This is a suit by George Devine, the beneficiary of a life insurance policy issued to Lottie Harris, deceased, by the National Life Accident Insurance Company of Nashville, Tenn., in which the full amount of the death benefit, $207, is claimed. The policy was issued October 3, 1927, and lapsed for nonpayment of premiums on December 19, 1932. Lottie Harris died August 5, 1935. It is admitted that at the time the policy lapsed it had a net cash or reserve value of $10.82, which plaintiff contends must, under the provisions of Act No. 193 of 1906, be applied to the purchase of extended insurance for the full amount for a limited period, whereas the defendant contends that Act No. 57 of 1932 is applicable, and that, according to its terms, the cash or reserve value may be applied to the purchase or paid-up insurance for life, which would amount to $24.
The sole issue is whether Act No. 193 of 1906, or Act No. 57 of 1932, applies. It is conceded that if the earlier act controls, the cash reserve is more than sufficient to carry the policy beyond the date of the death of the insured, and that if the later act applies, $24 is the proper amount of paid-up insurance. The policy having been issued in 1927, it is conceded that at the time of its issuance it was controlled by the act of 1906. It is said, however, *Page 523 that since the policy did not lapse until December, 1932, and the insured did not die until August, 1935, the later statute is applicable. Act No. 193 of 1906 provides, in section 2, that "no policy of life or endowment insurance (other than a term policy for twenty years or less) issued by any legal reserve life insurance company on or after January first, nineteen hundred and seven, after being in force three full years shall by its terms lapse or become forfeited by the non-payment of any premium. * * * The reserve on such policy computed according to the standard adopted by said company, * * * shall upon demand with surrender of the policy be applied as a surrender value as agreed upon in the policy, provided that if no other option expressed in the policy be availed of by the owner thereof, the same without any further act on the part of the owner of the policy, shall be applied to continue the insurance in force at its full amount including any outstanding dividend additions * * * so long as such surrender value will purchase non-participating temporary insurance at net single premium rates by the standard adopted by the company, at the age of the insured at the time of lapse or forfeiture * * * and provided further that any attempted waiver of the provisions of this paragraph in any application, policy or otherwise, shall be void."
Act No. 57 of 1932, which was an act "to amend and re-enact section 2 of Act 193 of 1906," declares "That no policy of life or endowment insurance (other than a term policy for twenty years or less) issued by any legal reserve life insurance company on or after January first, nineteen hundred and seven, after being in force three full years shall by its terms lapse or become forfeited by the non-payment of any premium. * * * The reserve on such policy computed according to the standard adopted by said company, * * * shall upon demand with surrender of the policy, be applied as a surrender value as agreed upon in the policy; provided that, if no other option expressed in the policy be availed of by the owner thereof, the same, without any further act on the part of the owner of the policy, shall be appliedeither to purchase upon the same life, at the attained age,paid-up insurance, payable at the same time, and under the sameconditions, except as to the payment of premiums, as the originalpolicy, or to continue the insurance inforce at its full amount, including any outstanding dividend additions, * * * so long as such surrender value will purchase non-participating temporary insurance at net single premium rates by the standard adopted by the company, at the age of the insured at the time of lapse or forfeiture; * * * and provided, further, that any attempted waiver of the provisions of this paragraph in any application, policy or otherwise, shall be void." (Italics ours)
Under the prior act the insurance company had no option, and the reserve had to be applied to the purchase of extended insurance at the full face value, whereas, under the subsequent act, the insurance company might apply the reserve to either paid-up or extended insurance. It will be observed that there is repeated in the amendatory act the language of the original act, which provided "that no policy * * * issued * * * on or after January first, Nineteen Hundred and seven, after being in force three full years shall by its terms lapse," etc. Counsel for plaintiff contends that the reference to January 1, 1907, as the effective date, was an inadvertence superinduced perhaps by reason of article 3, § 17 of the Constitution of Louisiana, which provides: "No law shall be revived or amended by reference to its title, but in such cases the act revived, or section as amended, shall be reenacted and published at length."
On the other hand, opposing counsel contends that this phraseology was purposely included in the amendatory act and evidences an intention to make the new act retroactive and argues that there is no valid objection upon constitutional grounds as impairing the obligation of a contract because the subject-matter is one involving the public policy of the state. On this point plaintiff counters with the statement that only public, social, or emergency legislation, or the exercise of the police power of a state, can properly affect the obligation of contracts lawfully entered into.
Is the act of 1932 intentionally retroactive? The rule is that a statute should have only prospective effect, unless its language compels a different conclusion.
"A law can prescribe only for the future; it can have no retrospective operation, nor can it impair the obligation of contracts." Article 8, Rev.Civ.Code. *Page 524
"Acquired rights and existing compacts cannot be affected by subsequent legislation." State v. Bermudez, 12 La. 352.
