Turner v. Bovee, 8337.

• Decision Date: 07 December 1937
• Docket Number: No. 8337.,8337.
• Citation: 92 F.2d 791
• Parties: TURNER v. BOVEE.
• Court: U.S. Court of Appeals — Ninth Circuit

92 F.2d 791 (1937)

TURNER v. BOVEE.

No. 8337.

Circuit Court of Appeals, Ninth Circuit.

November 9, 1937.

Rehearing Denied December 7, 1937.

Walter A. McClure, McClure & McClure, Theodore S. Turner, pro se., and Hare, Turner & Maurier, all of Seattle, Wash., for appellant.

DeWolfe Emory and Poe, Falknor, Emory & Howe, all of Seattle, Wash., for appellee.

Before GARRECHT, MATHEWS, and HANEY, Circuit Judges.

MATHEWS, Circuit Judge.

Theodore S. Turner, as trustee in bankruptcy of the estate of Walter G. Bovee, bankrupt, appeals from an order of the District Court which confirmed an order of a referee in bankruptcy which sustained exceptions to the trustee's report of exempt property and held (contrary to the trustee's determination) that a certain insurance policy should be set apart and retained by the bankrupt as exempt property. The policy in question was issued by the Prudential Insurance Company of America¹ on February 11, 1926. It provides:

"The Prudential Insurance Company of America, in consideration of the application for this policy * * * * and of the payment, in the manner specified, of the premium herein stated, hereby endows and insures the person herein designated as the insured, for the amounts named herein, payable as specified * * *

"The insured, Walter G. Bovee.

"Face amount of insurance, twenty thousand dollars, payable at the home office of the Company, in Newark, New Jersey, twenty years after the date hereof, on the eleventh day of February, 1946, provided the insured be then living and this policy be then in force; or immediately upon receipt of due proof of the prior death of the insured while this policy is in force.

"Payable to the insured, if living twenty years after the date hereof, or, in case of the prior death of the insured, to Ambassador Hotel Company, Incorporated, its successors or assigns, beneficiary.

"Accidental death benefit, twenty thousand dollars, payable to the beneficiary in addition to the face amount of insurance, at the home office of the Company, in event of death by accident * * *

"If there be no beneficiary living at the death of the insured the amount of insurance payable shall be paid to the executors, administrators or assigns of the insured, unless otherwise provided in the policy. The right to change the beneficiary has been reserved by the insured."

On September 10, 1929, the insured exercised his right to change the beneficiary under the policy by designating his wife, Bessie C. Bovee, as such beneficiary, in place of the Ambassador Hotel Company. On October 29, 1935, the insured filed his petition praying to be adjudged a bankrupt, and the District Court, on the same day, made such order of adjudication. The above-mentioned policy was then in force, and had a cash surrender value of $7,841.04, payable to the bankrupt. In a schedule filed with his petition, the bankrupt claimed the policy² as exempt property. The trustee determined that the bankrupt was not entitled to the claimed exemption, and, accordingly, refused to set apart the policy as exempt property. Exceptions to the trustee's report were sustained by the referee and by the District Court. This appeal followed.

The Bankruptcy Act does not directly grant or define any exemptions, but directs, in section 6 (11 U.S.C.A. § 24), that bankrupts be allowed "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," thus making such state laws the measure of the right to exemptions. White v. Stump, 266 U.S. 310, 312, 45 S.Ct. 103, 69 L.Ed. 301. In this case, the bankrupt had, for the six months immediately preceding the filing of his petition, had his domicile in the state of Washington. Whether the exemption claimed by him should or should not have been allowed must, therefore, be determined by the laws of that state.

Section 7 of the Bankruptcy Act (11 U.S.C.A. § 25) provides that a voluntary bankrupt shall claim his exemptions in a schedule filed with his petition. Section 47a (11 U.S.C.A. § 75(a) provides that the trustee shall set apart the bankrupt's exemptions and report the items and estimated value thereof to the court as soon as practicable after his appointment. Section 70a (11 U.S.C.A. § 110(a) provides: "The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt, to all * * * (5) 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. When any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, 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...