Danisch v. Guardian Life Insurance Co. of America

• Decision Date: 18 April 1957
• Citation: 151 F. Supp. 17
• Parties: Jan DANISCH, Antoni Danisch, Julia Danisch, Anna Schwientek, Gertrud Wojtcyzk, Emma Schweda, Sofia Janta, Jadwiga Salawa, Maria Stancyzk, Luiza Lesch and Gertrude Urganek, Plaintiffs, v. The GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Defendant.
• Court: U.S. District Court — Southern District of New York

151 F. Supp. 17

Jan DANISCH, Antoni Danisch, Julia Danisch, Anna Schwientek, Gertrud Wojtcyzk, Emma Schweda, Sofia Janta, Jadwiga Salawa, Maria Stancyzk, Luiza Lesch and Gertrude Urganek, Plaintiffs, v.The GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, Defendant.

United States District Court S. D. New York.

March 13, 1957.

Supplemental Opinion April 18, 1957.

Wolf, Popper, Ross, Wolf & Jones, New York City, for plaintiffs.

Walters & Donovan, New York City, for defendant.

EDELSTEIN, District Judge.

In an action on certain policies of insurance and supplementary contracts issued by the defendant on the life of a decedent who died in the United States, the plaintiff beneficiaries move for summary judgment.The defendant has filed a motion labeled as a cross-motion for summary judgment.The defendant has admitted the issuance of the policies and supplementary contracts; it has admitted the death of the insured and that it was notified and received proof of his death from beneficiaries residing in the United States; and it has further admitted non-payment to the plaintiffs in this action.Thus, the policies of insurance themselves are not in dispute nor is the liability of the defendant to the named plaintiffs.

But the defendant does resist payment to these beneficiaries, who are residents and citizens of the Polish People's Republic.It denies the authority of the plaintiffs' attorneys to institute this action on their behalf, on the ground that no faith or credence can be given to such an authorization as free and voluntary when it originates in a Communist police state.And in any event, it is alleged, there is not a reasonable assurance or likelihood that the plaintiffs would actually receive or have the benefit or use or control of the insurance proceeds if the money were to be transmitted to them or to persons purporting to represent them.Accordingly, the defendant urges as an alternative to dismissal that, pursuant to sections 474and978 of the New York Civil Practice Act, it be authorized to deposit the funds in court for the benefit of the persons entitled to them, until such time as they can be assured of actual receipt or beneficial use of the money.

Both of these issues are raised by the defendant in what purports to be a cross-motion for summary judgment.But a summary judgment, under Rule 56, Fed.Rules Civ.Proc. 28 U.S.C.A., deals with the merits and results in a judgment in bar.See 6 Moore's Federal Practice (2nd ed.) par. 56.03, page 2025.The defendant does not seek a judgment in bar, but a judgment in abatement, without prejudice, on the ground that the court has no jurisdiction to proceed because the plaintiffs have, in fact, commenced no action against the defendant.Accordingly, the motion will be treated as a motion to dismiss under Rule 12, and inasmuch as a threshhold issue of jurisdiction is presented, it must be considered first.

It has long been well settled that an appearance by a practicing attorney creates a presumption that he has authority to act and the law casts the burden of proving the contrary upon the one asserting it.Osborn v. President, etc., Bank of United States, 9 Wheat. 738, 829, 830, 6 L.Ed. 204;Hill v. Mendenhall, 21 Wall. 453, 454, 22 L.Ed. 616;Paradise v. Vogtlandische Maschinen-Fabrik, 3 Cir., 99 F.2d 53, 55;Booth v. Fletcher, 69 App.D.C. 351, 101 F.2d 676, 683;In re Gasser, 8 Cir., 104 F.2d 537, 538;In re Pearl Coal Co., 3 Cir., 115 F. 2d 158, 159;Bowles v. American Brewery, 4 Cir., 146 F.2d 842, 847.In its attempt to meet that burden of proof, the defendant sets forth that counsel acting for plaintiffs have no direct authority from them.That point is conceded, inasmuch as counsel are proceeding under the authority of the Polish Consul in Chicago and his successor, to whom plaintiffs have purported to give powers of attorney.¹It is argued, however, that the powers of attorney ought not to be given recognition or effect.For, it is asserted, following the death of the insured, the defendant forwarded to his beneficiaries in Poland its printed form of "Claimant's Statement".These statements were never returned to the defendant.Instead, the defendant received communications from the then Consul of the Polish People's Republic in Chicago forwarding the powers of attorney and the protocol or transcript of the court proceedings in Poland following which they were executed by the plaintiffs.From this it is argued that the primary moving force behind this action and the real plaintiff is the Communist government of Poland, not the named beneficiaries, and the powers of attorney must have been obtained from the plaintiffs by a police state mass court proceeding, to which they were summoned.

