
    Chelsea Exchange Bank and Max S. Grifenhagen, as Sheriff of the County of New York, Respondents, v. The Travelers Insurance Company, Appellant.
    First Department,
    July 10, 1916.
    Attachment—pleading — complaint in aid of attachment to reach cancellation value of lapsed life insurance policies — right of judgment creditor to proceeds of policies — remedy for defect of parties plaintiff — demurrer. 6
    Where a complaint, in an action in aid of an attachment and to reach the “ cancellation value ” of certain life insurance policies on the life of the judgment debtor, reserving the right to change the beneficiaries therein, alleges that at the time of the lapse of the policies for failure to pay premiums thereon there remained a “net equity” of a certain amount, but contains no allegation as to the manner in which said amount was arrived at, nor any provision of the policies quoted under which that or any other sum became payable to the insured upon the lapse of the policies or by which the interest of the beneficiary therein ceased or became extinguished, and there is no allegation from which it can be found that defendant insurance company is under a present legal duty to pay any one any sum whatever, and it does not appear in whose possession the policies are or that they can be surrendered to the defendant, the complaint does not state a cause of action.
    The rule that a trustee in bankruptcy succeeds to all the rights of the bankrupt in life insurance policies, including the reserved right to change the beneficiary, does not apply to a single judgment creditor who can only reach the insured’s property.
    Where a defect in parties plaintiff appears upon the face of the complaint the proper remedy for the defendant is to demur. It is only where such defect does not appear on the face of the complaint that the objection may be taken by answer. Such objection is waived only when it is taken neither by demurrer nor answer.
    A plaintiff cannot demur to part of an answer only.
    A demurrer searches the record for the first fault in pleading, and reaches back to condemn the first pleading that is defective in substance, because one who does not so plead as to invite an issue cannot compel his adversary to so plead as to accept it.
    Appeal by the defendant, The Travelers Insurance Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 8th day of March, 1916, sustaining a demurrer to the first separate defense contained in the answer on the ground that it is insufficient in law.
    
      William J. Moran, for the appellant.
    
      W. W. Shaw, for the respondents.
   Dowling, J.:

This is an action in aid of an attachment. The complaint sets forth that in an action brought in the Supreme Court, New York county, by the Chelsea National Bank against Alfred H. Motley, Jr., a warrant of attachment was duly issued on September 16, 1914, in the sum of $1,101.25 which was duly served on defendant, the property levied upon consisting of an indebtedness of defendant to said Motley in the sum of $1,281.63, “being the cancellation value of two certain policies issued by The Travelers Insurance Company upon the- life of Alfred H. Motley, Jr., being numbers 128565 and 164700, respectively, and a demand upon said defendant The Travelers Insurance Company for a certificate from it showing the property claimed or indebtedness owing from the said The Travelers . Insurance Company to the said Alfred A. Motley, Jr.” It is further alleged: “That in response to said service of warrant of attachment and demand said defendant The Travelers Insurance Company duly made and delivered to the said Sheriff a certificate setting forth that the said defendant then held the sum of about $1,281.63, being the cancellation or surrender value of two certain life insurance policies upon the life of said Alfred H. Motley, Jr., but claiming, however, that said property did not belong wholly to the said Alfred H. Motley, Jr. A copy of said certificate furnished by the said defendant to the said Sheriff of the County of New York is hereto annexed, marked Exhibit ‘A’ and made a part hereof, as though incorporated herein.” The various steps taken in the action are then recited, culminating in judgment against Motley on December 14, 1914, and the issuance of execution to the sheriff of the county of New York, which still remains in his hands and is as yet unsatisfied. The complaint then sets forth the issuance of the two policies of insurance by the defendant on the life of said Motley, copies of which are annexed to and made a part of the complaint. By the first of these the principal was made payable to Lucy B. Motley, the wife of the insured, as beneficiary, or to such other persons as might be designated by the insured, as provided in said policy, and in the event of the prior death of the said beneficiary or any other designated beneficiary, then the amount of said policy should be paid to the executors, administrators or assigns of the insured. Motley changed his beneficiary so as to make the policy payable directly to his executors, administrators or assigns, and thereafter again changed it so as to make it payable to Lucy B. Motley, the wife of the insured, with the proviso, however, that if the death of the said beneficiary should occur' prior to that of the insured, then such insurance should go to the executors, administrators or assigns of the insured. In and by such designation the right was also reserved to revoke said designation, and, subject to the consent of the company, to nominate a new beneficiary. It is then alleged: “ That in and by said policy second above mentioned marked Exhibit ‘0,’ dated March 1st, 1906, it was provided that the principal thereof should be paid to the executors, administrators or assigns of the insured. That thereafter and on or about the 4th day of March, 1908, the beneficiary named in said policy was thereafter changed by the insured with the consent of the defendant herein, whereby said policy was made payable directly to Lucy B. Motley, the wife of the insured, with the proviso that if the said beneficiary should die before the insured that then the policy should be paid to the executors, administrators or assigns of the insured. That in and by said designation the right was also reserved to the insured to revoke said designation, and, subject to the consent of the company, to nominate a new beneficiary. ”

“17. That in the month of July, 1913, both of said policies above mentioned lapsed because of the failure on the part of the insured to pay the premiums due thereon, and that thereafter and on or about the 28th day of July, 1914, said policies were both duly cancelled by the said The Travelers Insurance Company, at which time there remained a net equity of $744 on the policy number 128565 first above mentioned and a net equity of $537.63 on the policy No. 164700 second above mentioned.

