13 N.Y.2d 82 | NY | 1963
The question presented is whether the proceeds of a standard fire insurance policy insuring the interest of plaintiff wife and defendant husband as tenants by the entirety of real property must be divided at the demand of one of the owners or are impressed in equity with the inseverable quality of the ownership of the realty against whose loss they are payable.
The unity of person of husband and wife by reason of which we have entireties in realty is only an historical and not a functional explanation and itself gives no clue to the relationship that ought properly to obtain between the owners of the proceeds of insurance of such an interest. But if we must take the nature of the estate these parties had in the realty as we find it, so must we take the rule that there can be no holding by the entirety in personalty (Matter of Albrecht, 136 N. Y. 91; Matter of McKelway, 221 N. Y. 15; Matter of Blumenthal, 236 N. Y. 448). Both the proceeds and the contract under which they were paid are personal property (Brownell v. Board of Educ., 239 N. Y.
. Respondent and the courts below rely on the rule applied in Matter of City of New York (Jamaica Bay) (252 App. Div. 103) in which a condemnation award for real property held by the entirety was made during the life of both owners but the husband died before payment thereof. The Appellate Division held that the wife was entitled to the full award by right of survivorship on the ground that the involuntary conversion from real property to an award of personal property should not affect the right of survivorship in the substituted res. Although this decision dealt solely with the right of survivorship, the continued existence of which would not bar the relief sought here
Without passing on the question raised by the dictum in the last-cited case, we believe that the insurance proceeds in
Here, as in the Blumenthal case, the nature of the tenancy by which the husband and wife held the insured property is a mere incident, absent a dispute over the quantity of the parties’ interests. While in a certain sense the proceeds take the place of the building destroyed by fire, as we noted in Blumenthal, it is only in the sense of a thing of like value, secured through a personal contract, and not necessarily of like ownership.
It must not be forgotten that we approach the question presented in this case with the sensible rule that an inseverable tenancy is not recognized in this State as a legitimate mode of holding personal property. Entireties in real property became established at a time when realty was not a subject of commerce; it was the subject of possession and use by the owners. The quality of inseverability was, therefore, no great embarrassment to the full realization of the benefits of ownership of real property as it was then enjoyed. Putting aside the change in the use of realty, it is incontrovertible that a decision that ties up money, allowing only division of interest, is a serious impediment to its enjoyment. Therefore, since it is only by analogy that the incidents of a tenancy by the entirety may apply to personal property (Matter of Albrecht, 136 N. Y. 91, supra), considerations of policy and common convenience reinforce the applicability of the reasoning of the Blumenthal case.
Germania Sav. Bank v. Jung (18 N. Y. S. 709) and Stretz v. Zolkoski (118 Misc. 806) deal with surplus moneys after mortgage foreclosures and do not furnish a close analogy to this case. Moreover, indications therein that a tenancy by the entirety exists in such surplus moneys is answered by the reasoning in Franklin Sg. Nat. Bank v. Schiller (202 Misc. 576) holding to the contrary.
The complaint states a good cause of action for compulsory division of the proceeds of the insurance policy. • Accordingly, the judgment appealed from should be reversed, without costs, and the matter remitted to the Supreme Court for further proceedings not inconsistent with this opinion.
Judgment reversed, without costs, and matter remitted to Special Term for further proceedings not inconsistent with the opinion herein.
Admitting the right -of survivorship arguendo (Scutella v. County Fire Ins. Co., 231 App. Div. 343) only indicates that the proceeds of the insurance policy are held jointly. Absent the quality of inseverability unique to a holding by the entirety, joint ownership with right of survivorship is no barrier to a sale of the interest of one of the joint owners which destroys the reciprocal right of survivorship (Matter of Suter, 258 N. Y. 104; Matter of Polizzo, 308 N. Y. 517) and, accordingly, no barrier to invoking the power of equity to compel the indorsement and division of a jointly owned draft where it appears that the parties are uniaible to enjoy the benefits of a joint holding (Cooper v. Cooper, 225 Ark. 626; Loker v. Edmans, 204 App. Div. 223; Rush v. Rush. 144 Misc. 489).