October, pending the proceedings in bankruptcy, and immediately after his death Dodd, the trustee of his estate, filed this petition. The contention of the trustee was that the transfers of the policies were made with intent to hinder, delay, or defraud the creditors of the bankrupt, and, having been executed within four months prior to the filing of the petition in bankruptcy, were void, and that the policies vested in the trustee at the time of the adjudication in bankruptcy, as part of the assets of the bankrupt's es tate.

company answered the petition. Upon the hearing, it appeared that each of the insurance companies had issued a policy upon the life of John F. Morris, payable to his legal representatives; that the one by the Northwestern Company issued in 1890, the date of the insurance of the other not appearing. It further appeared that during the month of April, 1899, Morris surrendered his policy in the Mutual Reserve Fund Life Association, and the association thereupon issued a new policy, upon the same terms as the old, in which new policy Mrs. V. A. Morris, his wife, was the beneficiary, and that during the same month Morris assigned the policy which he held in the Northwestern Company to his wife, the assignment being accepted by the company. Morris's petition in voluntary bankruptcy was filed on the 29th day of the same month. He died in the following gested in Mews' English Digest, vol. 2, col. 330, | notice of an assignment of a policy is not reand Re Armstrong, Craw. & D. (Ir.) 37, hold quired where by the constitution of the insurthat the assignment of a policy without no- ance company all the assured are partners in tice to the office of the insurance company does the company. This case was, however, overnot take it out of the order and disposition of ruled in Thompson v. Speirs, 13 Sim. 469, which the assignor so as to prevent it from passing holds that an assignment by an insured of his to his assignee in bankruptcy, where notice of own policy is not notice to the company because the assignment was not given to the company. he is a partner in the company. And Williams v. Thorp, 2 Sim. 257, holds that notice to the company is necessary, although the company does not require such no tice to be given, and it is not customary to give it.

And Ex parte Colvill, Montagu Bankr. Cas. 110, holds that an assignment of a policy does not take it out of the order and disposition of the bankrupt within the statute of G Geo. IV. chap. 16, § 72, where notice of the assignment is not given to the office until long after the issuing of the commission in bankruptcy.

Ex parte Stevens, 4 Deacon & C. 117, holds that the burden of proving that notice of a deposit of a life policy by way of equitable mortgage was not given to the insurance company before the act of bankruptcy of the mortgagor rests upon the assignees in bankruptcy.

The following cases, in which the insurance companies were mutual ones, the assured participating in the profits, hold that the mere failure to give notice of the assignment to the company is not sufficient evidence that the bankrupt was the reputed owner of the policies, and that they were in his order and disposition: Ex parte Cooper, 2 Mont. D. & De G. 1; Ex parte Smith, 2 Mont. D. & De G. 213; Ex parte Heathcote, 2 Mont. D. & De G. 714, 6 Jur. 1001; Ex parte Rose, 2 Mont. D. & De G. 131.

The last case, that of Ex parte Rose. 2 Mont. D. & De G. 131, also holds that notice of the assignment if material would be presumed, as the company was a mutual one.

These cases have, however, been overruled by the later cases, which hold that notice of the assignment is as essential where the company in a mutual one, as in other cases.

Thus, Re Bromley, 13 Sim. 475, holds that express notice of a deposit of a life insurance policy by way of equitable mortgage is necessary, although the company is a mutual one. as the notice incident to the deposit resulting from the membership of the insured in the company is insuflicient.

And Er parte Pott, 12 L. J. Bankr. N. S. 33, 7 Jur. 159, known as Ex parte Arkwright, 3 Mont. D. & De G. 129, is to the same effect.

