Appendix — Pan-American Life Insurance v. Theye y Ajuria

os .

a

Pat

AYBENDIX ye

| Monday, Feb. ZA, 1964.-

SUPREME COURT OF es,

"No. 46,902.

CARLOS. MANUEL ‘THEYE Y AJURIA

ae e : 2 3

. . : .

PAN AMERICAN LIFE INSURANCE COMPANY.

©

In re: CARLOS MANUEL THEYE Y AJURIA., APPLY.

ING. FOR A WRIT OF CERTIORARI TO THE

COURT OF APPEAL FOR THE FOURTH CIRCUIT.

FOURNET, Chief Justios. nay Mee Sah

‘Carlos Manuél Theye Y ‘Ajuria, a Cuban national

now residing ‘in Florida’. instituted proceedings in the

district court in Orleans Parish against Pan American

Life Insurance Company, a Louisiana corporation, to

recov er 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 con-

verted into a fully paid-up. policy in June, 1942. He aso

‘prayed for penalties and attorapys fees.

8

In answer to the plaintiff's petition, the defendant .

~ a) denied: the policy was a Louisiana contract: and.

governed. by ‘the, laws: of this ,state, insisting that the -

1 Plaintiff had lived in “Cuba until November, 1960, when, he

was forced to flee “after Castro came to. power, ‘because of his:

political beliefs: °

° . ‘ : 14 e e

. policy was in fact delivered to him by its agént in Cuba

Se laws govern the performance thereof; and main-

teled (2) that’ even if the original contract had been

consummated in Louisiana, its situs had been. removed

to Cuba bythe’ a¢tions of the ‘parties, the defendant

having paid and the plaintiff having recevied the* per--

sistency 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 Inter-

national Monetary Fund, commonly known. as the Bret-

ton Woods Agreement, a treaty to which Cuba and the. ~

United States are Signiories,; the laws of Cuba* passed

since the ‘execution of the policy, involved herein govern.

| el 2

Whereupon, the plaintiff filed a motion for a sum:

‘mary judgment onthe pleadings, exhibits, interroga-

‘tories and defehdant’s response thereto;. the motion .

| was granted and the trial. judge awarded the plaintifi

_ 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

* In 1948 fre I Batista government passed Law No.. 13 which. .

provided for the creation of the National Bank: of - Cuba and also

that after 1951 only the Cuban peso& would be recognized as legal

ténder. The Monetary Law.of 1951 required ali contracts payable

‘to or by Cuban nationals be paid in pesos and after Castro's ;

rise to power, on September 29,. 1959, Law 568 was promulgatec,

- prehibiting foreign corporations *doing business in Cuba from

making paymems or crediting the accounts of Cuban nationals

with any sums available to them except in Cuba, without the

express authorization. of the National Bank of Cuba.. In June,

1960, Law Noa. 851 was adopted, providing for the nationaliza-

tion through expropriation of all property in Cuba owned by

United States nationals and pursuant to Resolution. Number 3.

passed October 2G, 1960, defendant's. operations were expropriated

and an administrator appointed by; the Cuban government was

?

» Placed in charge, thereof. . ~~

- ° bd

“ , .

+ and,”

iy

\

So. 3d 480. ‘The. matter is now before us on review |

ona writ of certiorari Sigua on the application of the

_ Plaintitt. a Bae e ~

@# .

‘The record reveajé that on May 14, 192% when plain-.

tiff was thirty-one’ years of age, he applied fora life

insurance policy through the defendant's agent in Ha-’

vana, to which was iittached payment of. ‘the first an-

nual / premiurh, . -In due. time , the application was re-

Pe and. accepted by the defendant in its home of-

fice in ow Orleans;.the. policy was issued on May 22.

. 1928, Sia mailed to its said agent in Cuba to be de-

_livered ‘to the plaintiff. “All other annual premiums

were -1iSO paid’ in United’ States ” currency until 1942 °

when the policy was conv erted ints a paid: up one

It is “upulated ‘othe policy, a oO of which was

‘attacked to the plaintiff's» petition, that all premiums :

are -pay able, in advance at the heme office of Ane: de-

'., fendant and _upon presentation of the policy, it’ would

“s * * pay at its Home Office in New Orleans, Louisiana,

U. S.A. and upon presentation of due proof, of the

déath * * ©) of the insured, ‘the proceeds of the e policy

to the beneficiary.

e =

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 td these events cquld have . no effect on

the obligation) that existed | previously. In reversing

a4

ry.

