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VARAS v. CROWN LIFE INSURANCE COMPANY (09/17/64)

decided: September 17, 1964.

VARAS, APPELLANT,
v.
CROWN LIFE INSURANCE COMPANY, APPELLANT



Appeals from judgment of Court of Common Pleas of Montgomery County, No. 61-5345 of 1961, in case of Alicia Varas v. The Crown Life Insurance Company.

COUNSEL

Lewis Weinstock, with him Roy L. Cameron, Jr., David S. Foulke, James M. Marsh, and LaBrum and Doak, and Foulke, Knight & Porter, for plaintiff.

Owen B. Rhoads, with him Arthur W. Leibold, Jr., and John G. Laylin and Covington & Burling, of the Washington, D.C. Bar, for defendant.

Rhodes, P. J., Ervin, Wright, Woodside, Watkins, Montgomery, and Flood, JJ. Opinion by Watkins, J.

Author: Watkins

[ 204 Pa. Super. Page 178]

These appeals by the plaintiff, Alicia Varas, and the defendant, The Crown Life Insurance Company, are from the judgment of the Court of Common Pleas of Montgomery County, entered on a directed verdict in favor of the plaintiff and against the defendant in the amount of $3680 with interest, representing the amount of premiums paid on an insurance policy; and from the refusal of post trial motions for judgment n.o.v. or for a new trial.

The policy in suit was applied for by the mother of the plaintiff, as her guardian, in Havana, Cuba, in April, 1944. The policy, written upon the life of the plaintiff, was delivered by the defendant company in Cuba on July 12, 1944 with a date of issue of May 23, 1944. The contract was a twenty-year endowment

[ 204 Pa. Super. Page 179]

    policy in the face amount of $5000. At the time of the delivery the plaintiff was a resident and citizen of Cuba; the defendant was a Canadian insurance company doing business and having a place of business in Cuba. Until 1951 premiums were paid in United States dollars which were legal tender at that time. From 1951 and through 1960 the premiums were paid in pesos.

The Canadian company defendant at the time of the suit was doing business and had an office both in Cuba and in Montgomery County, Pennsylvania, U. S. A. The trouble in Cuba caused the plaintiff to leave that country in August, 1960 and she has been a resident of the United States since that time in Florida and Georgia and expresses the intention of making and continuing her residence here. She is a political refugee without citizenship. She has been admitted as a permanent resident of the United States and is a civil citizen. Blanco v. Pan-American Life Ins. Co., 221 F. Supp. 219 (1963); U. S. v. Wong Kim Ark, 169 U.S. 649, 18 S. Ct. 456 (1888).

The plaintiff demanded payment by the company of the guaranteed cash surrender value of the policy and the company refused payment on the ground that the contract is governed by the laws of Cuba. The plaintiff, by a suit in assumpsit, demanded the cash surrender of the contract of insurance as provided in the policy or in the alternative, the return of the premiums paid. The defendant's answer admitted the execution and delivery of the policy of insurance and that the premiums were paid but, as new matter, alleged that performance in the United States is prohibited by Cuban law and its effect upon the contract, Cuba being the place of the creation of the obligation; that the monetary provisions of the policy were waived and plaintiff estopped from raising them because of the payment of premiums in pesos; and because of the International Monetary Fund Agreement.

[ 204 Pa. Super. Page 180]

At the conclusion of the trial a verdict was directed against the plaintiff on the first cause of action, the cash surrender value, and in her favor on the alternative cause of action, the return of the premiums paid. The jury determined that she was entitled to interest. The plaintiff and defendant filed cross post trial motions and they were dismissed. Both parties appealed.

Since oral argument, we have been asked by the defendant company to disregard the question raised as to the impact of the International Monetary Fund Agreement as on April 2, 1964, effective on that date, the Republic of Cuba had withdrawn from membership.

Cuban Law No. 13 passed on December 23, 1948 provided that United States currency should cease being legal tender and cease having debt redeeming force but by Decree 1384 dated the 20th of April, 1951 extended the status of legal tender of currency of the United States until June 30, 1951 and provided that after that date it would cease to be legal tender or have debt redeeming force. It also provided that all contract obligations enforceable in Cuba should be settled only in the national currency.

In January of 1959 the Batista government was replaced by that of Fidel Castro. The Castro government was recognized and still continues to be recognized by the United States as the government of the Republic of Cuba.

Law No. 568 effective October 2, 1959 made all transfers, payments or any dealings in foreign currency felonies and by a law dated February 23, 1961 provided that only coins minted and bills issued by the National Bank of Cuba should be legal tender.

The defendant contends that Decree 1384 modified its dollar obligation to the plaintiff while law 568 must be interpreted to prohibit payment of the policy in dollars. The defendant therefore refused ...


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