
    Hannah S. Brick, Resp't, v. Robert Campbell, App'lt.
    
      (New York Superior Court, General Term,
    
    
      Filed April 13, 1887.)
    
    1. Insurance (life)—Husband and wife—Policy for benefit of wife— Asssignment of—Laws 1873, chap. 821—Laws 1840, chap. 80.
    In an action brought to set aside an alleged assignment of certain policies of insurance upon the life of plaintiff’s husband, drawn in favor of the plaintiff, it appeared that at the time the said assignment was made by plaintiff she had a child living, which died subsequently, but before the commencement of this action. Held, that since the passage of Laws 1873, chap. 821, the statutes do not imply that the wife cannot assign insurance taken out under the Laws of 1840, chap. 80, as amended, payable to a. married woman, and in which children have no legal or equitable interest. In such a policy the wife during life is solely interested.
    2. Same—Laws 1873, chap. 821, applies to policies payable to married-women ALONE.
    The latter part of section 2, chap. 821, Laws 1873, was intended to apply to policies that are payable to the married woman alone as well as to the married woman and children, or to her or children.
    3. Same-'-Assignment must be acknowledged.
    The statute of 1873 intended that there should be no assignmen ithout its execution being acknowledged by the married woman as at the time was necessary to a conveyance to pass her dower right.
    4. Same—Assignable interest of married woman.
    
      Held, that the plaintiff in the lifetime of her children had a property interest in the property, which, in its nature, was assignable. , That there-was no objection to her making any grant of her interest which would not contravene the intent or policy of the statute which was that she should remain in possession of her interest while any child was living. But that she could not make any instrument on its face a grant which would operate as a grant during the lifetime of the children.
    5. Same—Estoppel—When wife estopped from questioning validity of-ASSIGNMENT.
    The plaintiff made an instrument, which on its face, was an assignment and delivered the policies, they being assigned as security for moneys that the defendant should thereafter pay on account of the husbands indebtedness. After the death of her children she allowed defendant to retain them for nearly two years, only having asked for the policies upon a claim that the purpose for which they had been given as security had been fulfilled. The assignment was not revoked, during the life of the children. Held, That the assignment became operative when there was no-living child, and the policies remained thereafter in the hands of the assignee with the consent of the wife. Ingraham, J., dissenting.
    6. Same—Wife policy—Not fraudulent as to creditors.
    It is legal and not fraudulent as to creditors for the husband to take out policies for the benefit óf his wife to a certain amount, or for the wife to take them out of premiums to a certain amount to he paid out of the. husband’s property
    
      Appeal by respondent from judgment entered upon findings at special term.
    The following is a brief description of the five policies in suit:
    Policy issued by the Mutual Life Insurance Company, dated July 31, 1872, and insures the life of E. A. Brick for $3,000. The policy, in terms, makes the insurance payable to the personal representatives and asigns of the husband.
    Policy issued by the same company upon the same life for $2,000, made payable to the plaintiff in July, 1888, or should her husband die before then to plaintiff, her personal representatives and assigns within sixty days after proof of such death.
    Policy issued by the Washington Life Insurance Company upon the same life for $4,000, made payable to the plaintiff on the 30th day of July, 1888, or should the insured die previous thereto, then to her personal representatives and assigns within sixty days after proof of such death.
    Policy of the New York Life Insurance Company issued upon the same life for $3,100, made payable to the plaintiff and her children, if said Brick dies within fifteen years, otherwise payable to Brick at the end of the fifteen years.
    Policy issued by the New England Life Insurance Company upon the same life for $2,000, made payable at Boston to plaintiff and her personal representatives at the expiration of fifteen years or sooner in the event of the insured’s death.
    All of the above policies were issued in 1872 and assigned by the plaintiff and her husband to the defendant in June, 1877.
    The relief demanded by the complaint was that the defendant re-assign and deliver five polices of insurance on the life of her husband, which had been assigned by her to the defendant.
    Judgment in accordance with the demand was entered after a trial.
    The opinion rests upon the construction of the following statute, chapter 851, Laws of 1873, p. 1234:
    “ § 3. Any policy in favor of a married woman or of her and her children, or assigned in her, or in her and their favor, on written request of said married woman, duly acknowledged before a commissioner of deeds, or other officer duly authorized to take acknowledgements of deeds in the same manner as required by law, to pass her dower right in lands of her husband, and on the written request of the policy-holder may be surrendered to and purchased by the company, issuing the same, in the same manner as any other policy. And such married woman may, in case she has no child or children born of her body, or any issue of any child or children born of her body, dispose of such policy in and by a last will and testament, or any instrument in the nature of a last will and testament, or by deed duly executed and acknowled before an officer authorized to take acknowledgements of deeds in the same manner as required by law to pass her dower right in lands of her husband, which disposition lawfully made shall invest the person or persons to whom such policy shall have been so bequeathed or granted and conveyed with the same rights in respect thereto as such married woman would have had in case she survived the person on whose life such policy was issued, and such legatee or grantee shall have the same right to dispose of such policy as herein conferred on such married woman.
    The instrument made by the plaintiff is claimed by the defendant to be a valid assignment of the policies, and was acknowledged in the manner required by the statute.
    
