In re Scheld

• Citation: 104 F. 870
• Decision Date: 05 November 1900
• Docket Number: 647.
• Parties: In re SCHELD.
• Court: U.S. Court of Appeals — Ninth Circuit

104 F. 870

In re SCHELD.

No. 647.

United States Court of Appeals, Ninth Circuit.

November 5, 1900

A. M Johnson and Riordan & Lande, for petitioner.

Isaac Joseph, for respondent.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

ROSS Circuit Judge.

In this matter the sole question presented for decision is whether insurance policies having a cash surrender value, and exempt from execution under the laws of the state, pass to the trustee of the bankrupt as assets unless the insured secures to the trustee such cash surrender value. Section 6 of the present bankrupt act declares:

'That this act shall not affect the allowance to bankrupts of the exemptions which are prescribed by the state laws in force at the time of the filing of the petition in the state wherein they have had their domicile for the six months, or the greater portion thereof, immediately preceding the filing of the petition.'

This as will be seen, is a general provision, and, if it stood alone, would clearly exempt the policy in question; for under the law of California, such a policy is exempt. But in a later section of the bankrupt act (section 70) it is declared that the trustee of the estate shall become vested by operation of law with the title of the bankrupt, 'except in so far as it is to property which is exempt, to all * * * property which, prior to the filing of the petition, he could by any means have transferred, or which might have been levied upon and sold under judicial process against him: provided, that when any bankrupt shall have an insurance policy which has a cash surrender value payable to himself, his estate or personal representative, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated and continue to hold, own and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings; otherwise the policy shall pass to the trustee as assets. ' In respect to these provisions we agree with the views of Judge Shiras as expressed in Re Lange (D.C.) 91 F. 361, that section 6 'is the declaration of the general purpose of congress to secure to bankrupts the exemption provided for by the laws of the state in which they reside, but that this general purpose is limited by the...