor only.
2 R.C.L. 2; 1 Standard Encyc. of Procedure, pages 987-8; 1 Bacon's Abridgment, page 268.
An annuity is a yearly payment of a certain sum of money granted to a person for life, or years, or in fee chargeable upon the person of the grantor.
Wharton's Law Dictionary, 43; 2 Am. Eng. Encyc. of Law, page 387; 2 R.C.L. 5; Ballentine Law Dictionary, page 84; Bouvier's Law Dictionary, page 73; Chattanooga Sewer Pipe Works v. Dumler, 153 Miss. 276, 120 So. 450; Peek v. New York Life Ins. Co., 219 N.W. 487.
Contracts of insurance are presumed to have been made with reference to the law of the land, including the statutory laws which are in force and are applicable, and such laws enter into and form a part of the contract, as much as if actually incorporated therein. And this rule applies as well to certificates in mutual benefit societies, associations, and the like.
1 Couch on Insurance, sec. 150; Peek v. N.Y. Life Ins. Co., 219 N.W. 487; Assurance Co. v. Phelps, 77 Miss. 625, 27 So. 745; Bacot v. Phoenix Ins. Co., 96 Miss. 223, 50 So. 729.
The next contention of the appellant is that even though the contract does create an annuity, that section 2179 of the Code of 1930, does not require an apportionment where otherwise provided in the contract. In answer to this contention we say first that, regardless of the wording of the contract, section 2179 above mentioned is written into the contract and must prevail in case of a conflict between the statute and the contract itself.
1 Couch on Insurance, sec. 155.
We are rather surprised that counsel should contend at this time that the Legislature did not intend to make all annuities apportionable, because the logic of the court in the Majet case, supra, on this point is unanswerable.
Under the 4th division of counsel's brief they now contend that the amendment to section 2179 making all annuities apportionable only applies to annuities arising out of demised lands. They made the identical point in their original brief in the Majet case, supra, stating that the amendment was only intended "to change the common law rule in regard to an annuity in favor of the beneficiary of a will arising out of demised lands." They stated further, "The Legislature did not attempt to change the common law rule in regard to various other types of annuities."
The first and cardinal rule of statutory construction is to determine the intention of the Legislature. This is so elemental as to need no citation of authority. Since then, the intention of the Legislature having been determined in the Majet case, supra, and expressly approved by counsel in their suggestion of error as aforesaid, the many authorities cited and argued by counsel in Division IV of this present brief on statutory construction have no application and do not require further consideration.
It is lastly contended that section 2179 of the Code of 1930, as construed by this court violates the due process and equal protection clauses of the Constitution of the United States. This contention is without merit, and the cases cited are not in point.
When the policies in question were issued the statute now attacked as unconstitutional had been in force for more than fifteen years.
In the case of Hardware Dealers Mutual Fire Ins. Co. v. Glidden Co., 284 U.S. 151, 76 L.Ed. 214, the Supreme Court held that there was no violation of the due process clause of the 14th Amendment by state statute requiring a provision in fire insurance policies for fixing the loss by arbitration.
Jacobson v. Massachusetts, 197 U.S. 25, 49 L.Ed. 643.
Our own court in the case of State v. Senatobia, etc., Stationery Co., 115 Miss. 254, 76 So. 258, in upholding Mississippi Laws 1916, chap. 135, sec. 3, which prohibited the letting of contracts to furnish stationery to nonresidents, quoted with approval from Atkins v. Kansas, 191 U.S. 207, 48 L.Ed. 148, upholding the eight-hour labor law of Kansas.
Again, our court in General Accident Fire Life Assurance Co. v. Walker, 99 Miss. 404, 55 So. 51, upheld section 2575 of the Code of 1906, prohibiting policy regulations limiting the period for commencing suit under the policy to less than one year.
In the case of United States Fidelity Guaranty Co. v. Parsons, 147 Miss. 435, 112 So. 469, this court held that section 3 of chapter 128 of the Mississippi Laws of 1918, providing that when a contractor entering into a building contract shall enter into bond with the owner it shall inure to the benefit of laborers and materialmen, does not unduly abridge liberty of contract, in contravention of the Fourteenth Amendment to the Federal Constitution, but is within the police power.
The valued policy law, section 2592, Code of 1906, section 5056, Hemingway's Code, now section 5183 of the Code of 1930, was held not violative of the due process and equal protection clauses of the Federal Constitution by our court in the case of Mississippi Fire Ins. Co. v. Planters Bank of Tunica, 138 Miss. 275, 103 So. 84.
States are not prohibited by the Federal Constitution from supervising insurance companies by statutory regulation.
1 Couch on Insurance, sec. 244.
Argued orally by Tom Watkins, and W.H. Watkins, Sr., for appellant, and by H. Talbot Odom, for appellee.