      George W. Van Slyck, for app’lt; Jacob F. Miller, for resp’t.
   Sedgwick, J.

Four of the policies assigned by the plaintiff were in terms payable to her executors, administrators, and not in any contingency to children. The choses in action were her separate property. In equity she had exclusively the power of disposition of her separate property in general when it was personal, if the grant of it to her or perhaps the nature of her interest in it did not express or imply a limitation of her power of disposition. Seymour v. Fellows, 77 N. Y., 178; Rawson v. Penn. R. R. Co., 48 id., 216, and other cases; Olmstead v. Keyes, 85 id., 593. The statutes of this state give- a legal power of disposition of separate property to a married woman. If there be a doubt as to whether these statutes comprise the case of a gift of the husband to the wife, there is no doubt that in equity she has the same power over such gifts as over any other kind of separate property.

In the instance of a policy of insurance of the life of a husband payable to the wife, the premiums being paid by the husband, there would be a question as to whether the nature of the gift as a provision for the wife after the husband’s death, did not limit her power to dispose of it in his lifetime. Beyond this, as against creditors, the husband would have no right to use his money in payment of the premiums if such use were fraudulent as to the creditors.

The statutes on the subject of these insurances made it legal and not fraudulent as to creditors for the husband to take out these policies to a certain amount, or for the wife to take them out, the premiums to a certain amount to be paid out of the husband’s property.

These statutes make no provision as to the wife’s power of disposition. They declare that the policies in favor of the wife shall be her sole property.

The courts have held in Eadie v. Slimmon (26 N. Y., 15), and the cases that follow it, that it was an implied intent of the statutes that the wife should not assign insurances taken out under the statute.

Since the act of 1873, chap. 821, p. 1235, the statutes do not imply this intent in respect of a policy made payable to the married woman, and in which children have no legal or equitable interest.

In such a policy the wife, during life, is solely interested. Olmstead v. Keyes, supra. If a married woman, provided she have no children living at the time, can assign a policy payable to her and partly or contingently to children, there can be no room for arguing that the implied prohibition, against assigning when there is a child living, is made for her benefit. The benefit to children, which the statute relates to, is of the slightest possible kind.

There is no provision which contemplates that the widow, on the death of the husband, shall use, for the benefit of children, any part of the money her sole property collected from the policy.

The doubt that the latter p>art of the section was intended to apply to policies that are payable to the married woman and children, or to her or children and not to policies payable to her alone, cannot be entertained under the decisions as I understand them.

In Brummer v. Cohen (6 Abb. N. C., 409), the policy was made payable to the wife or her executors, administrators and assigns. There were no children living at the time of the action, and these children were in being at the time of the assignment. The court, in the first instance, held that the property was unassignable, and that, as the plaintiff had children at the time she assigned the policy to the defendant, the act of 1873, chap. 821, did not help the assignment.

The court of appeals said in the case: “The legislature in conferring, by subsequent acts, a limited power of assignment, have recognized the policy attributed to the legislature of 1840. (Ch. 821, Laws of 1873; chap. 248, Laws of 1879.)

The assignment in this case was not within the authority conferred by these acts.

