In re Balsier
| Decision Date | 25 June 1914 |
| Citation | 215 F. 134 |
| Parties | In re BALSIER. |
| Court | U.S. District Court — Western District of Pennsylvania |
J Wallace Paul and George A. Foster, both of Johnstown, Pa for petitioner.
Thomas H. Hasson, of Pittsburgh, Pa., and F. C. Sharbaugh, of Edensburgh, Pa., for trustee.
The money payable as the proceeds of a policy of insurance taken out by the bankrupt prior to bankruptcy for his own benefit does not arise from real estate, but from a personal contract, and, upon distribution, will be awarded to the trustee in bankruptcy, and not to the judgment creditor of the bankrupt. The judgment creditor of the bankrupt, claiming a preference by reason of its lien on the real estate of the bankrupt, has no more title to the proceeds of the insurance policy than any other creditor.
The lien creditor is entitled to the proceeds of the insurance. Nichol's Appeal, 128 Pa. 428, 18 At. 333, 5 L.R.A. 597; O'Brien's Estate, 19 Pa.Co.Ct.R. 467.
A claim on the insurance money can arise only out of a contract, and one who has a lien only on the insured property has no claim to the insurance money. 19 Cyc. 887; 28 Cent.Dig.tit.'Insurance,"' § 1439; Mosser v Donaldson, 7 Sadler (Pa.) 277, 10 A. 766; Columbia Insurance Co. v. Lawrence, 35 U.S. (10 Pet.) 507, 9 L.Ed. 512; Ridley v. Ennis, 70 Ala. 463; Vandegraaff v. Medlock, 3 Port. (Ala.) 389, 29 Am.Dec. 256; Carter v. Rockett, 8 Paige (N.Y.) 437; Beach on the Law of Insurance, vol. 2, p. 581, Sec. 1117; Farmers' Loan & Trust Co. v. Penn Plate Glass Co., 186 U.S. 434, 22 Sup.Ct. 842, 46 L.Ed. 1234." ORR, District Judge.
This matter comes before the court upon a petition to review the action of the referee in disallowing the claim of the Pittsburgh Provision & Packing Company, creditor, as a preferred claim, and upon exceptions to the action of the referee.
The question is very simple. The petitioner had been a judgment creditor of the bankrupt for some years, when a fire occurred, destroying a building owned by the bankrupt and situate on land subject to the lien of petitioner's judgment. The petitioning creditor, after the fire, issued a writ of attachment execution upon its judgment and summoned the insurance company as garnishee, thereby trying to establish an equitable assignment of the proceeds of the insurance policy for its benefit as a lien creditor. Within four months after the issuance of such attachment execution proceedings in bankruptcy were entered against the owner of the insured premises and the defendant in the judgment. The proceedings upon the execution...
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