On April 7, 1920, the appellant, New York Life Insurance Company, issued three separate life insurance policies on the life of William N. Majet, which were identical in amounts, terms and provisions. Thereafter the insured became totally and permanently disabled within the meaning of these policies, and the appellant recognized this disability by waiving the premiums on these policies, and paying the insured the disability benefits provided therein on each anniversary date of the policies, including the one next preceding the insured's death. The insured died on March 23, 1934, six days before the anniversary date of the policy, which was March 29th, and the appellant refused to pay the proportionate part of the disability benefits accrued to the date of the insured's death, for the reason, as contended by it, that such benefits were not due and payable either in whole or in part unless the insured was living and disabled on an anniversary of the policy.
Thereafter, Mary T. Majet, administratrix of the estate of the said William N. Majet, deceased, filed suit on one of the policies to recover the proportionate part of the annual disability benefit which had accrued prior to the death of the said William N. Majet, and recovered a judgment therefor in the court below, which was affirmed by this court in an opinion which is reported in 173 Miss. 870, 161 So. 156, 101 A.L.R. 894. In that opinion it was held (1) that the provisions of a life insurance policy for the payment of a stated sum on each anniversary date to the insured during his lifetime and continued disability, after proof of total permanent disability, created a contingent annuity with specific limitation as to its duration, and (2) that under the provisions of section 2179, Code of 1930, declaring that there shall be a like apportionment in the case of annuities, a proportionate part of the disability benefit provided by the policy was recoverable.
After the suit referred to above was finally concluded, the said administratrix filed separate suits on the two other above mentioned policies on the life of William N. Majet, seeking to recover a proportionate part of the disability benefits provided therein. These suits were consolidated and resulted in a judgment for the administratrix, from which the present appeal is prosecuted.
On this appeal it is contended (1) that upon the points therein decided the opinion in the case of New York Life Insurance Company v. Majet, supra, is erroneous and should be overruled, and (2) that the construction which we there placed on section 2179, Code of 1930, renders it violative of the Fourteenth Amendment to the Constitution of the United States, in that the same deprives the appellant of its property without due process of law and denies to it the equal protection of the law.
As stated above, the facts and provisions of the policy involved in the case of New York Life Insurance Company v. Majet, supra, are identical with those involved in this appeal, and since they are fully set forth in the former opinion they will not be repeated here. After a careful reconsideration of the questions decided on the former appeal, in the light of the further argument of counsel thereon, we have decided to adhere to the former opinion, and that, of course, will lead to an affirmance of this cause, unless the second contention of appellant, stated above, is sustained.
The argument that the construction we placed upon section 2179, Code of 1930, causes it to violate the Fourteenth Amendment to the Constitution of the United States proceeds upon the theory that it unduly abridges the freedom of contract included within the guaranties of the due process and equal protection clauses of this amendment, the contention being that the construction we have placed upon the statute requires the apportionment of the annuity or benefit created by the contract, although the contract expressly provides that it shall not be apportioned, and that this is an arbitrary and unwarranted interference with the liberty of the contract. When the language of the opinion in New York Life Insurance Company v. Majet, supra, is limited to the provisions of the contract involved in that case, and the case at bar, there is nothing in the opinion that warrants the conclusion that we so construed the statute as to require apportionment when there is an express stipulation in the contract that there shall be no apportionment of the annuity or benefit. By the terms of the contract involved in the former case, and in the case at bar, no such question was presented or decided. The language of the contracts creating the disability benefits involved in these cases, if not merely negative in reference to apportionment, is at least of doubtful meaning in that respect. As evidence of that fact we have the contrary construction placed upon these identical provisions by two state Supreme Courts. In Peek Estate v. New York Life Ins. Co., 206 Iowa, 1237, 219 N.W. 487, the Supreme Court of Iowa held that the disability benefits provided by these provisions of the contract were not apportionable on the insured's death before the policy anniversary, while in Brownstein v. New York Life Ins. Co., 158 Md. 51, 148 A. 273, the Supreme Court of Maryland construed the same provisions as creating an apportionable benefit. Certain it is that in the provisions here involved there is no express stipulation that the benefits therein provided shall not be apportioned. The statute of England, 33-34 Victoria, chapter 35, which changed the common-law rule and made "all rents, annuities, dividends, and other periodical payments in the nature of income" apportionable, expressly provided that the provisions of the act should not extend to any case in which it was or should be expressly stipulated that no apportionment should take place, and it may be, as to which we express no opinion, that the same reservation or limitation may be found in the Fourteenth Amendment to the Constitution of the United States. But we do not think there can be found in the language of the provisions of the policies here under consideration any express stipulation that the benefits created thereby should not be apportioned.
Affirmed.