409 U.S. 953 (1972)

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U.S. Supreme Court


409 U.S. 953

Hector deLARA et al.
No. 71-1487.

Supreme Court of the United States

October 24, 1972

On petition for writ of certiorari to the Supreme Court of Florida.

The petition for a writ of certiorari is denied.

Mr. Justice BRENNAN, with whom Mr. Justice DOUGLAS, concurs, dissenting.

I dissent from the Court's refusal to grant certiorari to consider whether the Florida Supreme Court's choice of law in this action on a life insurance contract deprived petitioner of due process under the Fourteenth Amendment and the principles established in Home Insurance Co. v. Dick, 281 U.S. 397 (1930). Petitioner, a Canadian insurance company, issued a policy of life insurance in 1938 to German Lopez Sanchez, who was a citizen and resident of Cuba until his death in 1962. The policy provided that all payments would be made in United States dollars, which were then recognized as one of two legal currencies in Cuba. But on June 30, 1951, the government of Cuba suspended the legal tender status of the dollar and decreed that all previously contracted dollar obligations would henceforth be payable exclusively in Cuban pesos at the rate of one peso per dollar. Petitioner concluded that the decree automatically converted the policy from dollars to pesos, and on July 1, 1951, it notified the insured that '[a]ll permiums payable in accordance with this policy as well as all other liability contracted under the same and in which a reference is made to American currency, will from now on be payable in Cuban National currency, at par, in accordance with Law No. 13 of 1948 and Decree No. 1384 of April 1951.' The insured declined to terminate the policy in light of this notification, and made all subsequent payments entirely in pesos. By legislation in 1959 and 1961 the Cuban Government reconfirmed the 1951 decree and provided criminal penalties for its violation. Petitioner

Page 409 U.S. 953 , 954

maintains peso reserves in Cuba prescisely for the purpose of meeting its obligations under this and similar contracts, but it is barred by the Cuban currency laws from transferring those funds outside of Cuba. Under Cuban law it thus seems clear that petitioner was obligated to pay the benefits due under the policy only in Cuba and only in pesos.

Nevertheless, in this suit brought by respondents, beneficiaries of the insured who are now living in Florida, the Supreme Court of Florida held that petitioner's obligations under the contract should be determined according to Florida law. And applying the law of that State, the court concluded that petitioner was obligated to pay the benefits in Florida and in United States dollars. de Lara v. Confederation Life Assn., 257 So.2d 42 (Fla.1971).

Whether the state court correctly applied its own substantive law is, of course, not in issue here. We are concerned only with the state court's choice of law. Petitioner maintains that the Due Process Clause of the Fourteenth Amendment precludes a State from altering 'substantive obligations arising out of a foreign transaction having no significant relation to the state.' The general validity of that proposition is clearly established by Home Insurance Co. v. Dick, 281 U.S. 397 (1930), where we held that the State of Texas was 'without power to affect the terms of the contracts' since 'all acts relating to the making of the policy were done in Mexico.' In an opinion by Mr. Justice Brandeis, the Court held that the attempt by the Texas courts 'to impose a greater obligation than that agreed upon and to seize property in payment of the imposed obligation violates the guaranty against deprivation of property without due process of law.' 281 U.S., at 408.

In Clay v. Sun Insurance Office, Ltd., 377 U.S. 179 (1964), we reaffirmed by implication the validity of Dick, but [409 U.S. 953 , 955]

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