Case Name: Susan M. Morgan and Others, as Surviving Trustees under the Last Will and Testament of Dayton S. Morgan, Deceased, Respondents, v. The Mutual Benefit Life Insurance Company, Appellant, Impleaded with William O. Morgan and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-05-05
Citations: 132 A.D. 455
Docket Number: 
Parties: Susan M. Morgan and Others, as Surviving Trustees under the Last Will and Testament of Dayton S. Morgan, Deceased, Respondents, v. The Mutual Benefit Life Insurance Company, Appellant, Impleaded with William O. Morgan and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 132
Pages: 455–457

Head Matter:
Susan M. Morgan and Others, as Surviving Trustees under the Last Will and Testament of Dayton S. Morgan, Deceased, Respondents, v. The Mutual Benefit Life Insurance Company, Appellant, Impleaded with William O. Morgan and Others, Defendants.
Fourth Department,
May 5, 1909.
Insurance—assignment to third, person paying premiums — equitable lien of assignee.
Where a wife who was.beneficiary in a policy insuring her husband’s life assigns the same with her husband’s consent to a third person, who at the request of the beneficiary and for her benefit pays premiums due so as to keep the policy alive, he acquires an equitable interest in the proceeds of the policy and is entitled to the repayment of his advances.
This is true, although the wife died before the insured and by the terms of the policy the proceeds became payable to her children, for although the assignment was ineffective as against them, the premiums advanced by the assignee are chargeable on the policy.
Appeal by the defendant, The Mutual Beneiit Life Insurance Company, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Erie on the 16th day of September, 1908, upon the decision of the court rendered after a trial at the Erie Special Term, with notice of an intention to bring up for review upon such appeal two orders made on the 13th day of November, 1905, and the 4th day of June, 1906, respectively, directing service of the summons by publication upon the defendants other than the defendant insurance company.
The controversy is over insurance moneys due upon a policy of insurance issued by the defendant insurance company upon the life of Orson A. Morgan for $5,000, payable to Elizabeth A. Morgan, Ms wife; in case, however, lie should survive her, the insurance is payable to his children.
The policy is dated March 26,1866, and on the 23d day of March, 1871,. Elizabeth A. Morgan requested Dayton S. Morgan (plaintiffs’ testator), to advance the premium becoming due on that, day; and at the same time; with the consent of her husband,.she executed, and delivered to Dayton S. Morgan, an assignment of the policy of insurance as security therefor, and for all sums of money which h e might thereafter pay for costs, trouble or expense in and about the renewal or payment of premiums on said policy. Thereupon Dayton S. Morgan paid all the premiums thereafter as long as he lived, and the trustees under his will (plaintiffs, herein), continued to pay the premiums down to the death of the insured,, the amount, of which exceeds: the amount due upon the policy.
The wife, Elizabeth A. Morgan, died before the insured, Orson A. Morgan, and the plaintiffs, the surviving trustees under the will of Dayton S. Morgan; and the children of Orson A. Morgan, both claim the insurance moneys. The insurance company is- willing to pay the insurance moneys' to the plaintiffs, provided it. can do so , without being compelled to pay the same amount to the other claimants, The other claimants are made parties defendant. The summons was served upon- them by publication,, and. not personally, hi one of them has appeared, hut some have brought an action upon the policy in the Superior Court of the city and county of San Francisco, in the State of California, against- the defendant insurance • company. The plaintiffs, however, are not made parties to that action, and all proceedings were stayed in that action by the California court until the rendering of a judgment in this action, or until the plaintiffs be made parties defendant.
The plaintiffs recovered judgment, and the-defendant insurance company appeals.
Louis L. Babcock, for the appellant.
Joseph H. Morey, for the respondents.

Opinion:
Kruse, J.:
The defendant insurance company again challenges the validity of the order directing the. service of • the summons1 by publication upon the non-resident defendants, but that question was settled adversely to it upon the appeal from the order denying the motion to vacate the same. (Morgan v. Mutual Benefit Life Ins. Co., 119 App. Div. 645; affd., 189 N. Y. 447.)
The plaintiffs contend that the defendant is likewise concluded upon the merits by that decision, since the effect of upholding the order of publication is that the complaint upon which the order is -founded states a good cause of action. While that does not necessarily follow, since all of the facts were not before the court as they wei'e made to appear upon the trial, we think, under the authorities cited in the opinion of the Court of Appeals, the plaintiffs are clearly entitled to recover.
The rule laid down in Pomeroy's Equity Jurisprudence (Vol. 3, § 1243) and cited in the opinion, is as follows : " Where a person not being owner of a policy of life insurance, nor bound to pay the premium, but having some claim or color of interest in it, voluntarily pays the premiums thereon and thus keeps it alive for the benefit of a third party, he may thereby acquire an equitable lien on the proceeds of the policy as security for the repayment of his advances."
It is claimed that this rule has also been approved by the Supreme Court of the State of California. (Stockwell v Mutual Life Ins. Co., 140 Cal. 198. See, also, Connecticut Mutual Life Ins. Co. v. Burroughs, 34 Conn. 305.)
It is not claimed that the assignment L Elizabeth A. Morgan, the wife, to the plaintiffs' assignor was effective as against the children of the assured, but plaintiffs contend that the premiums which were paid by the assignee and the trustees of his will are chargeable upon the policy and the proceeds thereof, and we think the plaintiffs are right in that regard.
The judgment should, therefore, be affirmed, with costs.
All concurred.
Judgment affirmed, with costs. Appeal from orders directing service by publication dismissed.