Sibley v. Equitable Life Assurance Co. of United States — 18 N.Y. St. Rep. 834

Majority

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George E. Sibley, as Assignee, App’lt. v. The Equitable Life Assurance Company of the United States, Resp’t.

(New York Superior Court, General Term,

Filed October 25, 1888.)

Headnote

1. Insurance (Life) — Interest — When it must be paid on money WRONGFULLY WITHHELD.

In an action against the defendant for the amount due under a certain policy of life insurance, wilh interest thereon from the 1st of October, 1887, the defendants presented a petition whereby it admitted that the amount named in the complaint was du.: under the said policy, and that it had been due since the date aforesaid. That they were ready and willing to pay the same to the person rightly entitled thereto, but that it was ignorant of the rights of the several parties to the action, etc. The court ordered the defendant to pay the amount due without interest, into a certain trust, company to the credit of this action, and that upon said payment the said defendant should be discharged fr- m lability to the plaintiff or any of the defendants herein, l.eld, that the court did not have power by an order to discharge the defendant from liability to the plaintiff without payment of the amount which was due upon the p- licy, and interest from the date aforesaid.

3. Same—Practice—Interpleader—When proper remedy.

If the company desired to relieve itself from the obligation to pay interest, it could have commenced an action for au interpleader.

Appeal from an order of Judge O’Gorman, made March 29, 1888, discharging the respondent from liability under an endowment policy of life insurance, due October, 1887, upon payment of the amount originally due under the policy, without costs or interest, into court, and,' further, ordering the deposit of the policy in the clerk’s office by the plaintiff. The plaintiff sues, as assignee in bankruptcy of the insured, and has joined as defendants the insurance

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company, the insured and the daughter of the latter, claiming under an assignment, which the plaintiff seeks to set aside as fraudulent. The insurance company had one month, after the maturity of the policy and demand for payment of the same, and before this suit, within which to begin an action of interpleader and pay the money into court. It not only failed to do this, but delayed over four months more before serving its answer. These denied the material allegations of the complaint, and subsequently made a motion for the relief, from the order granting which the plaintiff appeals.

Roger Foster, for app’lt; Alexander & Green, for resp’t; James G. Janmay, of counsel.

The complaint demands judgment against the defendant, the Equitable Assurance Company, for the amount due under the policy of insurance set up in the complaint, with interest thereon from the 1st of October, 1887.

The defendant presented a petition to the court whereby it admits that the amount named is due under the said policy, and that it has been due since October 1, 1887. That when said amount became due defendants were ready and willing to pay the same to the person rightly entitled thereto, but that it is ignorant of the rights of the several parties to the action, and cannot with safety pay the same to any person, and on that petition the court ordered that the said corporation may pay the amount due, without interest, into the Mercantile Trust Company, to the credit of this action, and that upon said payment the said defendant be relieved and discharged from all liability to the plaintiff or any of the defendant’s herein.

We do not think that the court had power by an order to discharge the defendant from liability to the plaintiff without payment of the amount which was due upon the policy, and interest from the 1st of October, 1887. This interest was under the complaint in this action as much a part of the demand of the legal owner of the policy of insurance, as the amount required to be paid by the policy.

If the company desired to relieve itself from the obligation to pay interest, it could have commenced an action for an interpleader. Instead of commencing such an action, the company, after having refused to pay the plaintiff, did nothing until it was sued, and in the meantime retained the money. So, if in point of fact the company has an equitable defense against plaintiff’s claim for interest, it must remain a party to the action and set forth such defense by answers.

As the case stands at present the order should only be

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granted on the payment into court of the amount admitted to be due, with interest up to the time of payment.

The order appealed from should be modified by inquiring the defendant to pay the sum of $10,142, with interest thereon from October 1, 1887, to the date of the payment of the principal sum. The appellant should have ten dollars costs and disbursements of this appeal.