It is proper to state here that it may be assumed that the statute of 1873 intended that there should be no assignment without its execution being acknowledged by the married woman as at the time was necessary to a conveyance to pass her dower right.

If there is no difference between this case and that of Brummer v. Cohen the plaintiff has a right to a judgment that the assignment made by her was invalid. In the present case the difference of fact is that while at the time of the assignment there were children they had afterward died and before the action.

Was it possible for her to make a valid assignment, which might bind her, which would not operate during the lifetime of the children, but upon their death would operate as an assignment ?

It seems clear that in their lifetime she had a property interest in the policy which in its nature was assignable.

There was no objection to her making any grant of her interest, which would not contravene the intent or policy of the statute, which was that she should remain in possession of her interest while any child was living.

But she could not make any instrument, on its face, a grant which would operate as a grant during the lifetime of the children. The plaintiff did make an instrument which, on its face, was an assignment. If, after the death of the children, she should reaffirm this and then, procuring the piece of paper on which the chose in action was written, deliver it to the assignee named, there would be no doubt in the case.

The instrument would be at heart what is called a precedent declaration, which would be effective as a grant upon the policy coming to the assignee after the death of the children. McCaffrey v. Woodin, 65 N. Y., p. 462, et seq.

The notes to Ryall v. Rowes, W. & F. Leading Oases in Eq., 2nd vol., 1611, illustrates this principle.

It is assumed that during the life of the children she might by act or verbally annul the instrument so that it would cease to be effective. The judge below found that on or about the 29th day of May, 1880, and at several other times before the commencement of this action, the plaintiff demanded the retransfer and redelivery of the said policies to her. The testimony shows that the demand referred to was made by the husband of the plaintiff. He did not use the word demanded. He asked for the policies, and said it was about time they were given up, about time they were surrendered.

The connection in which this testimony was given shows that this was not a denial of the efficacy of the assignment, but a claim that the purpose for which it had been given as security had been fulfilled. The policies were to be surrendered because the debt, to secure which, as the witness assumed, had been paid. There. was no" other demand made until July, 1884 after the death of the children.

The facts were as the judge "has found, that the considertion of the assignment was the assumption by the defendant of the obligations of the husband, and the assignment was made as security for the defendant’s reimbursement of any sums he should pay under the assumption; that the defendant had paid on account of these obligations, for which he had not been reimbursed, a sum exceeding the face value of the policies, that is $14,100.

It is the fact that after the death of the children the policies were not redelivered to the defendant. They remained from the assignment in the possession of the defendant. If they remained so for any time with the plaintiff’s consent, under her claim to them the assignment became finally operative. The taking and giving them again would have been a mere form. It is not necessary to decide that the defendant could not against the wish of the plaintiff have held the policies and subjected them to the operation of the assignment. So far as that is referred to by the testimony, the indications are that the plaintiff assented to the possession by the defendant under the assignment, after the death of the children.

These indications are the nature of the assignment, which was never revoked nor recalled during the lifetime of the children, the not revoking the assignment and the usual obligation on her part growing out of the payments made by the defendant, as she had in fact requested, which would be a motive to her to assent to his holding the policies after the death of the children. The presumption of fact would be that she acted in accordance with the motive until there was evidence that she ceased to be influenced by it. In June, 1884, she first made a demand. From January, 1882, no child was living. The inference is that in the intervening time she had assented to the claim of the defendant and that the policies were then effectively assigned.

The facts that have been stated disclose that the policies were not assigned as security for an antecedent indebtedness of the husband to the defendant but for moneys that the defendant should thereafter pay on account of the husband’s indebtedness.

Another policy was payable to the plaintiff “for her sole use if living in conformity with the statute and if not living, to the children of said person whose life is hereby insured, or their guardian for their use.” The statute that has been examined does not say, and probably does not imply that an assignment by the wife at the time when there is no child living, would cut off the interest in the policy, which by the terms of the contract might belong to a child after the death of .the husband and born .after assignment. It permits in the case provided that the wife may assign. The interest passing would be such as would be ascertained by her living after her husband’s death. The reasoning that has been applied to policies payable solely to the wife is properly applicable to this policy. The assignment of it became operative when there was no living child and the policy remained thereafter in the hands of the assignee with the consent of the wife.