Duncan v. Chamberlayne. 11 Sim. 123. 4 Jur. 819, 10 L. J. Ch. N. S. 307, holds that

Section 67e of the bankrupt act of 1898 provides "that all. conveyances, transfers, assignments, or encumbrances of his property, or any part thereof, made or given by a person adjudged a bankrupt under the provisions of this act subsequent to the passage of this act and within four months prior to

And Ex parte Barnett, 1 De G. 194, holds that an insurance policy on the life of another, deposited by the one effecting it with his brokers as security for his individual debt, of which notice is given to the company, is removed from his order and disposition so as not to pass to his assignee in bankruptcy, although notice is not given of a subsequent change by which the policy is made to stand as security for a firm subsequently formed of which he is a member.

The same case holds that where a mortgagee of a policy on the life of another deposits it as security, and gives notice of such deposit to the insurance company, it removes the policy from his order and disposition, although he gives no notice of the deposit to his mortgagor.

And Ex parte Waithman, 4 Deacon & C. 412, holds that where the assignor is a director, and one of the firm to which the policy is assigned is an auditor of the insurance company, no further notice of the assignment is required.

Ex parte Patch, 12 L. J. Bankr. N. S. 44, 7 Jur. 820, holds that notice of the assignment is necessary, although one of the intermediate assignees is an agent of the company, and there is an indorsement on the policy that the company does not require notice.

And Ex parte Price, 13 L. J. Bankr. N. S. 15, 3 Mont. D. & De G. 586, holds that notice is necessary to an insurance company in which the insured does not participate in the profits, although the one who negotiated the transaction is the solicitor of the bankrupt's debtor on whose life the policy assigned was given.

And Re Henessy, Ir. 5 Eq. Rep. 259, 1 Con. & L. 559, 2 Dru. & W. 555. holds that notice to the insurance company of an assignment by a subagent as security is necessary where the policy was issued to him from the head office, and local agents had been directed not to transmit notices of assignments.

But Gale v. Lewis, 6 Q. B. 730. 16 L. J. Q. B. N. S. 119, 11 Jur. 780, holds that no further notice of the assignment is required, where one agrees to loan money to another on the security of a policy to be taken out by him, and directs his attorney to procure the policy, and the latter takes out a policy in a company of which he is agent, with authority to receive

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 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 stat

the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be null and void as against the creditors of such debtor, except as to purchasers in good faith and for a present fair consideration; and all property of the debtor conveyed," etc., "shall be and remain a part of the assets and estate of the bankrupt and shall pass to his said trustee, whose duty it shall be to recover and reclaim the same by legal proceedings or otherwise for the bene-ed, and continue to hold, own, and carry fit of the creditors." Section 70a of the act provides: "The trustee of the estate of a bankrupt, upon his appointment and qualitication shall be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt. to all (5) property which, prior to the filing of the petition, notices of assignment, and delivers it to the lender without its going into the hands of the borrower, although such agent did not mention to the head office of the company that the lender was the beneficial owner of the policy.

Re Russell, Craw. & D. (Ir.) 27, holds that notice of the assignment to the company is necessary to take the policy out of the order and disposition of the insured, where the polley was effected by the bankrupt himself; but, where it was effected by another and assigned to him before his bankruptcy and by him reassigned, notice of the assignment by him is not required.

And Ex parte Wood, 3 Mont. D. & De G. 315, 12 L. J. Bankr. N. S. 42, 7 Jur. 521, holds that a policy on the life of another, deposited by the bankrupt who was the mortgagee, remains in his order and disposition, although no notice of the mortgage to him was given to the company, where nouce of the deposit by him was not given either to the company or his mortgagor. Gibson v. Overbury, 7 Mees. & W. 555, holds that notice is not required where the policy, instead of being assigned, is deposited by the bankrupt with another as a mere lien to prevent the bankrupt from receiving the money thereon without notice to the one with whom it is deposited, and that the policy cannot be recovered by the assignees in bankruptcy in an action of trover.

This case is distinguished in Green v. Ingham, 36 L. J. C. P. N. S. 236. L. R. 2 C. P. 525. 16 L. T. N. S. 455, 15 Week. Rep. 841, which holds that notice is required where a policy is sold as security for an existing debt with the intention to pass the fund represented by the policy and the equitable right to recover thereon, and on condition that the sale shall be void if the debt is repaid, although the transferee thereafter pays the premiums on the pol

icy.

