Burlingham v. Crouse
Decision Date | 11 August 1910 |
Docket Number | 322. |
Citation | 181 F. 479 |
Parties | BURLINGHAM et al. v. CROUSE et al. |
Court | U.S. Court of Appeals — Second Circuit |
D Raymond Cobb and Irving L. Ernst, for complainants.
Newell Chapman & Newell, for defendant C. M. Crouse.
Before LACOMBE, WARD, and NOYES, Circuit Judges.
In April, 1902, Thomas A. McIntyre obtained from the Equitable Company two policies upon his life. They were limited life payment policies, and each provided that, upon death of the insured, the company would pay to his executors administrators, or assigns the sum of $100,000 in 50 annual payments or the sum of $53,000 in cash. On April 14, 1908 the policies were assigned absolutely to the firm of T. A McIntyre & Co. in which the insured was a partner. On April 24, 1907, they were assigned by T. A. McIntyre & Co. to the Equitable Company as collateral security to a loan of $15,370. We have searched the record in vain to find copies of the agreement with the insurance company by which it loaned the $15,370, and reserved a lien upon the policies to secure repayment. From the language used in a notice sent by it to Crouse, it may be inferred that they contained some provision to the effect that nonpayment of the amount due on or before the day of grace might be taken by the company as a surrender of the policy. On February 25, 1908, T. A. McIntyre & Co. assigned the policies to defendant Crouse as security for the return or repayment of the amount of certain stocks and bonds which he had loaned or was about to loan to the firm. On April 25, 1908, petition in involuntary bankruptcy was filed, and on May 21st the firm and all its members were adjudicated bankrupts. Plaintiffs were elected and qualified as trustees on July 24, 1908.
The suit was brought on the theory that these policies passed to the trustees as property of the bankrupts, that when the transfer to Crouse was made the firm was insolvent, and that he had reasonable cause to believe such transfer was preferential. The bill prayed that the assignment be held null and void as against the trustees, and that the insurance company pay the sum due under said policies to them.
Each policy provided for the payment of $2,643.11 as premium on or before the 9th day of April in each year; also, that the policy should lapse and be forfeit to the company on the nonpayment of any premium when due. A further clause, however, provided that, should default be made in the payment of any premiums, the insurer will waive such default and accept payment of said premium provided the amount thereof, with interest at 5 per cent. from the date of default, be tendered to it within 30 days after such default. On May 9th, the last day of grace for the payment of premiums on these policies, after petition in the bankruptcy was filed and receivers appointed, Crouse paid the insurance company $6,078.38 for premiums and interest, thus saving both policies from forfeiture. On July 29, 1908, McIntyre died, and the insurance company has paid into court the proceeds of said policies, less the amount of the loan, such proceeds being $90,698.32.
The first question to be determined is whether these policies passed to the trustees upon their appointment and qualification.
The relevant provisions of the bankrupt act (Act July 1, 1898, c. 541, 30 Stat. 565 (U.S. Comp. St. 1901, p. 3451)) are as follows:
etc.
The meaning and intent of Congress in enacting this proviso is in the opinion of the majority of the court...
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Mercer Nat. Bank of Harrodsburg v. White's Ex'r
...does not take jurisdiction. Burlingham v. Crouse, 228 U.S. 459, 33 S.Ct. 564, 568, 57 L.Ed. 920, 46 L.R.A. (N. S.) 148, affirming (C.C.A.) 181 F. 479. Policies of insurance without cash value, and those to the full extent of the insured's equity, are treated precisely as exempt property is ......
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Mercer National Bank v. White's Executor
...does not take jurisdiction. Burlingham v. Crouse, 228 U.S. 459, 33 S. Ct. 564, 568, 57 L. Ed. 920, 46 L.R.A. (N.S.) 148, affirming (C.C.A.) 181 F. 479. Policies of insurance without cash value, and those pledged to the full extent of the insured's equity, are treated precisely as exempt pro......
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