In re Mertens

• Decision Date: 13 August 1904
• Citation: 131 F. 972
• Parties: In re MERTENS et al.
• Court: U.S. District Court — Northern District of New York

131 F. 972

In re MERTENS et al.

United States District Court, N.D. New York.

August 13, 1904

This is an application for an order compelling the bankrupt, Jacob M Mertens, to assign, transfer, and set over unto Albert K Hiscock, as trustee in bankruptcy of the estates of the firm of J. M. Mertens' & Co., and of the individuals composing said firm, certain policies of life insurance. The matter was referred to C. L. Stone, Esq., of Syracuse N.Y., as special master to take evidence and report the facts with his findings and opinion. The report is that the policies in question passed to the trustee; that they have no cash surrender value; and that the trustee is entitled to take and hold them as against the insured, J. M. Mertens notwithstanding the fact that said bankrupt has tendered the trustee the alleged case value of said policies--that is, the sum the insurance company was willing to pay for a surrender thereof.

Lewis &amp Crowley, for trustee.

Wilson, Cobb & Ryan, for J. M. Mertens.

RAY District Judge.

The petition in bankruptcy herein was filed against the firm of J. M. Mertens & Co. and the individuals composing such firm or copartnership on the 18th day of August, 1903, and Albert K. Hiscock was duly appointed receiver of the estate, etc., of the alleged bankrupts. Thereafter, and on the 15th day of September, 1903, said firm and said individuals, including said Jacob M. Mertens, were duly adjudicated bankrupts, and on the 14th day of October, 1903, said Albert K. Hiscock was duly appointed trustee in bankruptcy of the estates of said bankrupts, both individually and as such copartners. Said trustee duly qualified. December 21, 1882, the Equitable Life Insurance Society of the United States issued its policy No. 252,314, assuring the life of Jacob M. Mertens. Prior to the institution of such bankruptcy proceedings this policy had become a simple life policy, payable to the wife of the assured, if living at his death; if not living, to his children, if any; and in default of child or children to the personal representatives of the assured. This policy concededly is so conditioned and incumbered, and the interest of the trustee therein, if any, is so remote and uncertain, that it is of no practical value to the estate, and it will not be further considered, and the bankrupt will be allowed to retain the same. March 8, 1884, said Equitable Life Assurance Society of the United States issued its policy No. 274,445, known as a 'semitontine' policy, on the life of said Jacob M. Mertens. By this policy said assurance society, after the presentation of satisfactory proofs of the death of said Mertens, promised to pay to his executors, administrators, or assigns (less any indebtedness to the society on account thereof) the sum of $20,000. On its face this policy provides that after payment of premiums for not less than three complete years of assurance, if the policy shall thereafter become void in consequence of default in payment of subsequent premium, said society will issue in lieu of such policy, a new paid-up policy, without participation in profits, in favor of said Jacob M. Mertens, his executors, administrators, or assigns, for the entire amount which the full reserve on said policy, according to the present legal standard of the state of New York, will then purchase as a single premium, calculated by the regular table for single premium policies not published and in use by the society; provided, however, that the policy shall be surrendered, duly receipted, within six months of the date of default in payment of premium. The policy further provides:

'This policy is issued and accepted upon the condition that the provisions and requirements printed or written by the society upon the back of this policy are accepted by the assured as part of this contract as fully as if they were recited at length over the signatures hereto affixed.'

Under the provisions and requirements referred to in the policy are these:

'(1) That this policy is issued under the semitontine plan, the particulars of which are as follows:

(2) That the tontine divided period for this policy shall be completed on the eighth day of March in the year nineteen hundred and four.

'(3) That no dividend shall be allowed or paid upon this policy unless the person whose life is hereby assured shall survive the completion of its tontine dividend period as aforesaid, and unless this policy shall be then in force.

'(4) That all surplus or profits derived from such policies on the semitontine plan as shall not be in force at the date of the completion of their respective tontine dividend periods, shall be apportioned among such policies as shall complete their tontine dividend periods.

'(5) That upon the completion of the tontine dividend period on 8th March, 1904, provided this policy shall not have been terminated previously by lapse or death, the said Jacob M. Mertens shall have the option, either: First, to withdraw in cash this policy's entire share of the assets-- i.e., the accumulated reserve, which shall be six thousand and forty-six 40/100 dollars, and in addition thereto the surplus apportioned by this society to this policy; secondly, to convert the same into a paid-up policy for an equivalent amount, provided always that if the amount of said paid-up policy shall exceed the original amount of the assurance, a satisfactory certificate of good health from one of the society's medical examiners shall be required; thirdly, to withdraw in cash the share of the accumulated surplus apportioned by said society to this policy, and continue the policy in force on the ordinary plan; or fourthly, to continue the assurance for the original amount, and apply the entire tontine dividend to the purchase of an annuity, to reduce the subsequent premiums falling due upon this policy, provided, that in any year in which the amount derived from such annuity, together with the annual dividend on this policy, shall exceed the amount of premium due thereon, the excess shall be paid in cash to said Jacob M. Mertens or assigns.

'(6) After the completion of the tontine dividend period, while this policy shall remain in force, it shall be entitled to all the rights and privileges of ordinary policies of the same age and kind. * * *

'(11) The contract between the parties hereto is completely set forth in this policy and the application therefor, taken together, and none of its terms can be varied or modified nor any forfeiture under it waived, except by an agreement in writing,...