"A law will not be given a retroactive operation, unless the intention that it should so operate is so clearly expressed that no other construction is possible. * * * State ex rel. Knollman v. King, 109 La. 799, 33 So. 776." 4 La.Digest, Verbo "Laws," § 103.
In our opinion the presence of the words in the amendatory act of 1932 relative to its effective date is very clearly an error. It was probably due to the fact that the former act of 1906, with exception of the portion to be amended, was copied in extenso by the framers of the new act. The act of 1906 provided that where the insured failed to make a choice as between extended insurance and a paidup policy, the accumulated reserve on a lapsed policy must be applied to the purchase of extended life insurance, and the sole purpose of the amendatory statute was to permit the insurer to apply the reserve to either the one or the other. To say that the act is purposely retroactive would result in a manifest absurdity. In the first place, if the Legislature had intended to affect policies issued prior to its passage, it could very easily have said so. Moreover, the statute is couched in the future tense. Act No. 193 of 1906 had been in existence for twenty-six years when the amendatory act of 1932 was passed, and all policies which had been issued in conformity with the first act had been subject to its provisions during that period. Many of them had doubtless been settled long before the enactment of the later statute. It is inconceivable that the Legislature intended, by the adoption of the act of 1932, to declare that policies which had lapsed, or which perhaps had been settled for on the basis of the former act during the period of twenty-six years prior thereto, should be governed by its provisions. Statutes must be given a reasonable interpretation. While it is true that courts have no concern with the wisdom or policy of a statute, their function being confined to its interpretation, it is also true that "occasions may now and then arise when, from the necessity to make particular statutes intelligible and operative, courts will correct or ignore obvious inadvertences therein." Shreveport v. Southwestern Gas Elec. Co.,140 La. 1078, 74 So. 559.
In Corpus Juris, vol. 59, Verbo "Statutes," p. 992, we find the following: "While, as a general rule, every word in a statute is to be given force and effect, words inadvertently used, words to which no meaning at all can be attached, or words having no meaning in harmony with the legislative intent as collected from the entire act, will be treated as surplusage, and will be wholly disregarded in the construction of the act in order to effectuate the legislative intent; * * *."
Reading the two statutes together as laws in pari materiæ, it is clear that the only purpose of the later statute and its only intention was to change the provision in the earlier act concerning the application of accumulated reserves on lapsed policies in which no option had been exercised by the insured.
In Watson v. Metropolitan Ins. Co., 183 La. 25, 162 So. 790, decided on Feb. 4, 1935, Act No. 193 of 1906 was interpreted and applied to a policy issued April 28, 1924, which lapsed on November 14, 1932. The act of 1932 is not discussed in the Watson Case, but, apparently considered, for in the opinion of the Court of Appeal in that case (156 So. 29, 33), from which court the case was ordered up for review by the Supreme Court, we find the following:
"Nor are we in any way shaken in our view by a consideration of Act No. 57 of 1932, which is amendatory of Act No. 193 of 1906.
"The later act, which, it is conceded, has no direct bearing here."
But, if the Watson Case may not be considered as authority for the proposition presently under discussion, it is certainly not authority to the contrary. Act No. 57 of 1932 went into effect August 5, 1932, or twenty days after the adjournment of the Legislature of that year. Article 3, § 27 of the Constitution of 1921. Therefore, when the policy before us lapsed on December 19, 1932, it did not and could not affect the policy which was issued October 3, 1927, which is controlled by Act No. 193 of 1906. This was at least inferentially held in the Watson Case, supra, and is otherwise supported by authority. For instance, it was said in Gillespie et al. v. Cammack et al., 3 La.Ann. 248, 249, at page 251: "The right therefore to ten per cent. damages, if the bill should be returned protested, being conferred by the statute, must be considered *Page 525 as part of and embodied in the contract, and the subsequent statute must not be construed to operate retrospectively so as to take away a vested right."
In Town v. Morgan's Syndics, 2 La. 112, 20 Am.Dec. 299, it was held: "In conditional obligations, the law at the time the obligation was contracted, not that in force when the condition takes place, must govern the rights of the parties."
And we find the following in Central Glass Co. v. Niagara Fire Ins. Co., 131 La. 513, at page 517, 59 So. 972, 974: "To allow the Legislature to change the contract in such features as these, existing solely by the will of the parties, and operating without need of any recourse to the judicial tribunals, would be to allow the Legislature to change or impair the contract of the parties. Even when such conditions and stipulations have come into the contract, not by express agreement, but merely as an effect of the existing law being read into the contract, they are beyond legislative control if they have become integral parts of the contract."
We conclude, therefore, that the act of 1932 can be given no retroactive effect.
The alleged unconstitutionality of the act of 1932 as being repugnant to the constitutional provision concerning the impairment of the obligations of contracts need not be considered for the reason that we have held that the act was not intended to be and is not retroactive.
For the reasons assigned, the judgment appealed from is affirmed.
Affirmed.