New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-22
A COMPLICATED BANKRUPTCY CASE.

DEBTS SECURED By \ LIE INSURANCE POLICY.
On April 10, 1872, Frank Newland filed in
the United States District Court voluntary petition In
bankruptcy and he was adudicated a bankrupt on
April 3 Of the yoar. Among TIC debts proved
against his estate was by Lucy Van Antwerp, his
motherin-law, on Two promssory notes made by bin
without interest for money loaned to him by her at the
dates OF the notes, neither Of which due. They
amounted 10 $1,000 and the proof for $780, iho
bankrupt having paid $50 upon them before he
bankruptcy On April 10, 1870, the bankrupt
took ont O policy OF life insurance for $1,000,
payable to Lucy Van Antwerp as collateral security for
such debt. He paid the premiums on the policy every
three months the time of filing bis petition. After
ward The premiums. including those for the three
months during which the surrender value " Of the
policy was fixed as between the gnec aud Lucy Van
Antwerp, were paid with money furnished by her. In
the schedule OF the bankupts petition aud In the proof
OF debt by Lucy Van Antwerp, the fact that the policy
a collateral security for the debt was set forth
Prior to making any dividend OF the assets Of the
estate, the assignee and Lucy Van Antwerp BY agree
ment Bubmtted to Judge Batchford for decision the
following questions:
FIRST: Can the assignee require Lucy Van Antwerp
either TO surrender the policy to nm ana take aiy
dend on all her claim 10 retain the poilcy ana WIN
draw her proof of debts
Secondly II such election her part cannot be re,
CURED what shall taken tue value OF the coilterIl
security to be the debt so as TO arrive at
the amount which she is to IeceIve dividend from
the estate
in decision given in this case yesterday, Judge
Blatchford gers the frat question IN the negative
and says that the value Of the policy to be deducted
from the debt must be taken s3 - which was the
then cash value OF policy surrender OF the lie
insurance company. The tl3 Is, the Judge. was
credited the debt after making such credit the
debt less interest stood, for dividend, at
$32Os 20. On that sum. dividend OF 20 per cent was
declared and the amount OF such dividend s6h Ga. was
paid TO Lucy Van Antwerp March Is, lSIJ She re-
tanned the policy and kept 1t alive by paying the prc'n
ums which afterward became due After the dividend
paid, and during the life of the policy the bankrupt
died. and prior 10 tue declaring Of the second dividend
the following questions were certified to Judge Bafoh
ford for decision:
Fira: After credtng tho SO Is upon Lucy Van ANY
werps debt had the further estate, rgnI
Interest the policy has he now IN the poceels
secondly In case he has any snch rlghts, ~ Lucy
Van Antwerp 10 be allowed for any VI the following
her notes became due: premiums furnished ny bet pc
foro the valuation and credit or the tlS To- p'eIe
paid by her after that Can she, III elthtr case Ictn
the past and participate future divihehd or can te
assignee require withdraw from participation III
future divdendsi II IL entitled Ia the whole OF tue
1900 In the first instance, can she be required 70 io'n
or IN any give the assignee the Dcneh ol "nat ks
been already credited upon the original deot received
by her as n dividendf
John j.. Ill., counsel for the creditor contended That
the policy was her absolute property, subject 10 no
equity OF redemption by any person. that the value OF
the policy wa fixed and deducted from the debt shat