192 A. 451 (N.J. 1936), Slurszberg v. The Prudential Insurance Company of America

Citation:192 A. 451, 15 N.J.Misc. 423
Opinion Judge:Ackerson, S. C. C.
Party Name:ABRAHAM J. SLURSZBERG AND AARON A. MELNIKER, RECEIVERS OF JEWETT REALTY CORPORATION, PLAINTIFFS, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, A CORPORATION OF NEW JERSEY, DEFENDANT
Attorney:For the plaintiffs, Frank W. Heilenday. For the defendant, Perkins, Drewen & Nugent.
Case Date:February 11, 1936
Court:Supreme Court of New Jersey

Page 451

192 A. 451 (N.J. 1936)

15 N.J.Misc. 423

ABRAHAM J. SLURSZBERG AND AARON A. MELNIKER, RECEIVERS OF JEWETT REALTY CORPORATION, PLAINTIFFS,

v.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, A CORPORATION OF NEW JERSEY, DEFENDANT

Supreme Court of New Jersey

February 11, 1936

Page 452

Defendant's motion granted.

For the plaintiffs, Frank W. Heilenday.

For the defendant, Perkins, Drewen & Nugent.

OPINION

Page 453

On action at law.

Ackerson, S. C. C.

The first amended complaint herein having been previously stricken out upon motion, the defendant now moves to strike the second amended complaint upon the grounds that it is frivolous; shows no right, title or interest in the plaintiffs to the cash surrender value of the insurance policy upon which the action is based, and that the proceeds of said policy are exempt from the claims of creditors.

The second amended complaint discloses that on May 5th, 1925, the defendant company issued its policy of insurance on the life of Thomas Sluberski in the sum of $ 5,000, payable to said Sluberski twenty years after the date of the policy, provided insured is then living, or in the case of the prior death of the insured, then to his wife as beneficiary, with the right reserved by the insured to change the beneficiary and providing for a cash surrender value to the insured under certain specified conditions after the second year, increasing in amount each year. It is specifically alleged that the premiums [15 N.J.Misc. 424] were paid in full until April 1st, 1931, at which time the cash surrender value of the policy was $ 1,247.40.

The complaint further alleges that on November 29th, 1928, the insured became indebted to the Jewett Realty Corporation in the sum of $ 1,600, and on March 5th, 1932, a receiver of said corporation recovered a judgment against said insured for $ 1,417, and that on April 15th, 1932, the right, title and interest of the insured in said policy of insurance was sold by the sheriff under an execution upon said judgment to said receiver, and the policy was delivered to him. A copy of the policy in question is now annexed to and made a part of this complaint and by amendments the complaint is further made to allege that both the assured and the beneficiary were alive at the time of said levy and sale of said policy and are still alive; that "no claim for exemption pursuant to sections 38 and 39 of the New Jersey Insurance law (2 Comp. Stat., p. 2850) was made either by Thomas Sluberski or any other person;" that, "by virtue of said execution levy and sale, all of the right, title and interest of said Thomas Sluberski" (the assured) "in and to said policy, * * * was assigned by operation of law" to said receiver, and "on or about April 20th, 1932, a written notice of said assignment was delivered to the defendant and accepted by it, and the said policy was duly surrendered to the defendant and demand made * * * for its cash surrender value, but the defendant refused and still refuses to pay the same or any part thereof," and that at said times the "policy was in full force and effect." It is further alleged that the plaintiffs were duly substituted as receivers of the Jewett Realty Corporation. It is important to note, however, that the complaint does not allege that the insured, Thomas Sluberski, ever assigned the policy to the plaintiffs or their predecessor, nor that he ever exercised his right to surrender the policy and receive the cash surrender value, or authorized the plaintiff to do so, or ever changed the beneficiary. Furthermore, it is not alleged that the sale by the sheriff is expressed in any writing, nor that the alleged assignment "by operation of law" is evidenced by any written instrument whatsoever, nor that plaintiffs or their predecessor ever applied to change the beneficiary.

[15 N.J.Misc. 425] Since the plaintiffs are, in legal contemplation, creditors of the insured, it follows that the legal sufficiency of the complaint in this action depends in the first place upon whether the policy in question (or its alleged cash surrender value) is exempt from the claims of the creditors of the insured by virtue of section 38 or 39 of the "Insurance act" (Pamph. L. 1902, p. 422; 2 Comp. Stat. 1910, p. 2850), which provides as follows:

38. " When a policy of insurance is effected by any person on his own life, or on another life in favor of some person other than himself, having an insurable interest therein, the lawful beneficiary thereof, other than himself or his legal representatives, shall be entitled to its proceeds, against the creditors and representatives of the person effecting the same; * * *; provided, that, subject to statute of limitation, the amount of any premiums for said insurance paid in fraud of creditors, with interest thereon, shall inure to their benefit from the proceeds of the policy; * * *."

39. " Every policy of life insurance made payable to or for the benefit of a married woman * * *, whether procured by herself, her husband, or by any other person, * * *, shall inure to her separate use and benefit, and to that of her children according to the terms and provisions of the policy * * *, subject to the above provisions relating to premiums paid in fraud of creditors."

Page 454

Plaintiffs insist, in the first...

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