400 U.S. 18 (1970), 412, Lines v. Frederick
|Docket Nº:||No. 412|
|Citation:||400 U.S. 18, 91 S.Ct. 113, 27 L.Ed.2d 124|
|Party Name:||Lines v. Frederick|
|Case Date:||November 09, 1970|
|Court:||United States Supreme Court|
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
A bankrupt wage earner's vacation pay, accrued but unpaid at the time of filing of his petition, doe not pass to the trustee in bankruptcy as "property" under § 70a(5) of the Bankruptcy Act.
Certiorari granted; 425 F.2d 215, affirmed.
Per curiam opinion.
This case presents the question of whether a bankrupt wage earner's vacation pay, accrued but unpaid at the time of the filing of his petition, passes to the trustee in bankruptcy as "property" under § 70a(5) of the Bankruptcy Act, 30 Stat. 565, as amended, 11 U.S.C. § 110(a)(5). The facts are not in dispute. Respondent Frederick, employed by a large manufacturing company, had accrued vacation pay of $137.28 at the time he filed his petition. He could collect this sum either during the annual period when his employer shut down the plant in which he worked or on final termination of his employment. Respondent Harris had accrued vacation pay of $144.14, which he could draw either on termination or under a conventional voluntary vacation plan of his employer. In each case, the referee in bankruptcy made a "turnover order" requiring the bankrupt to pay to the trustee on receipt all of his accrued vacation pay, less one-half of that part accrued during the 30 days prior to the filing of the petition (the deducted sum being exempt under Cal.Code Civ.Proc. § 690.11 (Supp. 1970)).
The District Court affirmed the referee in both cases, but the Court of Appeals for the Ninth Circuit reversed, holding that accrued but unpaid vacation pay is not "property" under the statute, and therefore finding it
unnecessary to decide whether such accrued pay meets the further statutory requirement of being "transferable." As the Court of Appeals noted, its decision was squarely in conflict with that of the Court of Appeals for the Fifth Circuit in Kolb v. Berlin, 356 F.2d 269.
In Segal v. Rochelle, 382 U.S. 375, 379, we said that
[t]he main thrust of § 70a(5) is to secure for creditors everything of value the bankrupt may possess in alienable or leviable form when he files his petition. To this end, the term "property" has been construed most generously, and an interest is not...
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