Friedlander v. Mahoney

| Iowa | Apr 19, 1871

Day, Ch. J.

— Mrs. Friedlander being indebted to J. K. Graves, assignee of the Greenwalds, in a large amount, which was secured by mortgage upon a stock of goods, for the purpose of preventing a sale of the goods in discharge of the debt, assigned to said Graves, in payment of his demand, the policies, which she held upon the life of her husband. The effect of this assignment was to satisfy the claim of Graves, release the stock of goods and re-invest Mrs. Amalie Friedlander with the legal title thereto. She was eo instante entitled to an assignment of the goods to herself, or to have a satisfaction of the mortgage entered upon the records. Had either been done, the goods would have become liable for her debts, and a conveyance of them, without consideration, and for the purpose of defrauding creditors, would have been set aside. After the payment of his debt, Graves had no more control over the goods. They became subject to the disposition and control of Amalie Friedlander. She directed a conveyance of them to A. Levi, in trust for her infant children, Samuel and Louis Friedlander. There is no pretense that fhere was any consideration for this conveyance. The purpose avowed by all parties at the time was to place the goods beyond the reach of the creditors of Amalie. The plaintiffs were present at the transaction, and were aware of its object.

If Mrs. Friedlander had obtained a satisfaction of the mortgage on the records, to which she was clearly entitled, and had then, without consideration, conveyed the property to her minor sons, it would not, perhaps, be seriously questioned that the sale would be set aside at the suit of a creditor of Mrs. Friedlander. Yet this is exactly what, in legal effect, was done. It cannot be successfully maintained that the subterfuge to which resort was had of the release of Mrs. Friedlander to Graves, and the transfer, by Graves, of the goods to Levi, as trustee of Samuel and Louis Fried-lander, affected, in any respect, the legal status of the parties. It is not the policy of the law to uphold evasions, or aid in the consummation of tricks, and it would bring a just reproach upon its administration if its just doctrines, grown venerable through the concurring assent of centuries, could be so easily annulled.

• It is claimed that' the court erred in instructing the jury that the policies of insurance in favor of Amalie Fried-lander; on the life of her husband, were not exempt from the payment of her debts, and in refusing to give, at the instance of plaintiff, an instruction embodying the converse doctrine. It follows, from the views above expressed, that the question-, of the liability of these policies, at the time of this transaction, for the debts of Amalie Fried-lander, is not material. They were, by express stipulation, made the subject of assignment. Such assignment was made, the result of which was a revesting of the title of the goods in Mrs. Friedlander. Conceding that the policies were not liable for her debts, it by no means follows that the goods were, to the same extent, exempt. If the head of a family should exchange his homestead, or the team with which he habitually earns his livelihood, for articles of merchandise, would they remain exempt from liability to the payment of his debts 2 If not, upon what principle is this stock of goods exempt 2 If there was any error in giving the instructions complained of, and in refusing the other (which we do not, however, determine) it was error without prejudice, and does not constitute a ground for reversal.

It is further insisted that the court erred in giving the following instruction, asked by defendant: “ The policies of insurance show on their face that they were procured by Amalie Friedlander, on the life of her husband, Herman Friedlander, for her benefit, and that the premiums were paid by her. There being no evidence to the contrary, you are to regard the policies of insurance as her property, and if you believe that Mr. Graves received the policies in payment and satisfaction of the Greenwald mortgage, then the mortgaged goods reverted to Amalie Friedlander, and became liable to the payment of her debts.” The objection urged to.this instruction is, that it assumes as a fact that all the premiums were paid by Mrs. Freidlander, and that the policies were her property. The remarks made in regard to the ’former instructions apply in part to this. That the insurance was effected for the benefit of Mrs. Friedlander appears from the face of the policies. There is no evidence of an intention on the part of her husband to deprive her of the benefits of the same. He was present at the time the assignment of them was made, and concurred in the arrangement. With his assent they were used in payment of a debt of Mrs. Fried-lander. Graves accepted an assignment of them, which operated to discharge Mrs. Friedlander’s goods from the lien of a mortgage. This release, so far as these defendants are concerned, is just as effective, and is attended witb. tbe same results, upon tbe theory that tbe premiums were paid by Herman as that they were paid by Amalie Friedlander. If it be conceded that this instruction contains an unwarranted assumption of fact, it worked no prejudice to defendants.

This view disposes of tbe errors insisted on in tbe argument. In our opinion tbe action of tbe general term, reversing tbe judgment of tbe district court, was erroneous.

Tbe judgment appealed from is

Reversed.