179 Misc. 241 | City of New York Municipal Court | 1942
This is a motion by a judgment debtor to vacate a subpoena in supplementary proceedings served upon a life insurance company by a judgment creditor by the terms of which the insurance company is restrained from paying over to the judgment debtor the proceeds of a policy upon the life of her husband, now deceased. The question presented is whether those proceeds are exempt from the payments of the wife’s own debts, and the answer turns upon the construction of section 166, subdivision 1, of the Insurance Law (Cons. Laws, ch. 28).
The facts are set forth in the papers only fragmentarily but we assume the case to be the ordinary one of a husband’s applying for and obtaining insurance upon his own life and naming
Paraphrased, then, where a wife effects insurance upon the life of her husband, the proceeds are exempt from the claims of her creditors. The narrow question is the meaning of the word “ effect.” The judgment debtor relying upon Chatham Phenix National Bank v. Crosney (251 N. Y. 189) and Dellefield v. Block (40 Fed. Supp. 616), argues that any insurance “ obtained,” in a popular sense, by a husband for ihe benefit of his wife, is “ effected ” by her and that the proceeds, therefore, are exempt. The Court of Appeals did, it is true, hold that a wife “ caused ” insurance to be obtained for her own benefit when it was her husband who applied for and obtained insurance on his own life for her benefit. It did so in a case where the opposing creditors were the husband’s, not the wife’s, and in construing a statute (Domestic Relations Law, § 52; Cons. Laws, ch. 14) which exempted from claims of a husband’s creditors proceeds of insurance which the wife was instrumental in “ causing.” It recognized however that the insurance had been “ effected ” by the husband; it concerned itself only with a definition of “ causing.” In Dellefield v. Block (supra) the judge thought that the word “ effect ” in the statute under consideration should be given the same meaning as “ cause,” so as to exempt the proceeds not only from the husband’s creditors but from the wife’s.
The judgment debtor should not prevail. In enacting section 166 of the Insurance Law, the Legislature was fixing the rights of all creditors as against insured and beneficiary. The scheme of the statute is complete. Where A insures his life •— “ effects ” insurance upon his life —for the benefit of B, irrespective of who B may be, B takes as against creditors of A. Where A, having an insurable interest in the life of B effects
Moreover, there is no need to resort to unusual interpretation or construction in order to exempt the proceeds from the wife’s creditors. In the absence of statute the proceeds of a policy upon the life of a husband payable to a wife are not exempt from the claims of her own creditors. (Amberg v. Manhattan Life Ins. Co., 171 N. Y. 314.) Section 15 of the Personal Property Law (Cons. Laws, ch. 41) to a limited extent deals with the matter. That statute “ is a clear and unambiguous statement of the purpose of the Legislature to exempt from legal process, except in an action to recover for necessaries, the benefits accruing after the death of the insured under a trust or other agreement relating to the proceeds of a life insurance policy left with the insurance company where the parties to the trust or other agreement agree that such benefits shall be so exempt.” (Cross-man Co. v. Rauch, 263 N. Y. 264, 271.) Further than that the Legislature has not gone, except where the wife actually effects insurance and is not merely the beneficiary. There was no trust or other agreement here and the proceeds are not exempt from payment of the wife’s own debts. 1
The motion to vacate the subpoena is denied.