Case ID: ad_67/html/0012-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William J. Rattle, Respondent, v. The Mutual Life Insurance Company of New York, Appellant, Impleaded with Helene M. Brown, Defendant.
    
      Preference—action Try one creditor on behalf of himself and, others to set aside a ■ transfer of an insurance policy by a deceased insolvent debtor—application therefor by one defendant not a ba/r to that of another.
    
    An action brought by a creditor of an alleged deceased insolvent debtor on behalf of himself and other creditors to set aside a transfer, made by the decedent to the individual defendant, of a life insurance policy issued by the defendant insurance company, on the ground that the transfer was procured by undue influence and was in fraud of creditors, is entitled to a preference under subdivision 5 of section 791 of the Code of Civil Procedure.
    The denial of a motion for such a preference, made by the individual defendant when the action was at issue as to her only, is not a bar to a subsequent application by the insurance company for the preference.
    Appeal by the defendant, The Mutual Life - Insurance Company of New York, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 8th day of November, 1901, denying said defendant’s motion for a preference and to place the cause upon the preferred calendar pursuant to subdivision 5 of section 791 of the Code of Civil Procedure.
    
      Roswell H. King, for the appellant.
    
      Allan Lee Smidt, for the respondent.
   Per Curiam :

This action is brought by William J. Rattle, a creditor of Alvah W. Brown, deceased, in behalf of himself and other creditors, to set aside the transfer of a life insurance policy issued by the defendant the' Mutual Life Insurance Company of New York, on the grounds that the transferer, Alvah W. Brown, was mentally and physically incapacitated at the time of the transfer ; and that such transfer was procured by the undue influence of the transferee, Helene M. Brown, one of the defendants herein, and that it was in fraud of creditors.

The defendant Brown, the action being at issue as to her only, made a motion for preference which was denied and no appeal taken therefrom.

The moving papers and the complaint contain no averments that the said Alvah W. Brown was insolvent, except the allegation in the complaint that the defendant, at the time she applied for letters of administration on the estate of said Alvah W. Brown, made an affidavit to the effect that said Alvah W. Brown’s property did not exceed in value the sum of §2,010.

We are not called upon at this time to pass upon the sufficiency of the complaint. It is evident, however, that it seeks to aver a cause of action based upon the ground of a transfer in fraud of the rights of creditors. It is also evident that in order to succeed the plaintiff must show that the deceased at the time of the transfer was insolvent, and that his estate was insufficient to pay creditors, otherwise it would not be made to appear that the plaintiff or other creditors suffered damage by such act. The deceased’s estate must have been impaired by the transfer, else there would be no ground of action. If this complaint be anything, it is this cause of action. So construed, it falls within the terms of subdivision 5 of section 791 of the Code of Civil Procedure, as an action for the benefit of himself and other creditors interested in the estate, and he is the sole plaintiff in the action. Under such circumstances the case is entitled to a preference. (Haux v. Dry Dock Savings Institution, 150 N. Y. 581.)

The application of the defendant Brown at the time when she was the sole defendant does not constitute a bar to this application; the defendant insurance company was not a party thereto and is not concluded thereby. It follows that the order should be reversed and the motion for a preference granted, with ten dollars costs and disbursements of this appeal.

Present—Patterson, Ingraham, Hatch and Laughlin, JJ.

Order reversed and motion granted, with ten dollars costs and disbursements of appeal.