New York Law Review

Tag: 1947

  • Messer v. New York Life Ins. Co., 272 A.D. 377 (1947): Requirements for Surrendering a Life Insurance Policy

    Messer v. New York Life Ins. Co., 272 A.D. 377 (1947)

    An insured’s request to surrender a life insurance policy for its cash value, coupled with a request for terms not provided in the policy’s options, constitutes a counteroffer that requires acceptance by the insurer to be effective; absent such acceptance, the original policy remains in force.

    Summary

    John Messer sought to surrender his life insurance policies and deposit the cash value with the company under terms different from the policy options, specifically requesting the right to withdraw principal at any interest date. The company sent a form with different withdrawal terms. Before the “supplementary contract” was finalized, Messer attempted to rescind his surrender request and pay the premium. The company refused, claiming the policies were surrendered. The court held that Messer’s initial request was a counteroffer not accepted by the company, thus the policies remained in force and the beneficiaries were entitled to death and disability benefits.

    Facts

    John Messer held two life insurance policies with New York Life. On February 15, 1946, Messer wrote to the company expressing his desire to surrender the policies on their anniversary date, March 5, 1946, for their cash value, to be deposited with the company at interest, with the added provision that he could withdraw the principal at any interest date. The policies allowed for surrender for cash value and various settlement options, but not for the withdrawal of principal at will. On March 28, 1946, Messer telegraphed the company to ignore his surrender request and tendered the premium payment. The company rejected the premium and tendered a “supplementary contract” which Messer refused.

    Procedural History

    The executors of Messer’s estate sued to recover the death and disability benefits under the policies. The trial court granted summary judgment for the insurance company, dismissing the complaint. The Appellate Division affirmed, and the executors appealed to the Court of Appeals.

    Issue(s)

    Whether Messer’s letter of February 15, 1946, constituted an effective surrender of the life insurance policies, thereby terminating the policies prior to his death?

    Holding

    No, because Messer’s request constituted a counteroffer to the insurance company, which the company did not accept, and because Messer rescinded his offer before the company could accept it by sending the telegram and the check for the premium.

    Court’s Reasoning

    The court reasoned that Messer’s letter was not an acceptance of an option within the existing policy terms because it requested a provision (withdrawal of principal) not offered in the policy. “The insured could not accept what was not offered.” Therefore, the letter was a counteroffer. The company’s response, offering withdrawals with a $250 minimum, was a second counteroffer. Citing Jones v. Union Central Life Ins. Co., the court emphasized that the company’s consent was necessary for the change, drawing an analogy to cases where the option had terminated. The court stated that the “supplementary contract” was a new offer, and the insured’s retention of it was a condition precedent to acceptance, which Messer refused. The court emphasized the distinction between a supplemental contract, which arises from exercising an existing option, and a new contract, which requires mutual assent to new terms. The original policies required surrender to be “accompanied by the Policy for endorsement”. Since Messer never surrendered the policies and, in fact, attempted to continue them by tendering the premium, the original insurance contracts remained in full force. Furthermore, any ambiguities in the company’s offer should be construed against the company. The Court explicitly said, “The so-called ‘supplementary contract ’, as the term is applied by the insurance company to the paper dated March 19, 1946, is a new offer to contract which had to be accepted in the manner provided in the company’s ‘ Income Settlement Request ’ and with that manner there was concededly no compliance.”

  • People ex rel. Shapiro v. Keeper of City Prison, 296 N.Y. 463 (1947): Excessive Bail and Constitutional Rights

    People ex rel. Shapiro v. Keeper of City Prison, 296 N.Y. 463 (1947)

    A writ of habeas corpus is available to protect against excessive bail, but relief is granted only to prevent invasion of constitutional rights, not merely due to a difference of opinion regarding the amount of bail.

    Summary

    This case addresses the issue of excessive bail and the use of a writ of habeas corpus to challenge it. The relators sought relief from what they considered excessive bail fixed at $250,000. The New York Court of Appeals affirmed the lower court’s decision, finding that considering the seriousness of the crime (murder), the relators’ backgrounds, their relationship to potential witnesses, and the risk of flight, the bail amount was not excessive as a matter of law. The court emphasized that the reasonableness of bail depends on the specific facts of each case.

