Court Opinion

ID: 5357307
Source: CourtListenerOpinion
Date Created: 2022-01-08 07:08:30.562772+00
Date Added: 2024-06-11T08:29:49.450133
License: Public Domain

Hagarty, J.
(dissenting). I agree with Mr. Justice Johnston’s conclusion that upon the death of the assured on August 16, 1934, the proceeds of the policies of insurance belonged to the corporation, the Par Amount Shut Shops, Inc., named in the policies as the beneficiary. When the corporation made a general assignment for the benefit of creditors on the 5th day of March, 1932, the policies had no cash surrender value, as loans had been made upon them to the fullest extent. For that reason they did not pass to the assignee. But, in any event, it was only the cash surrender value that could have passed to the assignee at the time of the assignment. (Matter of McKinney, 15 Fed. 535.) It follows, therefore, that on the death of the insured the proceeds of the policies were payable to the corporation, of which the insured was a large stockholder, if not the only stockholder. As to the extent of the insured’s holdings in the corporation, the record is silent. But when the insured died, the amount of the policies was paid, not to the corporation, but to “ Morris M. Cohen, assignee for the benefit of creditors of Par Amount Shirt Shops, Inc. of New York ” to the extent of $14,477.21. Clearly the assignee had no right to it. In none of the proceedings to reopen the estate, to authorize the assignee to make application for payment and for approval of a settlement between the assignee and Mary A. George, was notice ever given the corporation, nor was the latter represented therein. Further*276more, no direction was ever made by court order or otherwise to the insurance company to pay the proceeds of the policies to the assignee. It cannot be said that the assignee for the benefit of creditors represented the corporation, for, quoting from the opinion in Brown v. Guthrie (110 N. Y. 435, 441), “ The material and essential characteristic of a general assignment is the presence of a trust. The assignee is merely trustee and not absolute owner.” As such trustee for the benefit of creditors, he had no standing as a representative of the corporation, particularly in a transaction involving a fund which accrued long after the assignment and did not pass under it. It cannot be said that Mr. Kopple represented the corporation, for he had been retained by the widow, and made claim to the insurance moneys on her behalf as “ widow and administratrix, and also as stockholder.” As a matter of fact, neither the assignee nor Kopple claimed to represent the corporation. Subsequently the moneys were deposited in the names of the assignee and Kopple “ to await determination as to whom they belonged.” The result was that, in the absence of the corporation, the corporation’s money was divided among the assignee, the widow and Kopple, no one of whom had any legal right or claim to it.
My conclusion is that the proceeds of the policies in the full amount belong to the corporation; that they have never been paid to it, and that the corporation has never relinquished its right to them. If that be so, the stock of the corporation held by the intestate at the time of his death has value as an asset of the decedent’s estate, and it is for the stock that the administratrix should be surcharged. The administratrix may not be surcharged with assets belonging to a corporation merely because her intestate held stock in that corporation.
For the reasons stated, the decree should be affirmed, without costs, and without prejudice to the right of the special guardian for the infant and the creditor, appellants, to file objections to the account as outlined in this opinion.
Davis, J., concurs.
Decree of the Surrogate’s Court, Queens county, reversed on the law and the facts, with costs to appellants, payable out of the estate, and the matter remitted to the surrogate to take further proof and enter a decree in accordance with opinion by Johnston, J.
On appeal from order: Lazansky, P. J., Hagarty, Carswell, Davis and Johnston, JJ., concur.
Appeal from order granting motion for issuance of supplemental citation directed to Morris D. Kopple dismissed.