Sliosberg v. New York Life Ins. Co.

• Decision Date: 01 March 1927
• Citation: 155 N.E. 749,244 N.Y. 482
• Parties: SLIOSBERG v. NEW YORK LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

244 N.Y. 482

155 N.E. 749

SLIOSBERG

v.NEW YORK LIFE INS. CO.

Court of Appeals of New York.

March 1, 1927.

Action by Henri M. Sliosberg against the New York Life Insurance Company. Order of the Appellate Division (217 App. Div. 67, 216 N. Y. S. 215) denying a motion for a stay of proceedings under section 169-a of the Civil Practice Act, and defendant by permission appeals. Questions certified by the Appellate Division (217 App. Div. 742, 216 N. Y. S. 917).

Affirmed, and one of questions answered.

The following questions were certified:

‘(1) Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 10 of article 1 of the Constitution of the United States, that no state shall pass any law impairing the obligation of contracts?

‘(2) Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 1 of article 14 of the articles in addition to and amendment of the Constitution of the United States, that no state shall deprive any person of property without due process of law?

‘(3) Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 1 of article 14 of the articles in addition to and amendment of the Constitution of the United States, that no state shall deny to any person within its jurisdiction the equal protection of the laws?

‘(4) Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 6 of article 1 of the Constitution of the state of New York, that no person shall be deprived of property without due process of law, nor shall private property be taken for public use without just compensation?

‘(5) Would section 169-a of the Civil Practice Act, as sought to be applied by the defendant in this action, contravene the provision contained in section 1 of article 3 of the Constitution of the state of New York, that ‘the legislative power of this state shall be vested in the Senate and Assembly’?

‘(6) Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision contained in section 1 of article 6 of the Constitution of the state of New York, that ‘the Supreme Court is continued with general jurisdiction in law and equity, subject to such appellate jurisdiction of the Court of Appeals as now is or hereafter may be prescribed by law not inconsistent with this article’?

‘(7) Would section 169-a of the Civil Practice Act, as sought to be applied by defendant in this action, contravene the provision of section 2 of article 6 of the Constitution of the state of New York, that ‘the several Appellate Division, except as hereinafter provided, shall have and exercise such original or appellate jurisdiction as is now or may hereafter be prescribed by law’?'Appeal from Supreme Court, Appellate Division, First Department.

Charles E. Hughes and John Foster Dulles, both of New York City, for appellant.

Albert Ottinger, Atty. Gen. (Claude T. Dawes, Deputy Atty. Gen., and Clarence C. Fowler, of New York City, of counsel), for superintendent of insurance.

John W. Davis and David E. Hudson, both of New York City, for Equitable Life Assurance Society, amici curiae.

Walter H. Pollak, Ruth I. Wilson, and Frederic C. Pitcher, all of New York City, for respondent.

Louis Marshall, James Marshall, Borris M. Komar, Samuel Greenbaum, Edward S. Greenbaum, and Jonas J. Shapiro, all of New York City, amici curiae.

Osmond K. Fraenkel and Charles Recht, both of New York City, for Russian policy-holders, amici curiae.

Frederick B. Campbell and Paul C. Whipp, both of New York City, for First Russian Fire Insurance Company et al., amici curiae.

KELLOGG, J.

This action was brought to recover upon a 20-year life and endowment policy issued by the defendant on October 24, 1901, certain moneys thereby promised to be paid. The action was begun, by the service of a summons and complaint, in April, 1925. No answer to the complaint was served by the defendant. In lieu of answering, the defendant presented an application to the Appellate Division to stay the action until the expiration of 30 days next following the recognition de jure of a government of Russia by the government of the United States. The application was made under section 160-a of the Civil Practice Act, a section which was added to the act by chapter 232 of the Laws of 1926. The provisions of that section, so far as material, are as follows:

