Tuthill v. Goss — 69 N.Y. St. Rep. 454

Majority

p. 454

Benjamin Tuthill, on Behalf of Himself and All Others, etc., Resp’ts, v. Mary R. S. Goss et al., Individually and as Administratrix, etc., App’lts.

(Supreme Court, General Term, Second Department,

Filed July 26, 1895.)

Headnote

1. Fraudulent conveyance—Partnership.

In an action l)y a firm creditor to set aside a fraudulent conveyance of individual property made by a deceased partner in his life-time, it need not appear that the plaintiff’s remedy against the surviving partner had been exhausted.

p. 455

2. Husband and wife —Insurance.

The amount of premiums paid by a husband, in excess of five hundred dollars annually, for insurance on his life for the benefit of his wife, can be recovered on his death by his creditors in an action against her and his personal representatives.

Appeal from an interlocutory judgment, overruling a demurrer to the complaint.

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, ch. 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 be 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.

Galvin D. Van Name, for app’lts ; Thomas J. Bitch, for resp’t.

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.

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

p. 456

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. 876 ; 52 St. Rep. 873 .

Judgment for plaintiff on demurrer, with costs, with leave to-defendant to answer on payment of costs.