    Facts

    The relators were being held in connection with a murder investigation. The judge of the Court of General Sessions fixed bail for each relator at $250,000. The prosecution presented evidence regarding the seriousness of the crime, the relators’ criminal records, their relationships to other individuals involved, and the possibility they might flee to avoid testifying.

    Procedural History

    The relators sought a writ of habeas corpus, arguing that the bail amount was excessive. The lower court denied the writ. The relators appealed to the New York Court of Appeals.

    Issue(s)

    Whether, given the facts presented, the bail amount of $250,000 fixed by the Court of General Sessions was excessive as a matter of law, thereby warranting relief through a writ of habeas corpus.

    Holding

    No, because considering the seriousness of the crime under investigation, the character, reputation, background, and extensive criminal records of the relators, their relationship to others against whom they may be called to testify, the possibility of flight to avoid giving testimony, and the difficulty of procuring their return if they leave the State, the bail amount was not excessive as a matter of law.

    Court’s Reasoning

    The Court of Appeals stated that a writ of habeas corpus is the proper mechanism to challenge excessive bail as a violation of constitutional rights. However, the court emphasized that the decision to grant relief depends on whether the bail is excessive as a “matter of law,” not merely a difference of opinion. The court considered several factors to determine the reasonableness of the bail: the seriousness of the crime (murder), the relators’ criminal histories, their relationships to potential witnesses, and the risk of flight. The court found sufficient evidence before the lower court to justify the high bail amount, given these factors. The court distinguished this case from People ex rel. Lobell v. McDonnell, noting that the evidence presented in this case regarding the relevant factors was not present in Lobell. The court stated, “the reasonableness of bail in any case depends upon examination of the particular record. Evidence such as was here adduced was not there furnished.” The court affirmed the order without prejudice to any future proceedings where the relators might raise the issue of undue or prolonged detention.

  • Levy v. New York City Teachers’ Retirement Bd., 296 N.Y. 347 (1947): Defining When a Teacher’s Retirement is Effective

    Levy v. New York City Teachers’ Retirement Bd., 296 N.Y. 347 (1947)

    Retirement is not complete until the retiring function has been exercised by the Retirement Board, even after a medical examination deems the teacher incapacitated, and the teacher retains the right to elect retirement options until that time.

    Summary

    This case concerns when a teacher’s retirement is considered ‘effective’ for the purpose of electing retirement benefits. Jeannette Levy, a teacher, was subject to a retirement resolution by the Board of Education. Prior to the Retirement Board’s action, but after a medical examination, Levy attempted to file an election for a specific retirement option. The Retirement Board rejected her election, claiming it was after the ‘effective date’ of retirement. The Court of Appeals held that retirement is not complete until the Retirement Board acts, and Levy’s election was timely.

    Facts

    Jeannette Levy was a teacher and member of the Teachers’ Retirement Association since 1917. On January 26, 1942, the Board of Education requested the Retirement Board to retire her for disability. A medical examination occurred on March 28, 1942, and the Medical Board certified that Levy was incapacitated and ought to be retired. On April 10, 1942, Levy received notice that her retirement would be listed on the Retirement Board’s calendar for action on April 28, 1942, scheduled to take effect retroactively to April 1, 1942. Before the Retirement Board acted, Levy filed an election to receive the actuarial equivalent of her retirement allowance under Option I. The Retirement Board rejected her election.

    Procedural History

    The case originated from the Retirement Board’s rejection of Levy’s retirement election. The lower courts likely ruled in favor of Levy, prompting the Retirement Board to appeal to the New York Court of Appeals.

    Issue(s)

    Whether a teacher, who has been examined by the Medical Board and certified as incapacitated, but before the Retirement Board has formally acted on the retirement application, is still a ‘contributor’ entitled to file an election for retirement benefits.

    Holding

    Yes, because the statute mandates that the Retirement Board must actively retire a member, and until that action occurs, the teacher remains a ‘contributor’ with the right to elect retirement options.