‘Sec. 169-a. Stay of Action on Insurance Contract Payable in Russian Roubles. Whenever in any civil action or special proceeding now or hereafter pending in any court of this state, it shall appear that * * * any cause of action, counterclaim, set-off or defense is founded upon or grows out of any contract of insurance made or entered into prior to November seventh, nineteen hundred and seventeen, by any insurance company organized under the laws of any state of the United States and expressed to be payable in Russian roubles or to be performed in whole or in part within the territorial confines of the former Russian Empire, such action or special proceeding, upon application, as hereinafter provided shall be stayed by order of the court in which the same is pending until the expiration of thirty days next following the recognition de jure of a government of Russia by the government of the United States. Such application may be made by any party against whom such cause of action, counterclaim, set-off or defense is asserted at any time after the commencement of the action or special proceeding and prior to the rendition of the judgment or final order therein. * * *’

The policy sued upon was issued prior to November 7, 1917. It was issued by an insurance company organized under the laws of the state of New York. It was ‘expressed to be payable in Russian roubles.’ It was ‘expressed * * * to be performed in whole or in part within the territorial confines of the former Russian Empire.’ The action brought, therefore, was wholly within the scope of the provisions of section 169-a of the Civil Practice Act. Consequently, if chapter 232 of the Laws of 1926, which added the section, was a valid legislative act, the defendant was entitled to the stay which it demanded. The Appellate Division denied a stay, holding that chapter 232 of the Laws of 1926 was an unconstitutional act in that it violated, among others, the provisions of article 1, § 10, of the Constitution of the United States, which inhibits state Legislatures as follows:

‘No state shall * * * pass any * * * law impairing the obligation of contracts.’

The complaint and the affidavits and other writings filed upon the application disclose the following facts:

The plaintiff, on October 24, 1901, the date of the policy, and for many years thereafter, was a Russian citizen. He was expelled from Russia in March, 1920. Having refused to register as a citizen, under the laws of the Soviet government of Russia, he was forbidden to re-enter its confines. Since June, 1920, he has lived in Paris, France. He came to New York City in March, 1925, and in April of the same year verified the complaint in this action. He returned to Paris in May of the same year. Although it is stated, in one of the affidavits filed, that the plaintiff ‘is not, and never has been, a subject of the Soviet government of Russia,’ it is not asserted, and does not otherwise appear, that the plaintiff has lost his citizenship, or that he is not now a citizen of the nation of Russia.

The policy in suit bears the signatures, written or printed, of the president and the actuary of the defendant, who were then resident in New York, which are expressed to have been affixed on the 24th day of October, 1901. It was countersigned by the general representative for Russia of the defendant. This countersignature is dated ‘St. Petersburg, November 1, 1901.’ It is therefore inferable that the policy was issued and delivered to the plaintiff at St. Petersburg on or about November 1, 1901. The policy insured the life of the plaintiff, in the amount of 20,000 roubles, for a period of 20 years from the 24th day of October, 1901. The terms of the policy expressly bound the defendant to pay ‘the above-mentioned insured amount in St. Petersburg to the wife of the insured, * * * if such death occurs while this policy is in force.’ They further bound the defendant as follows:

‘The company hereby agrees to pay to the insured or to his order the insured amount, i. e., twenty thousand roubles, if the insured is living at 12 o'clock noon on the 24th day of October, 1921.’

A schedule attached to the policy provided that, if the premiums were paid for 17 years from the date of the policy, the insured, if living, would be entitled to recover a cash surrender value of 16,140 roubles. It appears that the plaintiff did pay all the stipulated premiums down to, and including, the premium due on October 18, 1918. It would thus appear that the plaintiff, if entitled to any recovery, is entitled to a judgment for 16,140 roubles, as demanded in the complaint.

The policy in question stated that certain governmental insurance regulations, embodied in a writing known as the ‘Pravila,’ a copy of which was attached to the policy, should form essential parts of the contract of insurance. The Pravila required the defendant ‘in order to guarantee the insured against losses,’ to deposit an amount specified, in cash or securities, in the Russian State Bank. It also required the defendant to deposit and maintain in such bank other funds termed the ‘reserve fund’ and the ‘reserve capital.’ The amounts required to be deposited in such funds, from time to time, were to be determined by a method of calculation prescribed. The policy contained the following provision:

‘That the exact fulfillment of the...