Source: http://www.chanrobles.com/usa/us_supremecourt/235/584/case.php
Timestamp: 2019-10-16 13:05:31
Document Index: 200713746

Matched Legal Cases: ['§ 8', '§ 70', '§ 12', '§ 19', '§ 8', '§ 8', '§ 8', '§ 70']

"upon the death of any person . . . leaving an estate, solvent or insolvent . . . it shall be the duty of the ordinary . . . to appoint . . . appraisers, . . . to set apart and assign to such widow and children . . . either in property or money, a sufficiency from the estate for their support and maintenance for the space of twelve months. . . ."
Citation issued, and thereafter the ordinary duly set apart to the family a year's support to be made out of the estate of L. K. Dicks in the hands of the trustee in bankruptcy. The widow subsequently applied to the referee for an order directing the trustee to pay over the amount so set apart. Her application was denied, and that ruling was reversed by the district court. 198 F.2d 3. The trustee took the case to the circuit court of appeals, which certified to this Court the following question:
Counsel for the appellant contends that this question should be answered in the negative. He insists that § 8 [Footnote 1] of the Bankruptcy Act does not create a right, but, as in this case, merely preserves the right, given by the state law, to have a year's support "out of the estate" left by the husband and father. It was then argued that, as the title to the property had vested in the trustee before the death of the bankrupt, Dicks did not die "leaving an estate," and there was therefore no estate out of which, under the Code of Georgia, the year's support could be set apart.
This reasoning would be applicable if the widow and children were asserting rights of inheritance under the statute of distribution. Moreover, there would be no answer to the argument advanced if the title, which vested in the trustee, was in its nature like that which would have been acquired if Dicks in his lifetime had made a deed of assignment to the trustee. But such is not the case. For, construing the statute as a whole, it will be seen that, while § 70 [Footnote 2] of the Bankruptcy Act vested title in the trustee primarily for the benefit of the creditors, there was no exception in favor of the bankrupt himself, and the transfer was also subject to a condition in favor of his family if he died before the chanroblesvirtualawlibrary
proceedings ended. If the bankrupt elected to claim a homestead, the exempt property, even though it had passed to the trustee, would, after identification and appraisal, be turned back into his possession. Chicago, &c. R. Co. v. Hall, 229 U. S. 515. The trustee's title was also subject to the condition that, if the bankrupt died during the pendency of the proceedings, the widow and children would be entitled to receive the allowance given them by the laws of the state of his residence. This latter limitation on the trustee's title was in connection with legislation on the subject of abatement.
For the statute seems to assume that, in the absence of a statutory provision to the contrary, the death of the bankrupt would have abated the proceedings. In that event, the property, although the title thereto had been previously vested in the trustee, would have been surrendered to the bankrupt's personal representatives, who would then have been in possession of an estate out of which, under the Georgia Code, a year's support could have been set apart to the widow and children. Congress need not have made any change in the general law, but, as in the Act of 1841, 5 Stat. 440, c. 9, could have allowed the suit to abate on the death of the bankrupt; or, as in the Act of 1867, 14 Stat. 522, § 12, c. 176, it could have permitted, without requiring, an abatement; or, as in the Act of 1800, 2 Stat. 27, § 19, c. 19, it could have made a mandatory provision that the proceedings should continue if the bankrupt died "after commission sued out," or it could have legislated, as in § 8 of the present statute, 30 Stat. 549, § 8, c. 541, where Congress went further than in any of the previous bankruptcy laws and made a universal and mandatory provision that "the death . . . of a bankrupt shall not abate the proceeding." That sweeping declaration, however, was coupled with the proviso that,
It is claimed that, under this interpretation, if the bankrupt died after the trustee had wholly or partially administered the estate, the widow and children could still enforce their rights to a year's support out of the bankrupt estate, even if the property had passed into the hands of purchasers. But this loses sight of the fact that the family had nothing in the nature of a lien which, during his lifetime, prevented the bankrupt or the trustee from disposing of his property. What was done by the court while the bankrupt was in life and a party to the proceeding was binding upon him, and therefore as effectual chanroblesvirtualawlibrary
There has been some conflict in the decisions dealing with the subject (In re McKenzie, 142 F.3d 4(6); In re Slack, 111 F.5d 3; In re Newton, 122 F.1d 3; In re Seabolt, 113 F.7d 7; In re Parschen, 119 F.9d 6; Thomas v. Woods, 173 F.5d 6, vacated,178 F.1d 05), but the foregoing considerations require that the question of the circuit court of appeals should be answered, Yes.
"§ 8. Death or insanity of bankrupts. -- a The death or insanity of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or become insane: Provided, That, in case of death, the widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the state of the bankrupt's residence."
"§ 70. Title to property. -- a The trustee of the estate of a bankrupt, upon his appointment and qualification . . . shall . . . be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except insofar as it is to property which is exempt. . . ."