Ex parte Ibbetson, L. R. 8 Ch. Div. 519, 39 L. T. N. S. 1, 26 Week. Rep. 843, holds that a life insurance policy is a "thing in action" excepted from the reputed ownership clause within the English bankruptcy act of 1869, § 15. subd. 5, providing that things in action other than debts due the bankrupt in the course of his trade or business shall not be deemed goods or chattels within the meaning of such clause, and that, in consequence, the second mortgagee of such policy is entitled thereto as against the trustee in bankruptcy, although no notice of the second mortgage was given to the first mortgagee or to the insurance company until after the appointment of such trustee.

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." Under the view we take of the question presented for determination, it is immaterial that the policies of insurance were transferred by the bankrupt to his wife

(c)

Sufficiency of notice of assignment.

Very slight notice of the assignment is sufficient to remove the policy from the order and disposition of the bankrupt.

A few cases (Duncan v. Chamberlayne, 11 Sim. 123, 4 Jur. 819, 10 L. J. Ch. N. S. 307; Ex parte Cooper, 2 Mont. D. & De G. 1;. Ex parte Smith, 2 Mont. D. & De G. 213, 5 Jur. 874; Ex parte Heathcote, 2 Mont. D. & De G. 711-714, 6 Jur. 1001: Ex parte Rose, 2 Mont. D. & De G. 131) held that the notice of the assignor was sufficient where the company was a mutual one in which the assignor participated in the profits. These cases however, have been overruled by the later cases, such as Thompson v. Speirs, 13 Sim. 469, 14 L. J. Ch. N. S. 453, 9 Jur. 933, which holds that the assignment by the insured of his own policy is not notice to the company merely because he is a partner in the company.

Re Bromley, 13 Sim. 475, 9 Jur. 934, note, also holds that express notice to the company of a deposit of the policy by way of equitable mortgage is necessary, although the policy was effected with a mutual insurance company, as the notice incident to the deposit resulting from the membership of the insured in the company is sufficient.

And Ex parte Patch, 12 L. J. Bankr. N. S. 44, 7 Jur. 820, holds that the mere fact that one of the intermediate assignees of an insurance policy is an agent of the company is insufficient to take the policy out of the order and disposition of the assignor on his subsequently becoming bankrupt.

And Ex parte Price, 3 Mont. D. & De G. 586, 13 L. J. Bankr. N. S. 15, holds that the deposit positor in a company in which the assured does of a policy on the life of a debtor of the denot participate in the profits is insuflicient to take the policy out of the order and disposition of the one depositing it, where there was no other notice of the deposit than that of the solicitor of the depositor's debtor who negotiated the transaction.

Gaie v. Lewis, 6 Q. B. 730. 16 L. J. Q. B. N. S. 119, 11 Jur. 780, however, holds that there is sufficient notice of the assignment where one agrees to loan money to another on the security of a policy to be taken out by him, and directs his attorney to procure the policy, and the latter takes out a policy in a company of which he is agent, and delivers it to the lender without its going into the hands of the borrower, although such agent did not mention to the head office of the company

