Annis v. Pilkewitz
Decision Date | 21 December 1938 |
Docket Number | No. 111.,111. |
Citation | 287 Mich. 68,282 N.W. 905 |
Parties | ANNIS v. PILKEWITZ et al. |
Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Judgment creditor's bill by Newton Annis against Louise Pilkewitz (née Louise Pfeiffer Manning) and another. Defendant New York Life Insurance Company filed a motion to dismiss the bill of complaint. From an order dismissing the bill, the plaintiff appeals.
Affirmed.
Appeal from Circuit Court, Wayne County, in Chancery; James E. Chenot, judge.
Argued before the Entire Bench, except BUTZEL, J.
Edmund M. Sloman, of Detroit, for appellant.
Thomas A. E. Weadock, of Detroit, for appellee New York Life Ins. Co.
Under foreclosure of a mortgage securing the payment of a promissory note executed by Louise Pilkewitz, plaintiff took a deficiency decree in the amount of $1,265 and costs against Mrs. Pilkewitz, nee Manning. Execution was issued and returned nulla bona. Thereupon plaintiff filed this judgment creditor's bill, making Mrs. Pilkewitz and the New York Life Insurance Co. defendants. Both parties appeared and answered; and the defendant New York Life Insurance Co. also filed a motion to dismiss the bill of complaint, assigning reasons hereinafter considered. The circuit judge granted this motion. Plaintiff has appealed.
Mrs. Florence Manning, mother of defendant Louise Pilkewitz and now deceased, carried four policies of insurance in the defendant New York Life Insurance Co. The insured entered into agreements with the insurer whereby provision was made for disposition of the proceeds of the respective policies. Upon the death of the insured so-called certificates of trust were issued to the beneficiary in accordance with the terms of the agreements between the insurer and the insured. This litigation concerns only the certificates issued under three of such agreements, the fourth one having been fully satisfied. Each of these three agreements contained the following provision:
‘The benefits under said trust shall not be transferable nor subject to commutation or encumbrance, nor except in an action to recover for necessaries shall said company as trustee, or otherwise, pay or be liable to pay any benefits under said trust to any person, firm or corporation except to said beneficiary personally, or to a guardian for said beneficiary during minority.
It is conceded that the obligation of which plaintiff seeks satisfaction is not for necessaries. In the opinion which he filed, incident to granting the motion to dismiss, the circuit judge said:
Appellant asserts that the circuit judge, in so holding and ordering dismissal of the bill of complaint, was in error. The record discloses that the insurance company is obligated to pay Mrs. Pilkewitz, under the certificates held by her, $270 per month; and that $140 per month is sufficient to cover her reasonable monthly living expenses. It is appellant's contention that as to the balance of $130 per month the court should order payment to a receiver to be applied on the decreed indebtedness of Mrs. Pilkewitz to plaintiff. Appellant recognizes it is provided in each of the agreements between the insurance company and the mother of Mrs. Pilkewitz that it shall constitute a contract to be performed in the State of New York and under the laws of that State, and that the benefits accruing to Mrs. Pilkewitz cannot be transferred or assigned or become subject to execution except for necessities. But appellant contends that such provisions are not effective in this State in a suit to which both the insurance company and Mrs. Pilkewitz are parties. Instead, appellant asserts the exemptions to which Mrs. Pilkewitz is entitled are fixed by the law of Michigan. This presents the issue which is decisive of this appeal. If the contract rights created by the agreements entered into between the insurance company and the mother of Mrs. Pilkewitz are governed by the laws of New York, then clearly the circuit judge was right in dismissing plaintiff's bill of complaint.
It is specifically provided in each of the agreements entered into between the insurer and the insured that the issuing of the certificates now held by Mrs. Pilkewitz discharged the insurer from further liability on account of the policies held by Mrs. Pilkewitz' mother; and these agreements also provide relative to the money accruing under the respective policies that the insurance company ‘may mingle the sum so received with its general corporate funds as a part thereof.’ The agreements further provide that annually the insurance company ‘shall credit the fund then remaining in its possession with interest at such rate per annum as said company may declare for that year on funds held in trust under trusts of this kind, but shall guarantee that the rate of interest shall in no year be less than three per cent.’ Under similar arrangements it has been held that the relationship created between the insurance company and the recipient of the benefits is that of debtor and creditor. In Crossman Co. v. Rauch, 263 N.Y. 264, 188 N.E. 748, the court said [page 751]:
Again, in a similar case, the same court said: ‘* * * we are convinced, after a careful examination of the character of the relations existing between these parties, that it cannot be said that the defendant is in any sense a trustee of any particular fund for the plaintiff, or that it acts, as to him and in relation to any such fund in a fiduciary capacity.’ Uhlman v. New York Life Ins. Co., 109 N.Y. 421, 17 N.E. 363, 364,4 Am.St.Rep. 482.
Under New York law, which is of consequence in this case, the proceeds of the insurance carried by Mrs. Manning and payable to her daughter under the agreements with the insurance company are exempt from execution, except for necessaries, regardless of whether the relationship between the insurance company and Mrs. Pilkewitz is one of trust or one of debtor and creditor. Crossman Co. v. Rauch, supra. While it may be interesting academically, under the New York holding we...
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