Cushman v. Family Fund Society — 28 N.Y. St. Rep. 757

Majority

p. 757

Florence Cushman, an Infant, Pl’ff, v. The Family Fund Society, Def't.

(City Court of New York, General Term,

Filed January 29, 1890.)

Headnote

Insurance (life)—Assignment—Jurisdiction.

Deceased assigned his life policy as security for certain notes of a less amount, and upon his death the assignee collected the amount of the notes of defendant. Held, that this court had jurisdiction of an action to compel the payment of the balance of the policy, and that a dismissal on. the ground that the court could give no relief as it had no equity power, was erroneous.

Motion for new trial on exceptions.

William H. Cushman, in his lifetime, became a member of the defendant’s society, and, in consideration of certain payments, the defendant delivered to him its bond, whereby it bound itself to pay, within sixty days after the receipt by it of satisfactory evidence of the death of said Cushman, the sum of $5,000 to his per

p. 758

sonal representatives. Cushman borrowed $3,000 from one Engleman and.transferred to him as security for the loan the aforesaid policy. Cushman thereafter died and. Engleman collected from the defendant the amount of his loan, surrendering at the time the. notes the transfer was intended to secure. The widow of Cushman administered upon his estate, and by direction of the surrogate assigned to the plaintiff a one-third interest in the policy, intending thereby to transfer the one-third interest remaining after the payment of Engleman’s loan. Upon the trial the complaint was dismissed upon the ground that this court, having no equity power, could grant the plaintiff no relief, and the justice presiding directed that the exceptions be heard in the first instance at general term.

A. Prentice, for pl’ff; Geo. Wilcox, for def’t.

This court certainly had jurisdiction of the subject matter of the action, and it was not objected by the defendant in its answer that a court of law could not grant the relief necessary to a recovery, nor was it objected that the presence of other parties was necessary to a complete determination of the controversy. The transfer to Engleman, though absolute on its face, was clearly proved to have been delivered as security only, and lie himself acted upon this theory when he surrendered the policy, assignment, and the notes it was given to secure, upon receiving the amount of his advances with interest. He did not claim the entire $5,000, but only his interest in it, to wit: the amotmt of his loan, and this is all he received. The evidence, coupled with the acts of Engleman and the defendant, make it clear that the assignment was delivered merely as security, and its purpose was fully answered when the loan was repaid. It thenceforth ceased to be effective for any other purpose. It, figuratively speaking, stepped out of the way, and no longer impeded Cushman’s representatives from asserting their rights to their share of the policy. It did not require that a court of equity should decide that the assignment was intended as security only, for all the parties in interest acted upon that assumption, and there was no question for a court of equity to determine.

There was no fraud and no mutual mistake requiring correction. All that remained for the defendant to do was to settle with the legal representatives of Cushman for their share of the policy. The defendant failed to perform this duty, and the machinery of a court of justice was found necessary to coerce payment. We have failed to discover any defect of jurisdiction which disables this court from doing the same substantial justice in this case it affords in any other. The main contention, after all, is the purpose for which the assignment was delivered, and it is always competent for a court of law to determine the conditions upon which an instrument is delivered. For these reasons the exception to the dismissal of the complaint will be sustained, the non-suit set aside, and a new trial ordered, with costs to the plaintiff to abide the event.

• Me Adam, Ch. J., and McGowu, J., concur.