McCarthy v. Griffin
| Decision Date | 01 February 1938 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | ANDREW A. MCCARTHY, administrator, v. HELEN G. GRIFFIN & another. |
October 7, 1937.
Present: RUGG, C.
J., FIELD, DONAHUE LUMMUS, & QUA, JJ.
Executor and Administrator, What are assets of estate, Removal. Insurance Life: change of beneficiary, rights of creditor of insured. Fraudulent Conveyance. The protection afforded to beneficiaries of life insurance by G. L. (Ter.
Ed.) c. 175 Section 125, is available only in aid of beneficiaries named as such when the insurance is originally effected.
The entire proceeds of a policy of life insurance, the beneficiary of which had been changed by the insured in fraud of creditors at a time when it was payable to his estate and he was insolvent became a part of his estate after his death and should have been accounted for as such.
An administrator's insistence upon his personal interest as a specified beneficiary of a life insurance policy in opposition to the interest of creditors of the estate, to which the proceeds belonged, justified his removal as administrator.
PETITION, filed in the Probate Court for the county of Essex on August 28, 1935 for the allowance of the administrator's first account; also a
PETITION for removal of the administrator, filed in that court on January 22, 1936.
From decrees entered after hearings by Dow, J., the administrator appealed.
C. A. McCarthy, for Andrew A.
McCarthy, administrator.
T. W. Lawless, for Jennie E.
Guiney, administratrix.
I. W. Sargent, for Helen G.
Griffin.
QUA, J. Andrew A. McCarthy is the administrator of the estate of his father, John F. McCarthy. The latter also left surviving him a daughter, Mary G. McCarthy. The fundamental and decisive question in each of these appeals is whether at the decease of John F. McCarthy on January
19, 1934, a policy of insurance upon his life in the Massachusetts Mutual Life Insurance Company was an asset of his estate available to pay the claims of his creditors or belonged individually to Andrew and Mary as the designated beneficiaries.
The judge found these facts: On April 4, 1930, John F. McCarthy changed the beneficiary of the policy so that instead of being payable upon his death to his own estate it was made payable to Andrew, Mary, and a son Daniel, since deceased. At that time John F. McCarthy was insolvent, and the administrator has represented his estate as insolvent. On February 17, 1930, his real estate had been attached in an action against him on a promissory note for $14,398.81. On April 3 he had substituted his children for his estate as beneficiaries under three other insurance policies. On April 7 he conveyed to his children various parcels of real estate. At about the same time he turned over his plumbing business to his son Andrew upon the latter's agreement to pay the outstanding indebtedness of the business. At the time of these transfers John F. McCarthy "stipulated," and the children "agreed," that the children should pay the future premiums upon the policies, the interest that might accrue upon loans which were outstanding against the policies and certain specified debts which John F. McCarthy owed. In order to secure the children for the payments which they agreed to make McCarthy's right further to change the beneficiaries was canceled. Thus McCarthy transferred to his children all of his property of every description. This was done "without fair consideration, for the purpose of keeping said property from his creditors and was fraudulent."
From uncontradicted evidence it appears that the insurance policy here in question when originally issued in 1922 was payable one tenth to an employee of the insured and nine tenths, or on the death of the employee the whole, to the estate of the insured. It was then in no part payable to the children of the insured. Before the transfer of April 4, 1930, it had become wholly payable to the estate of the insured. The judge ruled in effect that the policy was part of the estate of John F. McCarthy and was to be accounted for as such. The ruling was right. The appellant contends that...
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