Bowers v. Reinhard, 5739.

• Decision Date: 12 July 1935
• Docket Number: No. 5739.,5739.
• Citation: Bowers v. Reinhard, 78 F.2d 776 (3rd Cir. 1935)
• Parties: BOWERS et ux. v. REINHARD.
• Court: U.S. Court of Appeals — Third Circuit

78 F.2d 776 (1935)

BOWERS et ux. v.REINHARD.

No. 5739.

Circuit Court of Appeals, Third Circuit.

July 12, 1935.

Edwin K. Kline, of Allentown, Pa., for appellants.

Henry L. Snyder and Julius M. Rapoport, both of Allentown, Pa., for appellee.

Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.

THOMPSON, Circuit Judge.

This is an appeal from a decree of the District Court for the Eastern District of Pennsylvania.Mark T. Bowers, the appellant, became a bankrupt in 1933.His trustee in bankruptcy took possession of three contracts between Bowers and the Equitable Life Assurance Society of the United States.Bowers and his wife petitioned for the return of the contracts on the ground that they were exempt from claims of creditors under the provisions of the Pennsylvania Act of June 28, 1923, P. L. 884, § 1 (40 PS Pa. § 517).The referee directed the trustee in bankruptcy to deliver the contracts to Bowers.The District Court reversed the order of the referee.

In 1931 Bowers purchased two of the contracts in suit; the first for the sum of $1,000, and the second for $5,000.In 1932he purchased the third contract for the sum of $12,000.Except for the dates and amounts, the contracts are identical.They are designated "single premium retirement annuity" contracts.They provide that Bowers should receive a monthly annuity at the age of sixty-five for the remainder of his life; that he should have the option to surrender the policy and receive the cash value; and that at any time he should have the right to change the beneficiary or to assign the contract.The refund clauses of the contracts provide that, if Bowers should die before the first payment, his wife would receive the death benefits in an amount to be determined in accordance with an agreed schedule; if, at the death of Bowers, no designated beneficiary were living and the contracts had not been surrendered or assigned, the benefits would be paid to his children or, in the absence of children, to his executor or administrator; and if Bowers should fail to make an election during his lifetime and were survived by his wife, she might designate the person to whom any amount remaining unpaid at her death should be paid.

The Pennsylvania Act of June 28, 1923, supra, provides that: "The net amount payable under any policy of life insurance or under any annuity contract upon the life of any person, heretofore or hereafter made for the benefit of or assigned to the wife or children or dependent relative of such person, shall be exempt from all claims of the creditors of such person arising out of or based upon any obligation created after the passage of this act,...