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The Green Bag

870 was overruled. The Court said that section 6 is quite apparently couched in unlimited terms and is accompanied with no qualifications whatever. The opening clause of the section declares that the trustee after his appointment shall be vested "by operation of law with the title of the bankrupt . . . except insofar as it is to property which is exempt," and this is followed by an enumeration under six headings of the various classes of property which pass to the trustee. Clearly the words "except insofar as it is to property which is exempt" make manifest that it was the intention to exclude from the enum eration property exempt by the act. This qualification necessarily controls all the enumerations, and therefore excludes exempt property from all the provisions contained in the respective enumerations. The purpose of the proviso was to confer a benefit upon the insured bankrupt by limiting the character of the interest in a nonexempt life insurance policy which should pass to the trustee, and not to cause such a policy when exempt to become an asset of the estate. The attention of courts which seem disposed to narrow state exemptions wherever possible sould be given to the remarks of the United States Su preme Court generally, upon the subject of exemptions in this same case of Holden v. Stratton. The Court says: "It has always been the policy of Con gress, both in general legislation and in bankruptcy acts, to recognize and give effect to the state exemption laws. This was cogently pointed out by Cir cuit Judge Caldwell in delivering the opinion in Steele v. Buell, where he said (104 Fed. Rep. 972): From the organization of the Federal Courts under the Judiciary Act of 1789, the law has been that creditors suing in these courts could

not subject to execution property of their debtor exempt to him by the law of the state. . . . The same rule has obtained under the bankrupt acts, which have sometimes in creased the exemptions, notably so under the act of 1867, but have never lessened or dimin ished them. An intention on the part of Con gress to violate or abolish this wise and uniform rule observed from the creation of our Federal system should be made to appear by clear and unmistakable language.

Shortly after the decision in Holden v. Stratton was handed down, the mean ing of section 70a was further clarified by the Court is Hiscock v. Mertens, 205 U. S. 202. In this case the ques tion was whether the cash surrender value prescribed in section 70a, 5, must be one set forth or provided for in the policy or whether if the policy have a value by the concession or the practice of the company issuing it, such value would be sufficient. The Court held that it would. It pointed out that sec tion 70a, 5, made no distinction between policies which stipulated for the pay ment of a cash surrender value and those which did not; if a policy provided for a surrender value or if the practice of the company was to allow such a value, then the Court said, the proviso in the section 70a could be availed of by the bankrupt who could redeem a policy which would otherwise pass to the trustee by paying him the amount fixed by the company issuing it as the cash value of the policy. The policies which the trustee takes are those in which the bankrupt has an interest which is transferable. They must therefore be payble to his execu tors or administrators or assigns, and are subject to the right by the bank rupt to redeem as above set forth. It has been held that an endowment pol icy payable to the bankrupt if living at maturity passes to the trustee even if another person is named as beneficiary in the event that the in