Tuthill v. Goss — 35 N.Y.S. 136

Majority

p. 136

TUTHILL v. GOSS et al.

(Supreme Court, General Term, Second Department.

July 26, 1895.)

Headnote

1. Creditors’ Bill—Judgment against Partnership—Enforcement against One Partner Alone.

In an action by a judgment creditor of a partnership against the widow of a deceased partner to set aside an alleged fraudulent conveyance of individual property made by decedent in his lifetime, it need not appear that complainant’s remedy at law against the surviving partner has been exhausted.

2. Insurance of Husband’s Life—Premiums—Eights of Creditors.

Under Laws 1870, c. 277, providing that it shall be lawful for a wife, “by herself and in her name,” to cause to be insured, for her sole use, the life of her husband, and that, when the premium paid in any year out of the husband’s funds shall exceed $500, the excess shall inure to the bene1fit of the husband’s creditors, where an insolvent husband effected insurance on his life, payable to his personal representatives, and assigned the same to his wife, on his death his creditors could recover, in an action against his wife and personal representatives, the amount of premiums paid by him in excess of $500 annually.

p. 137

Appeal from special term, Kings county.

Action by Benjamin Tuthill, suing on behalf of himself and all others who may desire to come in and contribute towards the expenses in the action, against Mary R Goss and Mary 0. Rogers, individually and as administratrix of Guy 0. Goss, deceased, to set aside, as fraudulent and void as to the creditors of said decedent, the assignment of a life insurance policy to defendant Mary R. Goss, and for other relief. A demurrer to the complaint was overruled, and defendants appeal. Affirmed.

The first cause of action set out a judgment in favor of plaintiff against decedent and one Sawyer, as copartners, which remains unsatisfied; and plaintiff seeks to set aside the transfer by decedent as such judgment creditor, without alleging that his remedy at law against Sawyer is exhausted. The second cause of action is founded on Laws 1870, c. 277, providing that “it shall be lawful for any married woman by herself and in her name (or in the name of any third person with his assent as the trustee) to cause to tie insured for her sole use the life of her husband, * * * but when the premium paid in any one year out of the property or funds of the husband shall exceed $500 * * * such excess, with interest thereon, shall inure to the benefit of his creditors”; decedent having effected insurance on his life, payable to his personal representatives, and having subsequently assigned the policy to his wife.

The opinion of Mr. Justice CULLEN at special term is as follows;

I think both causes of action, as set out in the complaint, are valid. As to the first cause of action, little need be said. The judgment created a joint and several obligation against each defendant. As to a several defendant, it was not necessary to exhaust the remedy at law against one defendant before proceeding in equity against the other. As to the second cause of action, it may be conceded that our statute has no extraterritorial effect. But this admission is not fatal to the plaintiff’s claim. First, it is alleged that the deceased was a nonresident only up to the year 1885. Any payments made by him subsequent to that time in violation of the statute can be recovered. Second, it may well be doubted whether our statute, instead of being restrictive, is not the reverse. That is to say, the statute gives the wife a title to the insurance as against creditors, which, if it were not for the statute, would be subjected to the claims of creditors. The complaint charges that the deceased was insolvent. The money that was applied to the premiums on the policy belonged to the deceased’s creditors, and without the statute they could have followed the fund, and recovered the full amount, or possibly the whole proceeds. Holmes v. Gilman, 138 N. Y. 375 , 34 N. E. 205 . Judgment for plaintiff on demurrer, with costs, with leave to defendant .to answer on payment of costs.

Argued before BROWN, P. J., and DYKMAN and PRATT, JJ.

Calvin D. Van Name, for appellants.

Thomas J. Ritch, for respondent.

The opinion at special term covers the questions so fully that further discussion is unnecessary. The statements in the eighth subdivision of the defendant’s pleading are appropriate for an answer, but out of place in a demurrer. They were therefore properly disregarded at special term, as not being properly before the court. The judgment must be affirmed, with costs, with leave to answer on payment of costs. All concur.