New York Life Ins. Co. v. London

• Decision Date: 03 July 1936
• Docket Number: No. 4310.,4310.
• Citation: 15 F. Supp. 586
• Parties: NEW YORK LIFE INS. CO. v. LONDON.
• Court: U.S. District Court — District of Massachusetts

15 F. Supp. 586

NEW YORK LIFE INS. CO. v. LONDON.

No. 4310.

District Court, D. Massachusetts.

July 3, 1936.

F. H. Nash and Richard Wait, both of Boston, Mass., for plaintiff.

Henry H. Davis, of Boston, Mass., for defendant.

BREWSTER, District Judge.

This is a petition for a declaratory judgment, brought under section 274d of the Judicial Code (Act of June 14, 1934. 28 U.S.C.A. ß 400).

The petition is before the court upon defendant's motion to dismiss. The petition alleges that the plaintiff is a life insurance company which issued, between May 16, 1925, and July 1, 1927, four policies of insurance to the defendant. Copies of the policies are annexed to the petition. The aggregate amount of the policies is $30,000. By the terms of these policies, the company agreed to pay the insured $10 per $1,000 of the face of the policies each month during the lifetime of the insured, and also to waive the payment of premiums if the insured should become wholly and presumably permanently disabled before he had reached a specified age.

In the contracts the insured agreed to pay stipulated premiums, in some cases annually and in others semiannually.

The policies contain the usual clause providing for default for nonpayment of premiums, with thirty days' grace.

Prior to April 1, 1932, the defendant became afflicted with arthritis, which prevented him from engaging in any occupation for remuneration or profit, and the plaintiff recognized defendant's claim for the payments under the policies, due on account of such disability. These payments were continued to and including September 1, 1934. It is alleged that after that date the defendant's condition improved and plaintiff no longer deemed his disability to be total within the meaning of the policies, and since that date has refused to make any payments under the policies. The defendant denies his recovery and still claims total disability.

On January 4, 1936, the defendant began proceedings against the plaintiff to recover the monthly payments under said policies, which action the plaintiff caused to be removed to the federal court; whereupon the defendant discontinued the action, and upon information and belief it is alleged that the defendant intends to bring, in the state courts, separate suits on each policy in order to keep the ad damnum below $3,000 whenever possible, thus preventing removal to this court.

Plaintiff alleges an actual controversy between it and the defendant as to its obligations to the defendant, arising out of the defendant's claims and demands under the policies; whereupon the plaintiff prays for this court to "declare the rights of the defendant and the obligation of the plaintiff under the said policies." (Italics supplied.)

The provisions of the statute pertaining to the present inquiry are as follows:

"(1) In cases of actual controversy * * * the courts of the United States shall have power upon petition, declaration, complaint, or other appropriate pleadings to declare rights and other legal relations of any interested party petitioning for such declaration, whether or not further relief is or could be prayed, and such declaration shall have the force and effect of a final judgment or decree and be reviewable as such. * * *

"(3) When a declaration of right or the granting of further relief based thereon shall involve the determination of issues of fact triable by a jury, such issues may be submitted to a jury in the form of interrogatories, with proper instructions by the court, whether a general verdict be required or not."

The defendant's motion to dismiss raises for consideration two contentions: (1) That the Declaratory Judgment Act impairs the defendant's right to a trial by jury and is, therefore, unconstitutional; (2) that the case at bar does not fall within the reach of the act, since no right or legal relationship of the plaintiff is in controversy.

First. By its express terms the act can be invoked only in case of actual controversies, thus avoiding the objection that a court cannot be required to render a merely advisory opinion. Muskrat v. United States, 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246; Anway v. Grand Rapids Ry. Co., 211 Mich. 592, 179 N.W. 350, 12 A.L.R. 26.

