Court Opinion

ID: 3885542
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:15:31.043544+00
Date Added: 2024-06-11T07:42:03.010154
License: Public Domain

I dissent. The right of the insured to change the beneficiary of the policies, being a power which he could exercise for his own benefit, was property both under the general principles of law and under the express terms of the bankrupt act, and it passed to the trustee in bankruptcy, under the statute expressly providing that all property not exempt, including such a power, should pass to the trustee. Earle v. Maxwell,86 S.C. 1; In re Hettling, 175 Fed. 65; In re Dolan, 182 Fed. 949; Clark v. Equitable Life Ins. Society, 143 Fed. 175;In re Whepley, 169 Fed. 1019; In re Wright, 157 Fed 544;In re Slingluff, 106 Fed. 154; In re White, 174 Fed. 333, 26 L.R.A. (N.S.) 451; In re Orear, 178 Fed. 632, 30 L.R.A. (N.S.) 990; In re Andrews, 191 Fed. 325, 41 L.R.A. (N.S.) 123.
It is argued that it did not pass in this instance, however, for the reason that the policy was payable to the wife of the insured and so stood at the date of the petition and adjudication in bankruptcy, and such a policy is expressly exempted from the claims of creditors of the insured by section 2721 of Civil Code of the State. This argument would be sound if the Constitution of this State did not expressly forbid that the constitutional exemption to the husband and wife jointly should not exceed $1,000.00 real estate and $500.00 personal property, which exemption was claimed and allowed. But for this provision of the Constitution, it would have been within the legislative power to extend the constitutional exemption to include life *Page 47 
insurance policies. Holden v. Stratton, 198 U.S. 202,49 L. Ed. 1018.
The bankrupt statute did not permit Sanders to retain the policies by tendering to the trustee the cash surrender value, because it is admitted in the agreed statement of facts that they had no cash surrender value, and that the insurance company would not have paid any money for them at the date of the adjudication in bankruptcy or at any time prior to the death of Sanders. This admission excludes the case from the provision of the bankrupt act allowing the bankrupt to retain an insurance policy on payment of the cash surrender value, and takes it out of the rule laid down in Hiscock v. Martens, 205 U.S. 202,51 L. Ed. 771, that policies having a cash surrender value within the meaning of the act embrace those which either by their terms or by the practice or concession of the company issuing them have such value.