Masten v. Amerman — 21 N.Y. St. Rep. 222

Majority

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Arthur H. Masten, as Receiver, etc., Resp’t, v. Richard Amerman et al., App’lts.

(Supreme Court, General Term, First Department,

Filed January 28, 1889.)

Headnote

1. Insurance (life)—Right of receiver to recover excess of premiums under Laws 1870, chap. 377.

Where a policy of insurance is taken out by a wife, in her own name, on the life of her husband, for her sole use, and in' case of her death, for their children, if there be any surviving, and if not, then to the representatives of her husband, and it appears that premiums have been paid out of the husband’s property in excess of §500 per annum, and such excess is sought to be reached by the receiver of the husband, appointed in supplementary proceedings, Held, that he is not a creditor within the meaning of the statute, and is not entitled to recover.

2. Same—Receiver—Interest of.

The plaintiff, by virtue of his appointment as receiver, is vested only with such property as the judgment-debtor had at the time of the commencement of the supplementary proceedings.

3. Same—Receiver.

The interest of the husband in the policy being only a contingent one, neither he nor his receiver can maintain an action predicate upon it.

Appeal from judgment overruling demurrer.

D. Wilcox, for app’lts; J. M. Van Colt, for resp’t.

It appears that on March 21, 1871, the defendant Eleanor Amerman by herself and in her name caused to be insured by the defendant, the Equitable Life Insurance Company, for her sole use, the life of her husband, the defendant, Richard Amerman, in the sum of $20,000, for the term .of his life. The policy stipulates to pay the amount.of the assurance to the wife for her use, if living, and if not living, to the children of said Richard Amerman or their guardian for their use or if there be no such children surviving, then to the representatives of Richard Amerman. The defendant, Frances A. Walker, is a daughter of Richard Amerman. In November, 1886, a judgment was recovered in this court against Richard Amerman, and in March, 1887, in proceedings supplementary to execution, the plaintiff was appointed receiver of all his property and effects. Premiums upon the policy, it appears have been paid out of the husband’s property in excess of $500 per annum, and the total of such excess amounts to $1,917.36.

Assuming that the effect of the act of 1870, chapter 277, was that the policy was to be exempt from creditors unless

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the amount of annual premium exceeded the sum of $500, and where the amount paid out of the funds or property of the husband was over $500, the lien of the creditor might attach to the excess of premiums so paid, as indicated by the adjudication in Baron v. Brummer ( 100 N. Y., 376 , 377). Nevertheless, the plaintiff is not entitled to recover, for the reason that he is not a creditor within the meaning of the statute, as interpreted by the decisions in this state. The plaintiff, by virtue of his appointment as receiver, could only become vested with such property as the judgment debtor had at the time of the commencement of the supplementary proceedings. (Earl, J., in Dubois v. Cassidy, 75 N. Y., 298 , 302.

In Browning v. Bettis (8 Paige, 568), it was held that “a receiver of a judgment debtor’s property takes no right to compensation for the debtor’s uncompleted services, where by the terms of employment they are not payable until the completion of the services, because the debtor himself “would have no legal or equitable right to demand any compensation whatever for what he had already done, if he should neglect to go on and complete ” his services.

And where moneys are held in trust for a judgment debtor, at the instance of another, a receiver in supplementary proceedings has no actionable or other interest in them, while the judgment creditor may have. Williams v. Thorn, 70 N. Y., 270 ; see, also, McEwen v. Brewster, 17 Hun, 223 .

The question, therefore, in determining the status of the plaintiff, who seeks in this action to secure a prior lien upon the excess to which reference has been made, is whether Richard Amerman had any interest which could be reached through the receiver in an action of this kind.

Whatever rights may accrue to the creditor under the statute of 1870 may be enforced by him, and by him only. In Underwood v. Sutcliffe ( 77 N. Y., 58 ), it was held that a receiver appointed in supplementary proceedings could not maintain an action to enforce the trust created by 1 R. S., 728, section 52, in favor of the creditors of one paying the consideration for lands which are conveyed to another. And in Farnsworth v. Wood ( 91 N. Y., 308 ), it was determined that the receiver of a corporation organized under the general manufacturing act of 1848 was not vested with a right of action given by that act (§ 10, chap. 40). to creditors of the coi'poration against the stockholders thereof.

said—“The rights of certain creditors to prosecute their claims against certain' of the stockholders never were the property of the corporation nor rights of action vested in it, nor is there any provision of the statute

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which transfers these rights of action from the creditors to the receiver. The same observation applies to the act of 1870 which gives to the creditor a right of action for the -excess over and above the annual payment of $500 upon the policy. At the time of the commencement of this' action there was no vested interest in the policy or growing out of the policy in Richard Amerman. He could not maintain an action for any purpose predicate of it and it seems to be settled by authority that at his death his estate would have no interest in the policy unless in the contingency of the death of his wife and child.

The interest secured by the policy is atbest only a contingent interest for the estate of the assured dependent upon the death of the wife and children, and the trust, regarding it as such, created by the policy is one of which all parties might lose the benefit in case of a failure to pay the preminms necessary for its continuance. It is said in Fry on Specific Performance, § 72 that the court will not enforce a contract which is in its nature revocable by the defendant, for its interference in such a case would be idle, inasmuch ns what it had done might be instantly undone by one of the parties. And in Rust v. Conrad, ( 47 Mich. 449 ), the court on reversing a decree for specific performance said it would refuse to interfere in any case where if it were to do so, one of the parties might nullify its action through the exercise of a discretion which the contract or the law invested them with. The principle of this case seems to be eminently applicable here, in regard to the contingent interest of the estate of the assured in the proceeds of the policy if paid. The decree if the trust were not continued by the proper payments would be lost so far as anything to the contrary appears on the record.

The judgment appealed from should be reversed and the demurrer sustained with costs.

Van Brunt, Ch. J., and Daniels, J., concur.