The defendant's conclusion proceeds from an evaluation of conditions prevailing under a government in a Communist country, an evaluation of which this court requires no persuasion.But valid as it may be, the evaluation falls short of providing evidence on the specific problem in issue, and only surmise and suspicion remain.I can merely repeat Judge Dimock's words in deciding a previous motion in this case, D.C., 18 F.R. D. 77, 79: "At this time * * * I have nothing but defendant's suspicion and surmise in support of such a conclusion that the powers of attorney were not voluntarily executed.The Polish People's Republic is a nation which is recognized by and has diplomatic relations with the United States.I cannot question the validity of these documents on the present state of the record."Nor is that result altered by the existence of the Treasury Regulations² pursuant to which United States Government funds will not be paid to persons residing in specified foreign countries, because of a lack of reasonable assurance that the payees will actually receive such funds or be able to negotiate checks or warrants for full value.

The Polish People's Republic is one of the specified countries³ and an amendment⁴ to the regulation provides that powers of attorney for the receipt or collection of such funds will not be recognized.The refusal of the United States Government to recognize powers of attorney from payees of government funds resident in Poland is merely in furtherance of the policy not to transmit such funds to Poland, for the reasons stated.The policy might be contravened by the recognition of even voluntarily given, valid powers of attorney.Thus the regulation itself is not authority for the invalidity of powers of attorney given by residents of the Polish People's Republic.The defendant has failed to meet the burden of proving the lack of authorization of plaintiffs' counsel.Accordingly, the motion to dismiss must be denied.

With the jurisdictional issue decided in favor of the plaintiffs, they are entitled to summary judgment, for there is no defense on the merits.The only question remaining is whether that judgment should be conditioned by the application of sections 474and978 of the New York Civil Practice Act.There is no provision in the Federal Rules of Civil Procedure covering the situation, but by Rule 83, the District Court may from time to time make and amend rules governing its practice not inconsistent with the federal rules.By Civil Rule 13 of this court, provision is made for the discretionary application of the procedure prevailing in the Supreme Court of the State of New York, in a situation not covered by the provisions of any statute of the United States or of the Federal Rules of Civil Procedure, where there are no parallels or analogies furnished by such statutes and rules, and in default of a procedure previously prevailing in courts of equity of the United States.SeeUnited States v. Certain Land, etc., D.C., 71 F.Supp. 363, 364.This situation would seem to be one where the New York procedure might appropriately be applied.

But the plaintiffs argue that to apply it, by ordering the proceeds of the judgment to be deposited in court for the benefit of the plaintiffs, to be paid out on the special order of the court when they subsequently are able to show that they will have the benefit or use or control of the money, would be in violation of the Constitution of the United States.Specifically, it is contended that such statutes so applied would impair the obligation of contracts, in violation of Section 10 of Article 1;⁵ would contravene the provision of Section 1 of the Fourteenth Amendment, that no state shall deprive any person of property without due process of law; and would violate the provision of Section 1 of the Fourteenth Amendment, that no state shall deny to any person within its jurisdiction the equal protection of the laws.

It is, of course, an axiom of constitutional law that a substantial impairment of a means of enforcement is an impairment of the contract obligation.Sturges v. Crowninshield, 4 Wheat. 122, 4 L.Ed. 529;McCracken v. Hayward, 2 How. 608, 11 L.Ed. 397;White v. Hart, 13 Wall. 646, 20 L.Ed. 685;Edwards v. Kearzey, 96 U.S. 595, 24 L.Ed. 793;Bronson v. Kinzie, 1 How. 311, 11 L.Ed. 143;Penniman's Case, 103 U.S. 714, 720, 26 L.Ed. 602.The plaintiffs cite Sliosberg v. New York Life Ins. Co., 244 N.Y. 482, 155 N.E. 749, 751, as authority directly controlling the case at bar.An action had been brought in 1925, prior to United States recognition of the U. S. S. R., to recover on an insurance policy "expressed to be payable in Russian roubles" and "expressed * * * to be performed in whole or in part within the territorial confines of the former Russian Empire * * *".An application was made, pursuant to section 169-a of the Civil Practice Act(a section added by Chapter 232 of the Laws of 1926), to stay the action until the expiration of 30 days next following the recognition de jure of a government of Russia by a government of the United States.The New York Court of Appeals held the statute to be unconstitutional as depriving parties entitled to sue on a contract of a remedy for an...