Clark v. Lynch — 65 N.Y. St. Rep. 68

Majority

p. 68

Brackett H. Clark, Resp’t, v. Veronica Lynch, App’lt.

(Supreme Court, General Term, Fifth Department,

Filed December 27, 1894.)

Headnote

Insurance—Benefit—Exemption,

The fund, received by the widow of a deceased" member of a beneficiary society is exempted from debts contracted after, as well as those contracted before, the fund is received.

Appeal from an order in supplementary proceedings.

George H. Thomas, for app’lt; Myron' T. Bly, for resp’t.

The defendant’s husband was a member of the Ancient Order of United Workmen,—a fraternal society organized by chapter 74 of the Laws of 1877. Her husband’s life was insured by said society for the sum of $2,000. ■ The defendant was named in the policy as sole beneficiary. Her husband died,- and she received the fund in April, 1892. Thereafter the defendant contracted a debt to the plaintiff for the rent of a dwelling house, and he recovered a judgment therefor against defendant. On the return of an execution unsatisfied, proceedings supplemental to execution were instituted upon the judgment, and upon examination of the defendant it was disclosed that she then had in her possession a part of the fund she received from the society; and the county judge of Monroe county ordered her to pay the judgment and costs of the proceedings out of said money, and from said order this appeal was taken.

It is the contention of the appellant that the money was by law exempt from execution. The act by which said societjr was incorporated provided that the beneficiary fund should be exempt from execution, and should not be liable to be seized, taken, or appropriated, by any legal or equitable process, to pay any debt of the deceased member. It was held by this court in the case of Bolt v. Keyhole, 30 Hun, 619 , that money received from this same society by a widow of dne of its members, who was named as beneficiary, was not

p. 69

exempt from the claims of her creditors. The decision was made in October, 1883, and the following winter chapter 116 of the Laws of 1884 was passed, which extended the exemption to the beneficiary fund paid the widow, as to her debts. A general act providing for the organization of fraternal beneficiary societies was passed in 1889. Laws 1889, c. 520. It contained a provision permitting any such society theretofore incorporated to reincorporate under said act. It contained a like provision as to exemption as the act of 1884. The United Workmen’s Order never reincorporated under the act of 1889. Article 7 of the general insurance law of 1892 (chapter 690) also provided for the incorporation of such societies, and for the reincorporation of societies theretofore incorporated. Section 292 provided that the provisions of the act, so far as they were substantially the same as those of the laws existing on September 30, 1892 (the day before the act of 1892 took effect), should be construed as a continuation of such laws, modified or amended according to the language of the act of 1892, and not as new enactments, and should be applicable to all corporations formed under laws repealed by said act The acts of 1884 and 1889, above referred to, were repealed by the act of 1892, but,, as we have seen, the provisions of said acts, as to exemption, were retained in force. The 1892 act contained a like exemption as the former acts referred to. The defendant coming into possession of the fund when the acts of 1884 and 1889 were in force, she was entitled to the benefit of their provisions, which, as we have seen, exempted the fund from the claims of her creditors, as well as those of her deceased husband. The exemption provided for was general in its terms. It exempted the fund from execution for the debts of the widow, no matter when or how contracted.

It is suggested that, if it is exempt as to the debts contracted prior to the time the fund is received, the exemption should not be extended to debts thereafter contracted. If such a distinction is to be made, the reason for it is not found in the language of the statute. Its language is clear and explicit,—“any debt or liability.” The purpose of the statute was to afford protection to the widow and children of the member at a time when they were likely to especially need assistance. It-being a beneficiary statute, it should be liberally construed to effectuate the intention of the legislature.

It is suggested that such a construction will be likely to work injustice to creditors, who may extend credit relying upon the fact that the widow has the fund. Hot so. If the fund is exempt, the creditor would not be likely to be deceived, and give credit upon the strength of it, knowing that he is helpless to reach it.

Our attention has not been called to any case where this precise question has been adjudicated. Analogous eases have arisen under the law exempting pension moneys (§ 1393 of the Code of Civil Procedure). The following cases sustain our conclusions : Youmans v. Boomhower, 3 Thomp, & C. 21; Holmes v. Tallada, 125 Pa. St. 133 ; Stockwell v. National Bank, 36 Hun, 583 ; People v. Williams, 6 Misc. Rep. 185 ; 56 St. Rep. 897

p. 70

People ex rel. Breed v. Wells, 10 Misc. Rep. 195 ; 63 St. Rep. 758 .

We are of opinion that the fund was exempt, and this leads to a reversal of the order. The order appealed from should be reversed, and the motion denied, with $10 costs and disbursements.

All concur.

Cases cited

People ex rel. Scott v. Williams 6 Misc. Rep. 185 N.Y. Sup. Ct. p. 69
People ex rel. Breed v. Wells 10 Misc. Rep. 195 N.Y. Sup. Ct. p. 70