Court Opinion

ID: 5316475
Source: CourtListenerOpinion
Date Created: 2022-01-08 04:13:19.763285+00
Date Added: 2024-06-11T08:29:16.713141
License: Public Domain

Sherman, J. (concurring).
In concurring with the conclusion reached by Mr. Justice Finch, I deem it proper to state the reasons which lead me to that result.
As appears from the prior prevailing opinion (224 App. Div. 504) the insurance policies were issued in Ohio when both the insured and his wife, the beneficiary (one of the appellants), resided there. Their subsequent residence in this State and the death here of Mr. Ruggles, leaving an insolvent estate, give rise to this action brought in behalf of his creditors.
Much of the argument deals with the effect of the enactment of section 55-a of the Insurance Law (as added by Laws of 1927, chap. 468). That it repealed by implication section 52 of the Domestic Relations Law is now settled. (Chatham Phenix National Bank v. Crosney, 251 N. Y. 189.) Assuming that the New York statute applies, the question is whether the rights of any party hereto have been affected thereby.
In my opinion they had accrued when Edwin D. Ruggles died in March, 1926, prior to the enactment in 1927 of that section of the Insurance Law. Upon his death, the defendant insurance company, having received due proofs of death, as found by the court at Special Term, was obligated to pay the amount of each policy to the individuals then entitled thereto. All rights thereunder had become fixed and the subsequent repeal of the statute could not deprive decedent’s creditors of such rights, if any, as they then had to share in the insurance proceeds.
To hold otherwise would be in derogation of their property rights under the law as it then existed. How can they be deprived of then right to share in this property, except in contravention of article 1, section 10, of the Federal Constitution?
The learned Special Term found at the request of defendant Ruggles: "Under the law of the State of Ohio, the defendant *16Mary B. Buggies in the lifetime of her husband Edwin D. Buggies, had a vested interest in the insurance policies issued by the defendant Northwestern Mutual Life Insurance Company and payable to her, and upon his death she was entitled, upon compliance with their terms, to receive and retain the proceeds or avails of said policies for her sole benefit, free from all debts of her said husband and from all claims of his creditors and of the plaintiff.”
The Circuit Court of Appeals, Second Circuit (Matter of Messinger, 29 F. [2d] 158; certiorari denied, sub nom. Reilly v. Messinger, 279 U. S. 855, April 22, 1929), in considering the effect of this statute held (p. 161): “ Section 55a of the State Insurance Law took effect March 31, 1927. It is unlikely that there were not creditors existing at that time, seeing that bankruptcy followed so soon after. To the creditors whose claims arose prior to the passage of the law, it would not apply. Not only is a retroactive statute which disturbs existing rights unlikely to have been intended, but a State law which deprives existing creditors of their rights to resort to. property for payment of their claims would impair the obligation of contracts, and contravene section 10, article 1 of the Federal Constitution. Bank of Minden v. Clement, 256 U. S. 126, 41 S. Ct. 408, 65 L. Ed. 857; Edwards v. Kearzey, 96 U. S. 595, 24 L. Ed. 793; Gunn v. Barry, 15 Wall. 610, 21 L. Ed. 212. * * * Section 55a should be construed so as not to operate retroactively, and to affect only such claims as arose after March 31, 1927.” To the same effect is Matter of Sturdevant (29 F. [2d] 795).
Nor do I agree that the newly-enacted statute (Insurance Law, § 55-a) may properly be construed to relate to the situation here present, for when that act became effective, the period of insurance had already expired. At the hour.of that enactment, the insurance had terminated; the life of Buggies was no longer insured. Therefore, the opening words of the act, viz.: “ If a policy of insurance, whether heretofore or hereafter issued,” must be held to relate, not to a- matured policy whose life had ended, but to existing unmatured operative policies of insurance theretofore issued. The statutes touches contracts of insurance and not proceeds derived from an insurance coverage which had theretofore ceased to exist.
The creditors whose interests are represented by plaintiff own claims against the estate of Buggies which had accrued in Ohio and in New York prior to Mr. Buggies’ death and during the years that section 52 of the Domestic Belations Law was in force. If under that statute these creditors held a valid claim to the proceeds of the policies payable upon Mr. Buggies’ death, nothing that has since transpired — certainly not the enactment of chapter 468 of the Laws of 1927 — can take it away.
*17Stare decisis is a salutary, but not inflexible, rule furthering the practical administration of justice. (Rumsey v. New York & New England R. R. Co., 133 N. Y. 79, 85.) In a court of last resort it may be held controlling, though there “ a manifest error in its former judgment ” may be corrected. (Cluff v. Day, 141 N. Y. 580, 582.) Ordinarily a court may not treat a question as res nova which it had theretofore decided (Leavitt v. Blatchford, 17 N. Y. 521), but it was there stated to be the duty of the court “ freely to examine its own decisions ” and to correct error by overruling a prior decision (Leavitt v. Blatchford, supra, 533; Rumsey v. New York & New England R. R. Co., supra, 85). Here no contract has been made nor rights acquired in reliance upon the prior decision of this court. In view of the decision about to be made reversing the judgment and dismissing the complaint, and inasmuch as this is a court of intermediate appeal, I feel free to state my individual conclusion (which is not in harmony with the prior decision of this court) that each policy of insurance, being an Ohio contract entered into while Mr. and Mrs. Euggles were residents of Ohio, was at no time subject to section 52 of the Domestic Eelations Law. (Ætna Life Ins. Co. v. Dunken, 266 U. S. 389.) Each policy was an entire contract (Washington Central Bank v. Hume, 128 U. S. 195), and the beneficiary thereof could not be deprived of her right to receive the proceeds of the policy undiminished by the claims of her husband’s creditors, inasmuch as the laws of Ohio forbade participation therein by creditors. Under the laws of Ohio, the widow (beneficiary) was entitled to the full proceeds. No enactment by the State of New York could validly impair that contract right. The change, from time to time, of the residence of an insured and the sending of premiums to pay for the insurance from one or another State, in which he might temporarily reside, when each State may have a different statute as to creditors’ and widows’ rights, surely ought not to affect the amount payable to the beneficiary under the laws of the State in which the contract of insurance was made and where it was to be performed.
For the above reasons I concur in the determination reached by Mr. Justice Finch that the judgment appealed from should be reversed and the complaint dismissed.
Judgment reversed, with costs to defendants, appellants, and complaint dismissed, with costs. Settle order on notice, reversing findings inconsistent with this determination and containing such new findings of facts proved upon the trial as are necessary to sustain the judgment hereby awarded.