    Court’s Reasoning

    The Court reasoned that the statute vests the retiring function in the Retirement Board, requiring it to actively retire a member. Quoting the statute, the court emphasized that the Board “shall retire” a member when the specified conditions are met. The court found that retirement is not complete until the Board acts. The court distinguished between the medical examination, which is merely a recommendation, and the Board’s formal action, which effectuates the retirement. The court emphasized that until the board acted, Levy remained a “contributor” with the statutory right to file an election “at any time.” The Court dismissed the Retirement Board’s argument that a 1929 amendment defined the ‘effective date’ of retirement as the date of the medical examination, stating that this definition only applied to specific death benefit provisions and did not alter the Board’s fundamental duty to formally retire a member. The court reasoned that interpreting the ‘effective date’ as the date of the medical exam would render the teacher’s right to elect options “almost illusory,” because the Board could unilaterally set the effective date by controlling the timing of the medical exam, effectively nullifying the “at any time” election provision. The court noted, “A retirement allowance terminating with death would be of little value to many teachers who are retired for disability, and for that reason the statute gives to a teacher the right to elect to take a smaller retirement allowance with a death benefit which will accrue upon her death.”

  • Matter of Pernisi, 296 N.Y. 336 (1947): Admissibility of Evidence Under the Dead Man’s Statute

    Matter of Pernisi’s Estate, 296 N.Y. 336 (1947)

    The Dead Man’s Statute (CPLR 4519) prohibits a person interested in the event from testifying about personal transactions or communications with a deceased person if the testimony is offered against the deceased person’s estate.

    Summary

    This case addresses the application of the Dead Man’s Statute in a dispute over a promissory note. The claimant, Pernisi, sought to recover on a note allegedly executed by the deceased. The estate argued the note was paid, offering evidence of checks from the deceased to Pernisi. Pernisi attempted to testify the checks were for a different purpose. The court considered whether Pernisi’s testimony was barred by the Dead Man’s Statute and whether sufficient evidence existed to support the Surrogate’s finding of payment. The Court of Appeals held Pernisi’s testimony was properly excluded but divided on whether the circumstantial evidence supported the finding of payment.

    Facts

    The claimant, Pernisi, presented a $7,500 promissory note purportedly made by the deceased. The executors of the estate contended the note had been paid. They introduced six checks totaling $7,500 from the decedent to Pernisi. Pernisi conceded she received the proceeds of these checks. She further conceded the checks were not payments under a separation agreement but were payments in addition to those due under the agreement. Pernisi sought to testify that the checks were for a purpose other than payment of the note.

    Procedural History

    The Surrogate’s Court rejected Pernisi’s offer of oral testimony under the prohibition of section 347 of the Civil Practice Act (the Dead Man’s Statute), finding that the note had been paid. The Appellate Division affirmed the Surrogate’s Court decision. The case then went to the New York Court of Appeals.

    Issue(s)

    1. Whether the claimant’s testimony regarding the purpose of the checks was properly excluded under the Dead Man’s Statute.
    2. Whether there was sufficient evidence to support the Surrogate’s finding that the promissory note had been paid.

    Holding

    1. Yes, because the Dead Man’s Statute prohibits a person interested in the event from testifying about personal transactions or communications with a deceased person if the testimony is offered against the deceased person’s estate.
    2. Yes, because the evidence of the checks, along with the claimant’s concessions, provided a sufficient basis for the Surrogate’s finding of payment. (This holding was the subject of a dissent.)

    Court’s Reasoning

    The court upheld the exclusion of Pernisi’s testimony under the Dead Man’s Statute, emphasizing the statute’s purpose to protect the deceased’s estate from fraudulent claims. As for the sufficiency of the evidence, the majority found that the six checks totaling the exact amount of the note, coupled with Pernisi’s admission that these checks were in addition to payments under their separation agreement, constituted sufficient evidence for the Surrogate to infer payment. The court acknowledged the inference of payment was not uncontrovertible but emphasized it was the Surrogate’s role to draw inferences from the evidence presented. The dissent argued that while the inference of payment wasn’t a certainty, the Surrogate, as the trier of fact, was entitled to draw that inference from the conceded facts. The dissent quoted Tortora v. State of New York, 269 N.Y. 167, 170, stating, “Inference is never certainty, but it may be plain enough to justify a finding of fact.”