Court Opinion

ID: 8809972
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:00:04.860607+00
Date Added: 2024-06-11T17:04:15.057093
License: Public Domain

HOUGH, Circuit Judge
(after stating the facts as above). [1] This record raises nearly the same questions as were disposed of in the case of this bankrupt’s brother (In re Samuels, 237 Fed. 796, 151 C. C. A. 38, reversed in Cohen v. Samuels, 245 U. S. 50, 38 Sup. Ct. 36, 62 L. Ed. 143), and in so far as “surrender value” is shown in any of the policies in question, the ruling of the Supreme Court suffices.
While admitting that under Hiscock v. Mertens, 205 U. S. 202, 27 Sup. Ct. 488, 51 L. Ed. 771, that phrase, as used in section 70 of the Bankruptcy Act July 1, 1898, c. 541, 30 Stat. 565 (Comp. St. § 9654), has a very wide signification, this respondent still contends that not all these policies had any surrender value at date of adjudication, because they were not then “in default” and had not “lapsed” for nonpayment of premiums.
The point is without substance for several reasons: (1) It was in 'effect urged in the Hiscock Case, supra, and disposed of with.the remark that “this is tantamount to saying that no policy can ever have a surrender value” — meaning no live active policy; (2) it appears by the proof here that if the insured wished either to sell his policy to the insurer or borrow upon it he could always do so at any time, and get the value at the last premium date; and (3) the test of “surrender value” under the act is whether the policy has a present cash value available to the insured bankrupt in accordance with fixed method, and by the exercise of his own unassisted will. In re Gannon, 247 Fed. 932, 160 C. C. A. 122.
This is, we believe, the result of the most recent ruling decisions, and in so far, as Re Hammel, 221 Fed. 66, 137 C. C. A. 80, conflicts therewith, it must be regarded as overruled.
[2] Respondent further urges that policies inuring to the bankrupt’s ■wife at date of adjudication are exempt under section 6 of the act (Comp. St. § 9590), recognizing the state exemption contained in section 52 of the Domestic Relations Law of New York (Consol. Laws, c. 14).
The claim would have been good, had the wife been the owner of the policies; but she was not. No beneficiary removable by the insured in invitum could be. The matter is one of state law, and we followed ■rulings of the state courts in so interpreting the New York statute in Re White, 174 Fed. 333, 98 C. C. A. 205, 26 L. R. A. (N. S.) 451. The more recent case of Grems v. Traver, 87 Misc. Rep. 644, 148 N. Y. Supp. 200, affirmed 164 App. Div. 968, 149 N. Y. Supp. 1085, is not in conflict. There as between husband and wife the latter was proved the absolute owner.
The trustee in bankruptcy is entitled to whatever cash value the policies in question had on the day of adjudication. Therefore the order under review is reversed, with costs, and the matter remanded for further proceedings not inconsistent with this opinion.