Dis

within four months prior to the filing of his cept the contingency of its becoming valuapetition in bankruptcy. Upon the hearing, ble at the death of the bankrupt if the premthere was no evidence submitted for the trus-iums are kept paid, does not vest in the trustee that either of the policies had any cash- | tee as assets of the estate;" and the court disurrender value, either at the time of the rected the trustee to deliver the policy to the transfer or at the time of the filing of the petitioners, the bankrupt and his wife. petition in bankruptcy, but there was much trict Judge Shiras, in Re Steele, 98 Fed. Rep. evidence in behalf of the defendants that the 78, while holding that where a bankrupt held policies had no such value at either of the a policy payable to himself, his heirs or legal times indicated. If the policies, then, had no representatives, the surrender value thereof cash-surrender value, we are of opinion that would be part of the assets of his estate in they would not vest in the trustee, as assets bankruptcy, very clearly intimated that this of the bankrupt's estate, even if no changes would not be so if the policy had no cashhad been made in them, and they had, to the surrender value. To the same effect, see Re date of his death, remained payable to his le- Lange, 91 Fed. Rep. 361. In the case of gal representatives. The exact point was de- Etna Nat. Bank v. United States L. Ins. Co. cided in Re Buelow, 98 Fed. Rep. 86, where 24 Fed. Rep. 770, it was held that a bill in it was held: "A policy of insurance on the equity could be maintained by creditors of life of a bankrupt, which has no cash-surren- a deceased debtor to reach premiums paid der value, and no value for any purpose ex- to a life insurance company in fraud of that the lender was the beneficial owner of the icy from his order and disposition, though he policy. gives no notice of the deposit to his mortgagor.

But Re Henessy, Ir. 5 Eq. Rep. 259, 1 Con. & L. 559, 2 Dru. & W. 555, holds that where a subagent of an insurance company takes out a policy on his own life, and assigns it as security, it remains in his order and disposition so as to pass to an assignee in bankruptcy subsequently appointed, where notice of the assignment was given to him alone, and the policy was issued to him from the head office, and local agents had been instructed not to transmit notices of assignments. The court also intimates very strongly that notice to him would have been insuflicient, even if the policy had been issued to him at the place where he acted as agent.

Ex parte Waithman, 4 Deacon & C. 412. holds that where the assignor is a director, and one of the firm to which the policy is assigned is an auditor, of the insurance company, their notice of the assignment is sufficient.

The

In Thompson v. Tomkins, 2 Drew. & S. 8, 8 Jur. N. S. 185, 6 L. T. N. S. 305, 10 Week. Rep. 310, a life policy was taken out to secure a debt from the insured to the beneficiary. insured afterwards mortgaged it to a third person, who gave notice to the executors of the beneficiary and to the insurance office. He aft erwards deposited it by way of a submortgage. the submortgagee giving notice to the executors, but not to the office. Such notice was held insufficient to take the policy out of the order and disposition of the one depositing it. In Re Langmead, 20 Beav. 20, a life insurance policy was assigned to a firm. On the dissolution of the firm the retiring partner agreed to assign it to the continuing partner, who assigned it as security, of which assignment notice was given to the company, after which the continuing partner became bankrupt, and the court held that the policy had been taken out of his order and disposition.

And Ea parte Barnett, 1 De G. 194, holds that an insurance policy on the life of another, deposited by the one effecting it with his brok ers as security for his individual debt, of which notice is given to the company, is removed from his order and disposition so as not to pass to his assignee in bankruptcy, although notice is not given of a subsequent change by which the policy is made to stand as security for a firm subsequently formed of which he is a member.

This case also holds that where the mortgagee of a policy on the life of another deposits

Although slight notice of the assignment is sufficient, a mere verbal remark by one who has deposited a policy on his life as security, to the secretary of the company, that he has made such deposit, is insufficient. Edwards v. Martin, L. R. 1 Eq. 121, 13 L. T. N. S. 236, 14 Week. Rep. 25, 35 L. J. Ch. N. S. 186.

And Er parte Carbis. 4 Deacon & C. 354. holds that a statement that the policy has been assigned, made in a loose conversation between the agent of the assignee and a clerk of the insurance company while the former is at the office of the company to pay a premium on the policy, is insufficient notice of the assignment.

