In re L. Hammel & Co.

• Decision Date: 09 February 1915
• Docket Number: 184.
• Citation: 221 F. 56
• Parties: In re L. HAMMEL & CO.
• Court: U.S. Court of Appeals — Second Circuit

221 F. 56

In re L. HAMMEL & CO.

No. 184.

United States Court of Appeals, Second Circuit.

February 9, 1915

Emanuel S. Cahn, of New York City, for petitioner.

Lawrence B. Cohen, of New York City (Myron L. Lesser, of New York City, of counsel), for respondent.

Before LACOMBE, WARD, and ROGERS, Circuit Judges.

LACOMBE Circuit Judge.

The policy, which was issued by the New York Life Insurance Company August 25, 1903, insured the life of Max Hofmann for $3,000, for the benefit of his wife, Bertha Hofmann. It provided that the insured might change the beneficiary of the policy at any time by written notice to the company; also that he might at any time declare any beneficiary then named to be an absolute beneficiary, after which designation all right to change the interest of the beneficiary shall cease. If any beneficiary or absolute beneficiary should die before the insured, the interest of such beneficiary shall be payable to the executors or administrators of the insured. Hofmann never declared any absolute beneficiary. It is objected that this petition to revise should have been taken by or joined in by the bankrupt. In the view we take of the merits of the case, the objection seems unimportant.

The policy has no 'cash surrender value,' either provided for on its face, or established by concession and practice of the company, as in Hiscock v. Mertens, 205 U.S. 202 27 Sup.Ct. 488, 51 L.Ed. 771. It is contended that it had a 'loan value'; that is, under its provisions the insured might now borrow of the company about $2,000 on the sole security of the policy. This loan, however, would be made only in the event that the beneficiary consented to it and signed the note or agreement for repayment of said loan. Life insurance is property, and would as such pass to the trustee under the same conditions as other property, were it not for the proviso to section 70a, which was construed by this court in Re Judson, 192 F. 834, 113 C.C.A. 158 and by the Supreme Court in Burlingham v. Crouse, 228 U.S. 459, 33 Sup.Ct. 564, 57 L.Ed. 920, 46 L.R.A. (N.S.) 148, where the court says:

'True it is that life insurance policies are a species of property and might be held to pass under the general terms of subdivision 5, section 70a, but a proviso dealing with a class of this property was inserted and must be given its due weight in construing the statute.'

In the case last cited the beneficiary was the estate of the insured and the policy had a cash surrender; it was held that upon the payment of that sum to the...