“ 18. That the sum of $1,281.63, being the cancellation or surrender value of said policies above mentioned remains in the hands of the defendant and is now held by it.

1 ‘ 19. That by reason of the cancellation of said policies of life insurance upon the life of Alfred H. Motley, Jr., as aforesaid, the said defendant, The Travelers Insurance Company, on or about the 28th day of July, 1914, became indebted to the said Alfred H. Motley, Jr., in the sum of $1,281.63, and was so indebted to the said Alfred H. Motley, Jr., on the 16th day of September, 1915, at the time of the service upon it of the attachment in the action of Chelsea Exchange Bank against Alfred H. Motley, Jr.”

The certificate of defendant, given on the service of the attachment, annexed to the complaint as Exhibit “A,” shows that both the policies in question lapsed for failure to pay the premiums thereon and were canceled on July 28, 1914, “ at which time there remained a net equity of $744 under No. 128565 and a net equity of $537.63 under No. 164700. That there is nothing due by this Company solely to the said Alfred H. Motley, Jr.”

The copies of the policies attached to the complaint as Exhibits B and C contained provisions, in case of default in payment of premiums after the second year, for the automatic extension of insurance for certain terms, and for paid-up policies upon surrender of the original policies; they also contained tables showing, for the end of each year of the policies’ life, the term of such automatic extension, the amount of paid-up insurance obtainable, the cash surrender value and the loan value. The complaint is entirely silent upon the manner in which the so-called “net equity ” in the policies was arrived at, nor is any provision of the policies quoted under which that, or any other sum, became payable to the insured upon the lapse of the policies, or by which the interest of the beneficiary therein ceased or became extinguished. There are no allegations in the complaint from which it can be found that defendant is under a present legal duty to pay any one any sum whatever. It does not appear from the complaint in whose possession the policies are, or that they can be surrendered to the defendant. For aught that appears in the complaint the beneficiary, LucyB. Motley, still has an interest in the policies and is a necessary party to any determination of the rights of the parties in and under them. The cases cited by plaintiffs arising in bankruptcy cases have no application here, for in the former the trustee in bankruptcy succeeded to all the rights of the bankrupt, including the reserved right to change the beneficiary, which is not the case here, where plaintiffs can only reach the insured’s property and the wife is still the designated beneficiary.

The defendant, for a first, separate and complete defense, repeating all the denials of its main defense, set up: “That there is a defect of parties herein in that neither the assured nor the beneficiary under the policies referred to in the complaint herein has been made a party to this action.” To this separate defense the plaintiff demurred for insufficiency. As the defect in parties plaintiff appeared upon the face of the complaint the defendant’s proper remedy was by demurrer. (Code Civ. Proc. § 488, subd. 6.) It is only where that defect does not appear on the face of the complaint that the objection may be taken by answer. (Id. § 498.) The objection is waived only .when it is taken neither by demurrer nor answer. (Id. § 499.) But the plaintiffs are in no position to raise the question by demurrer to the separate answer, as the latter incorporates denials which make it proof against demurrer and the plaintiffs cannot demur to only a part thereof. (Wiener v. Boehm, 126 App. Div. 103.) Furthermore “the rule is that on demurrer to an answer for insufficiency the defendant may attack the complaint on the ground that it does not state facts sufficient to constitute a cause of action. * * * A demurrer searches the record for the first fault in pleading and reaches back to condemn the first pleading that is defective in substance, because he who does not so plead as to invite an issue cannot compel his adversary to so plead as to accept it.” (Baxters. McDonnell, 154 N. Y. 436; Parker Co. v. City of New York, 110 App. Div. 360.) As the separate defense incorporated denials which made it good against demurrer and as the complaint herein does not set forth a good cause of action against defendant, the order appealed from will be reversed, with ten dollars costs and disbursements, and the demurrer to the. separate defense overruled, with ten dollars costs.

Clarke, P. J., McLaughlin, Laughlin and Scott, JJ., concurred.

■ Order reversed, with ten dollars costs and disbursements, and demurrer overruled, with ten dollars costs, with leave to plaintiff to withdraw demurrer on payment of costs.  