For these reasons I am of the opinion there should be a new trial.

Judgment reversed and new trial ordered, with costs to abide the event.

Freedman, J. concurs.

Ingraham, J.

(dissenting). It is settled in this state by the case of Olmstead v. Keyes (85 N. Y., 600), that one to whom a policy of life insurance is payable or to whom such policy has been assigned, may with the consent of the insurer, deal with a valid life policy as he can with any other chose in action, selling it, assigning it, disposing of it and bequeathing it by will except so far as such transfer is prohibited by statute.

It is also settled that chapter 80 of the Laws of 1840, as amended, prohibits the assignment of policies of insurance issued under the povisions of section 1 of that act except as such transfers are allowed by section 2 of the act as amended by chapter 831 of the Laws of 1873. An assignment of such policy is, therefore, void unless made in compliance with the terms of the second section of that act. Barry v. Equitable Life Assurance Co., 59 N. Y., 592; Brummer v. Cohen, 6 Abb. N. C., 411.

A policy of insurance which insures the life of a married man for the benefit of his wife or in case of death before the decease of her husband for the benefit of her children is a policy issued under the provisions of section 1 of the act of 1840, and can only be assigned or transferred as allowed by section 2 of the act.

The policies, Exhibit A, New York Life Insurance Company, for $3,100; Exhibit C., Mutual Life Insurance Co., for $2,000, and Exhibit E., Washington Life Insurance Co., for $4,000, were plainly issued under the statutes above named. The insurance is to be paid to the wife of the person whose life is assured and the prohibition contained in the statute applies. i

The power to assign these policies must be found, if it exists, in section 2 of the act. That section provides that “any such married woman may, in case she has no child born of body, or any issue of any child or children born of her body, dispose of sucli policy.”

In order to make such assignment valid, therefore, it must appear that such married woman to whom the policy was payable at the time of the execution of the assignment had no child or children, or issue of any child or children, and if such fact does not appear, the authority given by the section to make a transfer of the policies does not apply.

The fact that subsequent to the assignment of such a policy, a child living at the time the assignment was executed, was dead, would not validate the assignment void, when made.

The grounds upon which the prohibition has been applied, “ that the fact was special and peculiar and looking to a provision for a state of widowhood or orphanage, and that it would be a violation of the spirit of the provision to hold that a wife under that act could sell or traffic with her policy as though it was her personal property or ordinary security for money. Barry v. Equitable Ass. So., supra.

I think it would be as clearly opposed to the spirit of the statute to allow assignments or transfers to be made the validity of which would depend upon the death of children of the person for whose benefit the policy was made, and the terms of the amendment of 1873 is explicit that a transfer can be made in case there should be no child.

There is nothing in this case that would estop the plaintiff from claiming that the assignments are void. It does, not appear that defendant paid anything on the faith of the assignment of these policies after the death of the child, or that he had suffered in any way by the failure of the plaintiff to sooner assert her claim.

. I am of the opinion, therefore, that the assignment of the policies marked Exhibits A, C‘and E were void, and that so far as the judgment directs the re-assignment of such policies to the plaintiff, the judgment should be affirmed. As to the policy, Exhibit B, it was issued by a Massachusetts corporation, dated at Boston, Mass., payable at Boston, Mass., and provides that the contract should be governed and construed by the laws of Massachusetts.

As to Exhibit D, the policy is made payable to R. A. Brick, the plaintiff’s husband, or his representatives. The-policy is not payable to the plaintiff and does not comply with the terms of the act of 1840.

It is clear that an assignment of that policy to the plaintiff by her husband, fraudulent as to creditors, would not be protected by the terms of the act of 1840.

It is very clear from this provision that this policy could not have been issued in compliance with the act of 1840, and the prohibition contained in that act does not, therefore, apply. These policies, therefore, come under the rule as laid down in Olmstead v. Keyes (supra), and are assignable.

I am unable, therefore, to agree with the chief judge that the assignment of all the policies was invalid.

The judgment should be reversed, and a new trial ordered, as to the policies marked Exhibits B and D, but the judgment should be affirmed as to the three policies, Exhibits A, C and E.  