. ‘ : =?

the judgment of-the district court, the Court of Appeal

waS of the opinion.that the Bretton: Woods Agreement

vrohibited this country frém enforcing contracts Ww hich |

would frustrate exchange control regulations | of san-

ether member of the Agreement, and that‘ the Cuban :

law requiring that payments between .the insured’ and

‘the insurer be mdde in Cuba in pesos was applicabie -

to. the: policy under consider @tian, consequently, the |

plaintiff was not entitled to recover the cash, surrender °.

value of the policy from the defendant in any of the

United States. os oats ne

It is the settled jurisprudence cf: this ‘State, 2 rule

of law universally obtaining, that “An insurance policy

is a contract and the rules establis&ed Aor the cof-

“struction of written instruments apply to contracts of

insurance.” > Nyman “t. Monteleone-Iberrville Garage,

211 La. 375, 36 So. 34 123 and authorities cited th

“And -@* * al the authorities agree that the law of the

place of contract—lex loci contractus—as ‘distinguished

from the lew of the’ forum, governs. ' The lex loci cen-

tractus, it ‘is said, becomes as much a part of the con-

tract as if specifically incorporated therein; axl al-

though: the interpretation ¢ of the ianguage of a contract

of insurance: 1s preeminently” a question as to the in-°

tention of the parties, in the absence. of ‘evidence of a

contrary Sitention the parfies must be held to -have

con templated 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 w ithin the

contemplation of the parties and must.be looked to.in

-ascertaining tle terms? by which they agr@ed to be

bouhds

eas re ‘

‘ { ‘

o . i pees ae

| “When thé question of the plyc@ where a contract of |

©. insurance was made is solved, the. determinatian of :

the questions as to the construction to be: placed upon’

the terms of the contract and as to the validity thereéf

‘and of the. laws whicl/are to gover n “such construction”

rativ ely easy. because it is an

and validity is com

almost universal rule\that the éoniract of insurance

must be governed -by the law of ghe ‘state where such

contract is finally: consummated. * e * 29 Am. Jur..

Insurance, Sec. 30 and 31.

ae i 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 Agree-

ments”, it is provided “That Courts are bound to giv e

begal effect toni -*. * contracts according to the true

intent of all the parties,” and such “*'* * intent’ is io

be determined by the words of the contract, when these .

ip - ure clear and explicit and lead te no: absurd conse- _—

quences: Article 1945. In arriving at the ttent, of the

parties “All clauses ‘of agredmints are interpreted the

: ; . ene by the other, giving té each the sense that results

‘trom the entire act.” Arucie. 1955. ‘It is only when a

clause is ‘susceptible of two ibateretntions that it must

be understood in the’ sense&p which it mey have some

effect rather than -a sense ‘that wou.d render it nuga-

tory | Article 1951), and only in doubtful cases that. the

agreement must’ he interpreted against the party eho

con tracted the obligation, Article 1957.

. ; : ; ea : :

’

A study and analysis of the policy and exhibits:con-

°

AGined in the record leave no room for speculation as

P ae a ee

added. }

to the intention of the parties which was stated in clear

and unambiguous language; the plaintiff obligated him-

self to pay all pretaiums due on ‘the policy at the home

office of. the defendant, and after the policy was con-”

verted into a ‘ful ly 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; alf transactians

‘were obvious!y intended te 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 Ameri

can Life Insurance Company to issue i PAYABLE ne

[! nited States curreney and to reteive payment of pre-

ins in Cuba in that currency. The. Republic of Cuba.

has new enacted Law tor 4848 and under its terms

the Government of that country has issued. DeécTee No.

1348 of 1951 providing that the Cuban Nationalgurrency

shall be the only lega! tender currency in Cubs It is

theretoge impossible for us to continue to accept pay-

ment of U.S. Doilars in Cuba’ and if- yor 4 desire to cen-

“tinue -the phiyment of “your premiums in dollars they

must be paid to the Home Office.in New Orleans, Lou-

isiana, as required’ by your Con Fact,” "(Emphasis

e

We think. therefore, _the ‘trial. judge properly con-

cluded thai the laws and decrees of the Republic of

Cu ba passed subsequent ty the mate the polic’ became

ry &

on

%

* owen.

; ee

the situs thereot had been removed ton

a paid-up policy can have no effect upon the obligation

which existed. at that time. ee ee

The conienusn or the detendant that even) if the

original contract had been consumm ted in Lguisidna

when the

detendant paid and the plaintiff received the persis’

ency bonus -in ‘1946.1n -pesos and the plaintiff received

“star aiel three foans.he’made-on the policy in 1948, 1956

and “1952 and uuquidated them with Cuban pesos, 15

clearly without: merit. There is nothing in these trans-

actions that would indicate that the’ plaintiff in so

acting dither in receiving the bonus cr making the loans

intended to abrogate er) modity his contract witn the

‘defendant Company.’ Moreover, the Company has

failed to indicate any such intention on its part in thy

“manner | required ‘by the contract, which specificalls

provides under the, heading of “CONSTRUCTION, OF

CONTRACT” the policy could neither ‘*:* *‘be changed

nor modified except with the written consent of the

Company signed .by the President, Vice-President,

Secretary or Actuary. * ;

, Counsel's last argument jis that the effect of Arucle

VIII. Sec. 2 (b)* of the Articies ol Agreement of the

International Monétar\ Fund, whick, were formulated

—— ‘ : \\

“Exchange ‘contracts which invaive the currency “of any

member and which are contrary to the exchange cantrol regula-

tions of that membez maintained or Lmpose: { consistentiv with

‘this Agreement shal! be unenferceabla in the verritomes of any

member. In-addition, members may, by mutual accdrd, cooperate

in’ megsures for the purpose o} ‘making thes exchange con-ro!

