Burlingham v. Crouse, ante, p.
229 U. S. 459,
and
Everett v. Judson, ante, p.
229 U. S. 474,
followed to effect that, under § 70a of the Bankruptcy Act, the
trustee is only entitled to the cash surrender value of insurance
policies on the life of the bankrupt at the time of the filing of
the petition, and that the bankrupt or his representative is
entitled to the balance of
Page 228 U. S. 480
the value thereof, and that the subsequent death of the bankrupt
had no effect on this division even though it occurred before
adjudication.
191 F. 325 reversed.
The facts, which involve the construction of § 70a of the
Bankruptcy Act and the ownership of policies of insurance on the
life of a bankrupt, are stated in the opinion.
MR. JUSTICE DAY delivered the opinion of the Court.
Harvey K. Partridge, trustee in bankruptcy of Benajah D.
Andrews, by petition filed in the United States District Court for
the District of New Jersey, sought to acquire the title to the
proceeds of certain insurance policies upon the life of Benajah D.
Andrews, bankrupt, deceased, a claim to such proceeds having been
made by the executrix of Andrews' estate. An order having been
entered in the district court in favor of the executrix, except as
to the cash surrender value of the policies, the Circuit Court of
Appeals for the Third Circuit, upon a petition to revise, reversed
the decree of the district court and ordered that the proceeds pass
entirely to the trustee. 191 F. 325. To review that decree, this
writ of certiorari was issued.
It appears from the finding of facts by the circuit court of
appeals that a petition in involuntary bankruptcy was filed against
Andrews on February 3, 1910; that, on April 4, 1910, he was
adjudicated a bankrupt, and on April 28th of the same year a
trustee was elected and qualified. It further appears that Andrews
died on February 15, 1910,
Page 228 U. S. 481
having at that time, and at the time of the filing of the
petition in bankruptcy, two policies of insurance upon his life,
one for $10,000, payable upon his death to his executors,
administrators, or assigns, and the other for $5,000, payable upon
his death to his estate. At the date of filing the petition in
bankruptcy, the $10,000 policy had a cash surrender value of
$14.93, and was subject to a loan of $4,481.39, and the $5,000
policy had a cash surrender value of $100. Under a stipulation
between the trustee and the executrix, the net proceeds of the two
policies were paid to the trustee, to be held until the title
thereto had been determined.
The district court decreed that the trustee was entitled to the
cash surrender value of the policies as of the date of the filing
of the petition, and that the bankrupt estate had no interest in
the balance of the proceeds of the policies. The circuit court of
appeals also held that the cash surrender value of the policies
must be ascertained as of the date of the filing of the petition in
bankruptcy. Construing § 70a of the Bankruptcy Act, it decided,
however, that the policies passed to the trustee, subject to the
right of the bankrupt to pay or secure to the trustee the cash
surrender value of the policies, and to continue to hold and own
them, but that this right was extinguished by his death before
adjudication.
This case was argued and submitted at the same time as the cases
of
Burlingham v. Crouse, ante, p.
229 U. S. 459,
and
Everett v. Judson, ante, p.
229 U. S. 474.
An application of the principles therein laid down requires the
reversal of the judgment of the circuit court of appeals, and it is
accordingly
Reversed.