Case ID: misc_18/html/0590-01.html
Source: Caselaw Access Project
Author: {"author": "Van Wyck, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Herman Kratzenstein, Respondent, v. Charles Lehman, Impleaded, Appellant.
    (City Court of New York, General Term,
    December, 1896.)
    1. Attachment — Insurance policy.
    The interest of an insured in an endowment policy which has a surrender value is a chose in action, and is subject to attachment, which is properly levied by leaving a copy of the warrant with the insurance company.
    
      2. Execution — Interest in insurance policy cannot he sold on.
    Where a sheriff has attached the debtor’s interest in an endowment policy, he cannot sell the same under an execution issued upon the judgment recovered in the action.
    Appeal by defendant Lehman from order denying his. motion to vacate judgment and enjoin sheriff from selling, on execution, his interest under an endowment and life insurance policy.
    Abraham Gruber and T. B. Chancellor, for respondent.
    Moses Weinman, for appellant.
   Van Wyck, Ch. J.

The action was for goods sold and delivered by-plaintiff to defendants, who resided in Louisiana, and an attachment was granted because of the nonresidence of defendants and issued to the sheriff, who thereunder, by service of a copy thereof on the Manhattan Life Insui’ance Company of this city, levied upon the defendant Lehman’s interest under a certain life insurance and endowment policy, issued in. 1889 by such company to defendant Lehman. The action was duly commenced by substituted service without the state, and the attachment was granted and levy thereunder by sendee of copy thereof made in December, 1895, and the judgment entered in March, 1896. The defendant Lehman, only, moved in April following to vacate this judgment on the grounds that. no proper levy had been made under the attachment and that the judgment was irregularly entered, and to enjoin the sheriff from selling, under the execution issued on the judgment, said defendant’s interest in said policy of insurance, and this appeal is from the order denying, such motion. Appellant’s contention is that no valid levy, was made under the attachment by service of copy thereof upon the insurance company; first, because the second subdivision of section 649 of the Code requires the sheriff to levy under attachment upon personal property capable of manual delivery, including a bond, a promissory note or other instrument for the payment of money, by taking the same into the sheriff’s actual custody. This policy was presumably in the possession of the defendant,' who was in Louisiana, and the New York sheriff’s authority did not reach so far, and moreover, the policy was not, within the meaning of that Code provision, an instrument for the payment of money, but a written contract of life insurance and endowment. This policy had been in full force for more than three years before commencement of the action and the issuance of and levy under the attachment, and by the terms thereof the company had agreed to pay $5,000 to defendant Lehman ten years after the date thereof if he then be alive, or to his estate if he should die within that time limit. The plaintiff’s proof shows that the then value of Lehman’s interest under this policy was $500, and he nowhere denies this averment as to value; hence it must be taken as true, and moreover, this policy then had a certain surrender value provided for by the statutes of this state, and this averment as to value must be read in the light of these statutes, and as so read must be taken to mean that the then present surrender value of Lehman’s interest under the policy was $500, and if his then interest was of such value to him, then why not to. his attaching creditor? The Code, section 648, says: The attachment may be levied upon a cause of action arising upon contract, whether past due or yet to become due.” Of course, this does not mean to become due upon the happening of an event which is not measured by a time limit, but means to become due at or within a time as fixed by the contract; and the test in this case is whether a cause of action, under the policy, would accrue against the company within a certain period as fixed by the policy itself. The policy was to pay $5,000 to Lehman ten years after date if then alive, or to his estate upon his death prior thereto, and the policy had been in full force for more than three years and had a then surrender value. Under this contract, one of three causes of action against the company must accrue within tliree years from "to-day; that is, within ten years from the making of the contract of insurance and endowment: First, upon default in payment of premiums an action to enforce the surrender value of the policy under the statute; second, upon the death before 1899 of the insured, premiums being duly paid, an action to enforce the payment of the life insurance of $5,000; third, at the expiration of the ten years’ time limit fixed by the contract, an action to enforce payment of the endowment of $5,000. One of these causes of action on the contract must become due within the time limit fixed thereby ; hence Lehman’s interests thereunder are choses in action, and every chose in action, whether due or certain to become due in the future, is subject of attachment under section 648 of the Code, and' under subdivision 3 of section 649 is properly levied upon by leaving a copy of the warrant with the person against whom it exists. Thus it follows that the lien of the levy so made under the attachment reached the defendant’s property within the state and gave jurisdiction, although substituted service of the summons was made without the state; hence so much of the order appealed from as denied defendant’s motion to vacate the judgment must be affirmed. However, the record shows that the sheriff has given notice that he will sell the right, title and interest of Lehman in and to the policy under the execution issued to him by plaintiff under the final judgment entered herein; but this he should not be allowed to do, for section 655 of the Code provides that: “ The sheriff must, subject to the direction of the court or judge, collect and receive all debts, effects and things in' action attached by him, and may maintain any action or special-proceeding in his own name or in the name of. the defendant • which is necessary for that purpose.” The property attached is a chose in action,' not subject to levy on execution or to sale by virtue of an execution. Mechanics & T. Bank v. Dakin, 51 N. Y. 519. Hence so much of the order appealed from as denies defendant’s motion to enjoin the sheriff from so selling his right,, title and interest in said policy is reversed and his motion, in so far as it seeks to so enjoin the sheriff, is granted. No costs to either party.

Eitzsimons and O’Dwyer, JJ., concur.

So much of order as denies motion to vacate judgment affirmed- and so much as, denies motion to enjoin sheriff from selling defendant’s interest in the policy reversed,- without costs.