Case ID: ny-st-rep_61/html/0365-01.html
Source: Caselaw Access Project
Author: {"author": "Haight, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William T. Knorr, App’lt, v. New York State Mutual Benefit Association, Resp’t.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed June 20, 1894.)
    
    1. Attachment—Fraudulent disposition.
    The application, by an insurance company, of a fund to subsequent death benefits to the exclusion of plaintiff's claim, is not a fraudulent disposition of its property.
    3. Same—Vacation—Interest.
    When affidavit by receiver of a corporation to vacate an attachment against it shows an interest in the attached property.
    3. Pleadinq—Complaint—Insurance.
    The complaint in an action by an administrator on policy payable to the wife of the insured or, in case she does not survive him, to his administrator, must state that the insured survived his wife.
    4. Same—Objections—Waiver.
    The receiver of a corporation is not bound by a waiver of objections by the corporation, to a complaint against it.
    Appeal from an order vacating a warrant of attachment.
    
      William H. Henderson, for app’lt; Louis Marshall, for resp’t.
   Haight, J.

—The warrant was issued upon the ground that the defendant had assigned, disposed of, secreted, and is about to assign, dispose of, and secrete property with intent to defraud its creditors. The motion to vacate was made by one David McClure, as receiver of the defendant, appointed by the court in an action prosecuted by the people of the state to dissolved and wind up the affairs of the corporation, aiid was based upon the papers upon which the warrant was granted. When the motion was brought to a hearing, the appellant objected, upon the ground that the moving party had failed to show ,by any legal proof that there had not been an actual application of the attached property, or the proceeds thereof, to the payment of the judgment in the action prior to making the motion, and that lie had failed to show that he had any interest in or lien upon the property attached under the warrant. These objections were overruled, and, we think properly; for it appeared by the affidavit of McClure that he was appointed temporary receiver on the 12th day of January, 1893, by the court in the action referred to ; that he had duly qualified, by giving the security required by the order, and filing the same in the office of the clerk, with the oath of office required and that he had ever since acted, and was still acting, as such receiver. Attached thereto was a copy of the order of the court appointing him such receiver. It also appears by the affidavit of Horan that nothing as yet had been collected by the plaintiff under the attachment, and from the affidavit of Marshall that a motion had been made by the plaintiff for leave to apply the property attached in payment of his judgment, upon which an order was issued staying proceedings until the hearing and determination of the motion. It was competent to show these facts by affidavit, provided they were within the personal knowledge of the affiants. Delmore v. Owen, 44 Hun, 296; 7 St. Rep. 584; affirmed, 110 N. Y. 679 ; 18 St. Rep. 1030; Tim v. Smith, 93 N. Y. 87.

It is also contended that the moving party was guilty of loches. Upon this subject the parties were permitted to present their affidavits, and although considerable time had elapsed after McClure was appointed receiver, under the facts stated by him, we think, there was proper excuse for the delay. We are thus brought to a consideration of the papers upon which the warrant was issued. It appears to have been issued upon the complaint, the affidavit of the plaintiff and of Inman, his attorney. It appears' that on the 20th day of June, 1881, Charles Knorr, the plaintiff’s testator, joined the defendant, and had issued to him a certificate of membership in class A, for $2,000, numbered 165, in which the defendant certified that: This membership entitles his wife, Louisa, if she survive him,—otherwise his executor .or administrator,—upon the death of said Charles Knorr, to such an amount as will equal one dollar collected from each member upon the assessment made for the payment thereof, not, however, to exceed the sum of $2,000, said amount payable within 60 days after satisfactory proof of said death has been received by the association.”

The plaintiff alleges that Charles Knorr died on the 31st day of January, 1892, leaving a last will and testament, which has 'been duly'admitted to probate, and that the plaintiff had been duly appointed administrator with the will annexed by the surrogate’s court of Cattaraugus county. Neither the complaint nor the affidavits make any mention of the wife of the testator; so we are not advised as to whether she- is living or dead. If she survived the testator, the money due upon the certificate from the defendant belonged to her, and not to the executor or administrator of the testator. In this respect it is apparent that there was a failure to state a good cause of action. But it may be said that the defendant has waived this defect in the papers by resting upon its rights, and permitting the plaintiff to enter judgment. Possibly, this may be true as to the defendant; but McClure, as receiver, represents, not only the defendant, but the creditors as well, and, as such, we see no reason why he may not avail himself of the defect unless he has waived the same because of his loches. But assuming the papers to be sufficient so far as this question is concerned, we find further trouble in sustaining the attachment. As we have seen, it was issued upon the ground that the defendant has assigned, disposed of, and secreted, and is about to assign, dispose of, and secrete, property with the intent to defraud its creditors. It appears from the affidavits upon which the warrant was issued that the plaintiff presented to the defendfendant proofs of death; that they were accepted, 'and an assessment was ordered under date of July 1, 1892, for the plaintiff's claim ; and that the full amount was paid into the office of said company. It further appears from the statement of the officers of the defendant to the plaintiff’s attorney that, instead of pajdng over the money to the plaintiff, the same was paid out upon death claims of members resident in the city of Syracuse and vicinity, whose claims had matured subsequently to that of the plaintiff. Was this a disposing of or secreting the property of the corporation with intent to defraud creditors? We think not. If the money collected upon the assessment belonged to the corporation, it appears that it was applied to the payment of its debts. Its creditors, therefore, could not have been defrauded. If the money collected upon the assessment belonged to the plaintiff, as claimed, and the officers received it in trust for him, and diverted or converted it, the plaintiff may have a remedy against them for so doing; but we do not understand that he would be entitled to an attachment against the corporation, upon the grounds stated, by reason of such conversion by the. officers thereof. Whether the money so collected upon the assessment belonged to the plaintiff or to the corporation it is not necessary to now determine, for in neither event could an attachment issue upon the grounds stated in it. The order appealed from should be affirmed, with $10 costs and disbursements. All concur.