That the act so limited is constitutional is no longer open to doubt. Nashville, Chattanooga & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 53 S.Ct. 345, 347, 77 L.Ed. 730, 87 A.L.R. 1191; Zenie Bros. v. Miskend (D.C.) 10 F.Supp. 779; Ohio Casualty Ins. Co. v. Plummer (D.C.) 13 F.Supp. 169; State of Kansas v. Grove, 109 Kan. 619, 201 P. 82, 19 A.L.R. 1116; Blakeslee v. Wilson, 190 Cal. 479, 213 P. 495; McCrory Stores Corp. v. S. M. Braunstein, Inc., 102 N.J.Law, 590, 134 A. 752; Board of Education of City of Rochester v. Van Zandt, 234 N.Y. 644, 138 N.E. 481.

The provisions of the third paragraph of the act above quoted have been deemed to answer constitutional requirements securing to the litigant the right to a jury trial.

Second. By the express terms of the Federal Declaratory Judgment Act, a further limitation seems to be clearly imposed upon the powers of the court to grant declaratory judgment. This limitation is found in the words "to declare rights and other legal relations of any interested party petitioning for such declaration."

It must be noted that the petitioner in the instant case has asked for a declaration respecting the rights of the defendant and the obligations of the plaintiff. In Columbian National Life Insurance Company v. Foulke (D.C.) 13 F. Supp. 350, the court held that an insurer issuing an accident policy could not invoke the statute for the purpose of determining the liability of the insurer when a controversy arose as to whether the death of the insured was accidental. In the opinion the court observed that the terms "rights" and "liabilities" historically are in antithesis. If Congress had intended to provide generally for a declaration of liabilities in the Declaratory Judgment Act, it certainly would have used the word; it would not have buried the intent in so indefinite a phrase as "other legal relations." The opinion in this case has been criticized in Gully v. Interstate Natural Gas Co. (C.C.A.) 82 F.(2d) 145, and the soundness of it has been questioned by the plaintiff's attorney. So far as the decision holds that immunity from liability is not a right, I concur. In my opinion that conclusion is not only compelled by the language of the statute, but it has the support of the authorities in England and in the United States. It must be presumed that the words "rights and other legal relations of any interested party petitioning" were inserted in the statute for a purpose. As words of limitation they cannot be ignored. If given effect they restrict the powers of the court to those cases where the rights and relations of the plaintiff are involved in controversy and do not extend to cases where the only controversy relates to the liability of the moving party. I regard it as significant that Mr. Justice Stone, in the Nashville Case, thought it worthy of note that the Tennessee Declaratory Judgment Statute, then under consideration, had "often been considered by the highest court of Tennessee, which has consistently held that its provisions may only be invoked when the complainant asserts rights which are challenged by the defendant, and presents for decision an actual controversy to which he is a party, capable of final adjudication by the judgment or decree to be rendered." (Italics supplied.)

It is also further to be noted that the court in that case observed that "the relief sought is a definitive adjudication of the disputed constitutional right of the appellant plaintiff, in the circumstances alleged, to be free from the tax."

I regard this statement as a recognition of a constitutional right in the individual to be free from the unlawful imposition of a tax, and that this is a right capable of being positively asserted against those acting without authority. On this ground many of the cases cited by the plaintiff can be reconciled with the conclusion I reach. Gully v. Interstate Natural Gas Co., supra; Penn v. Glenn (D.C.) 10 F.Supp. 483; F. G. Vogt & Sons v. Rothensies (D.C.) 11 F.Supp. 225.

The statute has been invoked to determine the validity of patents. Thus, in Lionel Corporation v. De Filippis (D.C.) 11 F.Supp. 712, the court entertained a suit under the act to determine the right of the plaintiff to continue to market and sell toy boats without interference from the defendant. See, also, Zenie Bros. v. Miskend (D.C.) 10 F.Supp. 779.

On the other hand, in New Discoveries, Inc., v. Wisconsin Alumni Research Foundation (D.C.) 13 F.Supp. 596, 599, a motion to dismiss was granted in a case attacking the validity of patent rights. The court obse...