Maloney v. John Hancock Mutual Life Insurance Co.

• Decision Date: 03 July 1958
• Docket Number: Civ. No. 5755.
• Citation: 164 F. Supp. 93
• Parties: Donald W. MALONEY, as Trustee in Bankruptcy of Eastern Footwear Corporation, Bankrupt, Plaintiff, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of New York

164 F. Supp. 93

Donald W. MALONEY, as Trustee in Bankruptcy of Eastern Footwear Corporation, Bankrupt, Plaintiff, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Defendant.

Civ. No. 5755.

United States District Court N. D. New York.

July 3, 1958.

Kaye, Scholer, Fierman & Hays, Alexander H. Rockmore, New York City, for plaintiff, Charles H. Cohen, New York City, of counsel.

Lockwood & Vaughan, Utica, N. Y., for defendant, Bert B. Lockwood, Utica, N. Y., George W. Riley, New York City, Thomas H. Smith (of the Boston, Mass. Bar) of counsel.

FOLEY, District Judge.

Both parties move for summary judgment. Each side states and concedes in the briefs there exists no material fact issue which might prevent summary disposition as a matter of law on the papers presented. See Vermont Structural Slate Co. v. Tatko Bros., 2 Cir., 233 F.2d 9. Each agrees substantially on the depositions, exhibits, admissions and writings to be considered although there is some dispute by the plaintiff to the correctness of certain affidavits attached to the motion papers of the defendant and also as to the relevance and materiality of papers on file in this court as to a Chapter XI proceeding involving Eastern Footwear Corporation and its ultimate adjudication as a bankrupt.

The claim does not seem unusual when its demand is merely stated to be one to recover the amount of $42,900.02 on a policy of life insurance, the face amount of the policy being $50,000. However, there is a unique factual situation present which, in my judgment, removes simplicity from the picture and does not allow the ordinary application of simple statutory expression. Aaron Burr expressed ironically his conception that law is whatever is "boldly asserted and plausibly maintained." The vigorous briefing in behalf of the plaintiff with a wealth of New York case law meets the first requisite, but in my judgment there is nothing in the admitted facts to maintain plausibility for the legal construction the plaintiff seeks to draw from such facts.

The question resolves around the issuance of a policy of life insurance No. 4148873 to Eastern Footwear in 1945 as owner-applicant, upon the life of its Vice President and General Manager, James J. Calderazzo. The history of this policy becomes important in 1953. An annual premium in the amount of $1,586 to keep the policy was to be paid November 23, 1953, the last premium payment being made for 1952. Important events occurred in June of 1953. Eastern Footwear was in deep financial trouble and about that time an Unofficial Creditors' Committee was formed at least to guide in some sense the affairs of the harassed company. The depth of the financial difficulty is emphasized for me by the fact that a petition for arrangement was filed in this Court on July 2, 1953 under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq. Also in the submitted deposition of D. J. Calderazzo, President of Eastern Footwear, there is support for present or imminent insolvency in June, 1953, by his statement that the operation of Eastern Footwear had shrunk to 1/10 its size (page 17 of his deposition), and Leon I. Radin, the accountant, who has a feature role herein, testified that in June, 1953, the company was insolvent. (Pages 10, 31, 32 of Radin's deposition). In June, 1953, the crucial event happened upon which the plaintiff mainly bases its right to recover. As I read Radin's testimony (pages 4, 7, 8, 29 of his deposition), he and his firm of accountants, Leon I. Radin & Company, were designated by the Unofficial Creditors' Committee in early June, 1953, to make a complete audit of Eastern Footwear's books. Despite this invitation from the Creditors' Committee Radin wanted some security from the debtor corporation, and after his personal urging and request to the attorney, Hays, who apparently was then acting for the Creditors' Committee, and a discussion with Attorney Levin representing D. J. Calderazzo, the fateful assignment of June 11, 1953 was executed by D. J. Calderazzo as President of Eastern Footwear Corporation. (Pages 4, 5, 7, Radin's deposition.) A copy of the assignment is attached to the "Responses to the Plaintiff's Interrogatories" and its body reads:

"In consideration of accounting services to be rendered, the undersigned hereby assigns to Leon I. Radin & Co., 101 West 31st Street, New York City, all of our right, title and interest in and to the property enumerated on Schedule "A" hereto annexed and James Talcott, Inc. and the insurance companies therein enumerated and are hereby authorized and directed out of the first monies available to pay to said Leon I. Radin & Co. all sums demanded by the said firm upon presentation of bills rendered and approved by the Creditors' Committee, of which Irving Fife is chairman."

Schedule "A" referred to lists merchandise inventory of finished shoes held by James Talcott, Inc. under a warehousing arrangement with Eastern Footwear and then lists twenty-three separate insurance policies totalling a face amount of $585,000, among which is set forth the policy here in question, No. 4148873, issued by the defendant Insurance Company. Copies of the important correspondence between the Radin Company and the defendant Insurance Company in reference to the alleged assignment is attached also to the Responses to the Plaintiff's Interrogatories. Thereafter, in February, 1955, Mr. Radin came before the Referee in Bankruptcy and in a very informal manner was paid the sum of $3,500 from the assets of the debtor corporation still in arrangement for the accounting services he had rendered for the three or four-week period prior to the filing of the petition for arrangement on July 2, 1953. He says he endorsed the check as dictated by the Referee "In full settlement of services rendered to the Creditors' Committee prior to July 2, 1953, and in full settlement of your assignment of proceeds of all life insurance policies wherein Eastern Footwear Corporation is beneficiary." (pages 17, 18, 21, 22, 33 of Radin's deposition).

On February 14, 1955, Mr. Radin signed a simple, uncomplicated and clear assignment to such effect. This assignment, or reassignment, is attached to the Plaintiff's motion papers. By these efforts, this lawsuit by the trustee of Eastern Footwear was given life in an attempt to resuscitate its collapsed rights.

When the premium was to be paid in November, 1953, the Insurance Company only mailed the notice of the premium to be paid on or before November 23, 1953, to Eastern Footwear Corporation and James J. Calderazzo, upon whose life the policy was based. Admittedly, no notice of due premium was mailed to Leon I. Radin & Co., the purported assignee. Although Eastern Footwear was under an arrangement proceeding, the premium was not paid by it or Calderazzo or in fact by anyone. At this time, the total amount of loan and interest on this policy was $7,099.98; and in the affidavit of Harold A. Garabedian, attached to the defense motion papers, the policy had a net cash value of two cents, and...