reguiations af either member more. effective, provided that such

measures and regulations are consistent with this ‘Agreement

Article VIIT. Sec. 2. (b) ‘International Monetary Fund

QO:

20

at the United. Nations Monetary and Financial €on-

ference in Jaly, 1944 at Brétton Woods, New Hamp

shire, ‘signed at Washington, December 27, 1948; ac:

cepted by the Unsted States ‘of, America December 20),

i945, and which became effective December 27, 1945,

is to divest the courts of the United States ‘oft authorits

to enterce the obligations ot the plainuff's contract. .

py ; :

Conceding that Cuba hac adopted the Articles thereo!

as part of its national law as alleged by the defendant,

‘an exhaustive study of the Bretton Woods Agreement,

as well as all authorities relied.on by the detendant :

fails to show’ Ww here the Agreement or any of the cases

are contrelling under “the particular facts of the case

vat bar inasmuch as a contract payable in the State. of .

Louisiana in United States currency is not 2 foreign

exchange contract.

In Blanco v. Pan America n Life Insurance Compéuy,

221 F. Supp. 219. see also 311 K 2d 424, the same de--

fenses to claims by polievholder Blanco and. othe:

. Cuban retugees were urged therein as here, and in sup-

pert thereof. the defendant cited the Court of Appeal!

opinion in the case at bar. That court conci tuded, how-

ever, that - ‘Federal courts are not bound by ‘state de-

cisions in interpreting, a federal question and disposed

oO} the matter by holding the Bretton Woods Agreement

had no applicability “in that case because the Cuban ..

_government lost _w hatever jurisdiction it possessed over

not~orly_ the subject: matter of the ligation but. also

over. the persons of the plaintiffs when they fled from

Cuba, ‘became alien residents of the United States,” po-

©

liticial citizens of nowhere, but civil citizens of Florida

as they were domiciled there. The court further re--

marked “* * * these laws (relied on by defendant) do

not appl to cover the situation of a Cuban national

enforcing an executory contract in the forum of a. >

othe: qurisdiction, according to. the-terms of ‘an obliga-

‘tion existing prior to the passage of thosé laws. Further,

we do not ‘believe that such laws and decrees can have _—

ee

any: force and effect over the persons of these htigants —

who, are rot only without Cuba, but. as refugees, are

not subject to its in personam | juris sdiction. ie, Slia “se

Moreover, courts, including those of this country as

“well as those of foreign jurisdictions, in- interpreting

contracts involving matters affected by ‘the Bretton

Woods. Agreement are uniform in their holding that “the

laws of the state or nation’ Ww here the parties intended

the contract to be performed tovern. Rodriguez v . Pan.

: American Life Insurance Company, 311 F. 2d 439, Pan

“Ameriean Life Insurance Company rv. Recio. 154 So. 2d

197 (Florida): Pan American Life Insurance Company -

Raij, 156 So. 2d 78% (Florida); Menandez ~. :Aetne

Insurance Company, 311 F. 2d 482: Ahmen Pay. Ndquih

». Hetrs. of Moise Abner, abstract appears in 4 T- M.

No — Nov. 24 25; 1948; Kraus v. ae

Gi N. Y. Supp. 2d 208. 187 Misc. 681: watt slp et al.

Bt. Akeiora Spoiecrost 80 N. ¥ Supp 2d 782: Frav

- man.v. Ango-Pragque Credit Bunk (London office) 1 All.

E. R. 337: Frankeman v. Ango-Prague Credit Bank ; All

E. R. +1025; PRI Banka National Corporat iar

{+ Frenkman, 2 All E.R. 47] a

a nha ,

Wind up in kis

oe

We find ‘untenable the suggestion of counse! that this

court t should aw ait the United States Supreme Court's

action in regard to several cases ‘pending before it on.

applications for writs, and wherein the applicability a

the “Act pf State” doctrine in controvetsies similar to

controlling, betore we, resolve this matter. To requife

this refugee, who is in a strange’ land and. possibly in:

dire need, to wait indefinitely for a fina! adjudication

Mf. his claim would be a travesty.on justice. and awe

think it ‘ould ° be folly‘ to sugvést that he return to

Cuba, tor his “éftart to sec ure . relief there might wel

“liquidation.” ,

Defendant's contention that this is not « case fo!

summary judgment, as well as the argument in support

thereof, is unimpressive under the tacts of the case

We note that in the very last paragraph. ofher briet

plaintiff's. counsel! cal! attention to the fact the judg

ent of the trial @ourt should be reinstate@ “wath a

‘jowatnse for attornew tees and ex cpenses Incurred by”

. ~~,

plaintiff, “Ng authority im support of these claims has

been, cited, an® *e knew of-none, Hencethis request

* 3 * ‘

must be disallowed

u ; wer ek ;

For the reasdns assigned, the judgment of the district

,court is. affirmed Defendant is to pay wll costs

.

eet

ay . : ey a Ss es me a eo ne estore

_ the case. at barvis’ mveived™ and wuld, therefore, De

eee +