Holden v. Stratton (191 U.S. 115)

Two separate proceedings were commenced in the district court of the United States for the district of Washington, on January 19, 1901, against D. N. Holden and Lizzie Holden, to the end that each be adjudicated a bankrupt, which were consolidated, and on the ensuing 25th of February they were, respectively, so adjudicated. The creditors of each of the bankrupts were the same.

Thereupon J. A. Stratton was duly elected trustee in bankruptcy of the estate of each of the bankrupts, and qualified as such. The bankrupts, and each of them, applied for exemption in their favor of two certain policies of life insurance in the hands of the trustee. D. N. Holden was insured, and Lizzie Holden was the beneficiary, in both, with the provision that if she should not survive him, payment should be made to his executors, administrators, and assigns.

The exemption was disallowed by the referee, who reported his action to the court. The bankrupts filed exceptions to the report, and the court on July 16, 1901, set it aside and adjudged the policies to be exempt. Stratton then filed a petition in the circuit court of appeals for the ninth circuit for a revision of this order. It was therein alleged among other things that the policies had a present cash surrender value combined of about $2,200. The circuit court of appeals, accepting the ruling of that court in the previous case of Re Scheld, 52 L. R. A. 188, 44 C. C. A. 233, 104 Fed. 870, held that the policies were not exempt, and decreed a revision of the order of the district court accordingly. 51 C. C. A. 97, 113 Fed. 141. From this decree an appeal was prayed to this court, and allowed February 12, 1902, and the record was filed here April 14, 1902. And subsequently a certificate of a justice of this court was filed herein that in his opinion the determination of the questions involved was essential to a uniform construction of the bankruptcy act throughout the United States.

The appeal was submitted on a motion to dismiss, and also on the merits.

Messrs. George Turner, P. P. Carroll and John E. Carroll for appellants.

Mr. Frederick Bausman for appellee.

Statement by Mr. Chief Justice Fuller:

Mr. Chief Justice Fuller delivered the opinion of the court: