Court Opinion

ID: 8799816
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:26:54.866007+00
Date Added: 2024-06-11T17:03:48.909198
License: Public Domain

TRIEBER, District Judge
(concurring). As all of us concur that the demurrer to the petition to reopen the bankruptcy proceedings was properly overruled, I do not deem it necessary to pass on the question whether the petitioner, by filing an answer after his demurrer had been overruled, waived any error in the ruling on the demurrer, and therefore do not concur in what is stated on that point by Judge SMITH.
[SI The fact whether a fund or any other property of the bankrupt is subject to seizure under execution at the time bankruptcy proceedings are instituted against him is not the test whether the interest of the bankrupt in the fund or property passes to the trustee. Under section 70a(5) of the Bankruptcy Act (Comp. St. 1913, § 9654), all property, which prior to the filing of the petition he could by any means have transferred, passes to the trustee. As stated in Re Wright, 157 Fed. 544, 85 C. C. A. 206, 18 L. R. A. (N. S.) 193:
“If they aro property which can by any means be transferred, the creditors of the bankrupt are entitled to the benefit of them, however little they may bring. Marketability and assignability are quite distinct.”
There are many equitable interests which, if owned by the bankrupt, may be of value and increase the assets of the estate, and yet not be subject to seizure on execution; but, being transferable, they will pass to the trustee. Thus it has been held that a seat on the Stock Exchange, which can only be transferred with the consent of the officers of the Exchange, will pass to the trustee, if it has a value. Page v. Edmunds, 187 U. S. 596, 601, 23 Sup. Ct. 200, 47 L. Ed. 318. A liquor license, if of any value and transferable, although it requires the consent of some official board, will pass to the trustee. Fisher v. Cushman, 103 Fed. 860, 43 C. C. A. 381, 51 L. R. A. 292. Life insurance policies payable to some other person, but with the right of the bankrupt to change the beneficiary, and endowment or tontine policies payable to the bankrupt, if living when it matures, but in case of his death to some member of his family, have all been held to pass to the trustee of the bankrupt. In re Coleman, 136 Fed. 818, 69 C. C. A. 496; In re White, 174 Fed. 333, 98 C. C. A. 205, 26 L. R. A. (N. S.) 451; In re Orear, 178 Fed. 632, 102 C. C. A. 78, 30 L. R. A. (N. S.) 990. That vested remainders pass to the trustee seems to me beyond question. In re Arden (D. C.) 188 Fed. 475.
[7] The question for determination, therefore, is whether the bankrupt’s interest in the trust fund as created by the decree of the circuit court for the city of St. Louis, and set out in the opinion of Judge SMITH, was a vested remainder. In Doe v. Considine, 6 Wall. 474, 18 L. Ed. 869, the court defines vested and contingent remainders as follows:
“Tile vested remainder is where a present interest passes to a certain and defined person but to be enjoyed in futuro. There must be a particular estate to support it. The remainder must pass out oí the grantor at the creation of the particular estate. It must vest in the grantee during the continuance of the estate, eo instante that it determines. A contingent remainder is where the estate in remainder is limited either to a dubious or uncertain person, or upon, the happening of a dubious or uncertain event.”
*870See, also, Johnson v. Washington L. & T. Co., 224 U. S. 225, 237, 238, 32 Sup. Ct. 421, 56 L. Ed. 741.
And this is the rule established by the Supreme Court of Missouri. Collier’s Will, 40 Mo. 287; Buxton v. Kroeger, 219 Mo. 224, 117 S. W. 1147. Fearne on Remainders lays down the rule to be that:
“Tlie uncertainty of remainders ever taking effect in possession does not make the remainder contingent, if in other respects it has the essential requisites of a vested remainder.”
On page 216 the same author says:
“It is not the uncertainty of ever taking effect in possession that makes a remainder contingent, for to that every remainder for life on entail must be liable, as the remaindermen may die, or die without issue before the death of the tenant for life. The present capacity of taking effect in possession, if the possession is to become vacant, and not the certainty that the possession will become vacant before the estate limited in remainder determined, universally distinguishes a vested remainder from one that is contingent.”
See also Ætna Life Insurance Co. v. Hoppin, 214 Fed. 928, 131 C. C. A. 224.
The fact that the trustee is authorized to pay a greater sum to the -mother than $900 per annum, if it becomes necessary, and that he is to pay the cost of her last illness, burial, and for a monument over her grave, at a cost not to exceed $200, does not make the estate contingent, although it is uncertain what amount there will be for distribution among the remaindermen, but not uncertain as to who is to participate in the distribution, though the amount be uncertain.
The fund consisted of $18,000. Invested at 5 per cent., the income would be $900 per annum; but, if the truátee should find an investment at a higher rate, it would produce a greater income than the $900 provided for. On the other hand, if the investment .is at less than 5 per cent., it would produce a smaller sum than the $900, and would necessitate the use of some of the principal. If these facts would make a remainder contingent, then very few would be vested. A testator may leave a large fund to trustees to be held in trust for the suitable maintenance of the widow, and for the maintenance and education of the children, and after the widow’s death the fund to be divided among his children. What a suitable allowance to the widow and the maintenance and education of the children will cost is uncertain, and no one can tell what the fund will amount to when the distribution is made, but this would not make the ultimate remainder contingent.
The New York cases relied on are not in point. In Hobson v. Hale, 95 N. Y. 588, the language used in the will was that until the time of the death of the last annuitant the donees could not be ascertained, as it was to be “divided among my grandchildren per stirpes,” and the court held that, as it could not be ascertained how many grandchildren would be then living, the remainder was contingent. In Vincent v. Newhouse, 83 N. Y. 505, the testator bequeathed certain lands to his wife for life, and at her death the executor was directed to sell the lands and divide the proceeds among three of his children and the children of others, share and share alike, and it was held that until the land *871was converted into money the subject-matter of the devise did not exist, and there could therefore be no vested remainder. In Shipman v. Rollins, 98 N. Y. 311, the facts were like those in Vincent v. Newhouse, and the same conclusion was reached.
Remainders can only take effect on the happening of a certain event, usually the demise of the life tenant, or first taker, and, if this makes them contingent, there would never'be any vested remainders. In this case the decree, establishing the rights of the parties, specifically provides that upon the death of Mary Pollack the trustee is to pay the expenses of her last illness, the funeral expenses, and a reasonable sum, not exceeding $200, for a monument at her grave, and pay over the balance of the principal fund and unexpended income to the nine children named, in equal shares; the bankrupt being one of them. This,' in my opinion, created vested remainders to the fund in the hands of the trustee.
The petition to revise should be denied.