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Baxter House, Inc. v. Rosen

278 N.Y.S.2d 442, 27 App. Div. 2d 258 (1967)

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Baxter House, Inc. v. Rosen

New York Supreme Court, Appellate Division
278 N.Y.S.2d 442, 27 App. Div. 2d 258 (1967)

Facts

George Rosen had several life-insurance policies with his daughters, Irene and Roslyn (collectively, the daughters) (defendants), designated as beneficiaries. In total, George paid $290,000 in premium payments over the course of more than a decade. After George’s death, the daughters collected nearly $2 million in proceeds from the policies. Baxter House, Inc. (Baxter) (plaintiff) and Vanderbilt Towers, Inc. (Vanderbilt) (plaintiff) sued the daughters for a constructive trust on a portion of the proceeds. Baxter and Vanderbilt alleged that George wrongfully converted $24,000 and $19,000 from them and used the converted funds to pay the premiums for his life-insurance policies near the end of George’s life, when he had become insolvent. Baxter and Vanderbilt sought a constructive trust over the same proportionate share of the proceeds as the converted funds were of the premiums paid of the policy. The trial court granted the daughters’ motion to dismiss because only a small portion of the premiums had been paid with converted funds and because George did not have a fiduciary relationship with Baxter and Vanderbilt. Baxter and Vanderbilt appealed.

Rule of Law

Issue

Holding and Reasoning (Hopkins, J.)

Dissent (Rabin, J.)

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