82 N.Y.S. 302 | N.Y. App. Div. | 1903
The plaintiff, claiming to be a creditor of J. Prevost Mason, deceased, brings this action in behalf of itself and all other creditors, pursuant to the provisions of section 7 of the Personal Property Law (Laws of 1897, chap. 417), to have an assignment of two polieiés of insurance upon the life of the decedent to his wife declared void as against his creditors upon the ground that at the time of making the same he was insolvent, and that the assignment was made in fraud of the rights of his creditors. The decedent for many years prior to the 12th day of January, 1901, was a note teller in the employ of the plaintiff, liis salary at that time being $1,800 per annum. The plaintiff contends that on or prior to that day he misappropriated $12,000 of its funds. At that time he held two policies of insurance upon his life, one for $8,000 and another for $2,000, payable to his executors, administrators or assigns. On the 12th day of January, 1901, the decedent, in the presence of his wife, admitted to officers of the plaintiff that he had taken funds of the bank to the extent of $12,000, used the money for the support of his family, and in effect that he was insolvent, and on the following day made a like admission in the presence of his wife to officers of the defendant surety company, which was surety for his conduct to the bank. On the sixteenth day of the same month he was arrested for the defalcation, and admitted to bail on the nineteenth, pending his examination before a United States commissioner. Three days later the insurance company made a notation upon each of the policies of Insurance as follows : “ At the request of the insured this policy is made payable to Nettie H. Mason, his wife, if she is'living at the time of the death of the insured, otherwise to Grace E. Mason, his daughter.” On the first day of February, thereafter, he committed suicide by shooting himself in his bedroom at home. Between the date of the assignment of the policies and his death no premium fell due upon either, and his wife paid none of the premiums. The surety company paid $7,000 to the bank and asserts the right to be subrogated to that extent to the claim of the bank, and for that reason was made a party defendant. The insurance company
The appellant urges a reversal of the judgment setting aside the assignment of the insurance policies to her and directing the payment of the proceeds thereof to the creditors of the decedent upon three grounds, which will be considered in t.he order stated, viz.: First, that it has not been shown that the plaintiff is a creditor of the decedent; second, that prejudicial errors were committed in the - reception of evidence; third, that the plaintiff has failed to show fraud or want of consideration for the assignment.
First. The indebtedness of the decedent was shown both by his declarations and by records of the bank kept by him or under his direction. It. was his duty, among other things, to collect drafts of customers of the bank deposited for collection and payable elsewhere than in the city of New York. It was shown that he made false entries in the books of the bank, crediting himself with $12,000 purporting to consist of four out of town drafts received for collection. It appears that the customers of the bank from whom, according to his entries, the drafts were received, deposited no such .drafts for collection, and he was not charged with the receipt of the drafts for which he thus gave himself credit. This evidence, which was all manifestly competent, established jprima facie that the entries crediting him with these drafts were false and fictitious, and were made for the purpose of apparently balancing the account and covering up his misappropriation of $12,000 by the false credit of a like amount.
Second. As a further item of proof on this subject, a letter book of the bank was received in evidence for the purpose of showing that it contained no entry relating to the forwarding of those drafts for collection. This letter book was not kept by the decedent and it was received in evidence under appellant’s objection and exception. It appeared that, according to the usual course and custom of the plaintiff, when drafts were forwarded for collection they were inclosed with letters of advice which were copied in the letter book. The duty of writing such letters devolved upon the decedent, and he had the supervision, if not actual charge, of this branch of the
Third. The assignment of the policies was apparently voluntary. No consideration was recited, and the circumstances under which it was made fairly justify the inference that it was made in contemplation of the suicide and for the purpose of putting the insurance beyond the reach of his creditors. The decedent was married, and his daughter, to whom in the event of the death of his wife, he finally directed that the policies should be paid, had been born before either of the policies had been taken out. One of the policies was issued in 1881 and the other in 1888, and both were originally made payable to his estate, and so remained until after the discovery of this defalcation and his arrest therefor. Pending the examination of the criminal charges against him he ordered the change of beneficiaries and took his own life. These events occurred in such rapid succession that in the absence of any other explanation they fairly justify the inference that the decedent, contemplating the act which he shortly thereafter committed, knew that if the policies remained payable to his estate the insurance would go to his creditors, and for the purpose of averting that and leaving them without redress he directed the change of beneficiary. The fact that no letters of administration have been taken out upon his estate tends, with the other facts, to show his insolvent condition.
The case is not, we think, distinguishable in principle from those holding that wdiere a transfer of property made by a debtor is set aside on the ground of fraud at the instance of his creditors, their rights attach not merely to the value of the property prior to the assignment, but to the property itself, including appreciation or increase in value. (Gillett v. Bate, 86 N. Y. 87; Warner v. Blakeman, 4 Abb. Ct. App. Dec. 530.)
It follows that the judgment should be affirmed, with costs.
Van Beunt, P. J., O’Brien, Ingraham and McLaughlin, JJ., concurred.
Judgment affirmed, with costs.