Opinion
December 6, 1937.
January 3, 1938.
Fraudulent conveyances — Life insurance policy — Change of beneficiary — Substitution of wife for estate.
1. In the absence of bad faith, it is not a fraudulent conveyance for an assured to restore his wife as beneficiary of a life insurance policy after she had consented to a change of beneficiary in order to permit her husband to use the policy as collateral for a loan subsequently repaid. [553-4]
Pleadings — Affidavit of defense — Sufficiency — Unsupported averment of fraud.
2. An averment, in an affidavit of defense, that a transfer of property, while insolvent, was fraudulent but which is not supported by averments of any facts showing the alleged insolvency, is a mere conclusion and insufficient to prevent judgment. [554]
Argued December 6, 1937.
Before SCHAFFER, DREW, LINN, STERN and BARNES, JJ.
Appeal, No. 284, Jan. T., 1937, from judgment of C. P. No. 4, Phila. Co., March T., 1937, No. 1405, in case of Chary Tinkler Newman v. Walter A. Newman and John A. Mullican, executors, et al. Judgment affirmed.
Proceeding in interpleader.
The opinion of the Supreme Court states the facts.
Rule by claimant for judgment for want of a sufficient affidavit of defense made absolute, opinion by FINLETTER, P. J. Defendants in interpleader appealed.
Error assigned was action of lower court in making absolute the rule for judgment.
Horace Michener Schell, for appellants.
Joseph J. Brown, with him John Arthur Brown and D. Alexander Wieland, for appellee.
This is an interpleader to determine the ownership of the proceeds of a life insurance policy issued by Ætna Life Insurance Company, on the life of Walter B. Newman, deceased. His widow is plaintiff and his executors are defendants. The policy was issued July 11, 1925. The beneficiary designated was his wife. The insured reserved the right to change the beneficiary. On April 9, 1932, the beneficiary was changed to the executors, administrators or assigns of the insured, and on April 11th the policy was assigned to Corn Exchange National Bank Trust Company of Philadelphia as collateral security for a loan. On or about January 4, 1937, the loan was paid and the bank executed a relinquishment of assignment of its interest in the policy, which, as appellant's history of the case states, was then "pledged by the insured to the [insurer] as security for a loan indebtedness and the money thus obtained used to pay the obligation" of the bank. At the same time Newman's wife was restored as beneficiary.
The defendant executors claimed on the ground that when the insured's wife was restored as beneficiary the insured was insolvent and that the attempt to restore her as beneficiary was, in the words of the affidavit of defense, an effort "to cheat and defraud his creditors and was in violation of the provisions of the Uniform Fraudulent Conveyances Act." No facts are stated as basis for the averments; the mere conclusion is ineffective; compare Punxsutawney v. Mitchell (No. 2) 320 Pa. 177, 180, 182 A. 374.
The learned court below held that the affidavit of defense was insufficient. The husband merely restored to the plaintiff the same policy benefit which she had relinquished so long as was necessary to secure the bank's loan to him; when the loan was repaid she was merely put in the position she had occupied before. There is nothing to show bad faith: see Stutzman, Administrator v. Fidelity Insurance Company, 315 Pa. 47, 172 A. 302. The situation is precisely what it would have been if, instead of formally changing the beneficiary, the wife had originally joined in the assignment as collateral and on payment of the debt the policy had been returned by the bank.
Judgment affirmed.