In Re Young, Ir. L. R. 25 Eq. 372, a policy on his own life was assigned by the manager of a branch insurance oflice as security, and no notice of the assignment other than a very indefinite verbal one, giving neither the date nor purport of the assignment, was given to the insurance company. The assignor was afterwards adjudicated a bankrupt, and the assignees in bankruptcy gave a formal written notice of such fact to the company before any further notice was received from the assignee of the policy. The court held that the assignees in bankruptcy were entitled to the policy under the statute of 30 and 31 Vict. chap. 144, § 3. providing that no assignment of a policy shall confer the right to sue until a written notice of the date and purport of the assignment is given to the company, and that the date on which the notice is received shall regulate the priority of all claims under any assignment.

And West v. Reid, 2 Hare, 249, 12 L. J. Ch. N. S. 245, 7 Jur. 147, holds that there is not sufficient evidence of notice to the insurance company of the assignment of a policy from a mere memorandum written on the margin of the books of the company opposite the declaration of the insured "Letters to be sent to" specified persons, nor by the fact that the premiums were all paid by the assignee through such third persons, where no intimation was given that the payments were not made for the insured.

On the other hand, a notice to the effect that the policy had been assigned. without stating the name of the assignee, was held sufficient in Re Russell's Policy Trusts, L. R. 15 Eq. 26, 27 L. T. N. S. 706, 21 Week. Rep. 97.

And in Alletson v. Chichester, L. R. 10 C. P. 319, 44 L. J. C. P. N. S. 153, 32 L. T. N. S. 151. it as security, and gives notice of such deposit | 23 Week. Rep. 393, a statement by the attorney to the insurance company, it removes the pol- for the assignee to the secretary or actuary of

them, but that they could have no claim up to the policy for the purpose of making the on the insurance, even in such a case, be- surrender value or net reserve available to yond the amount of the premiums and the the estate." In Holt v. Everall, an English interest thereon. Under the bankruptcy act case, decided by the court of appeal, under of 1867, in Re McKinney, 15 Fed. Rep. 535, the British bankruptcy act of 1869, reported it was held: "An assignee in bankruptcy in 34 L. T. N. S. 599, it appeared that in has no insurable interest in the life of a 1870 a trader effected policies of insurance bankrupt, at least after his discharge. Up-on his own life. In the following year, wishon a policy on the life of the bankrupt, pay-ing his wife might have the benefit of the able at his death to his executors, adminis- policies, under the married woman's act, he trators, or assigns, with an equal premium surrendered them to the insurance company, payable annually during the bankrupt's life, and received in substitution therefor polithe only beneficial interest which passes to cies at the same premiums, payable on the the assignee in bankruptcy is its surrender same day, and entitled to the same privivalue or net reserve at the time of the bank- leges, as the former, and which provided ruptcy. Beyond that interest the policy, so that the sums assured should be paid to the far as respects any future insurance under wife. Within two years from the date of it, would be a burden rather than a benefit, the substitute policies the husband liquidatwhich the assignee is not authorized to con- ed, dying before the discharge. The trustee tinue, and the assignee takes the legal title claimed the insurance. It was held that, as the company at the time of paying a premium, where no notice is given to the company until that it had been assigned to his client, was held after the bankruptcy, although such notice is sufficient, the statute not at that time requiring given before the assignee in bankruptcy gives the notice to be in writing. any notice.

And Edwards v. Scott, 1 Mann. & G. 962, 2 Scott N. R. 266, 1 Drink. 6, 10 L. J. C. P. N. S. 11, 4 Jur. 1062, holds that the notice of the assignment is sufficient to take the question to the jury where the fact of the assignment was mentioned at several meetings of the assignor's ereditors and to a clerk at the insurance of fice on payment of a premium by the assignee, although the insurance company required written notice of the transfer of a policy.

And Ex parte Stright, 2 Deacon & C. 314, Montagu. Bankr. Cas. 502, 2 L. J. Bankr. N. S. 12, holds that a letter from the assignee to the secretary of the insurance office, stating that he is the holder of the policies, and asking what the office will give for their delivery for cancelation, is sufficient.

In Re Hickey, Ir. Rep. 10 Eq. 117, the holder of a policy on his own life agreed to assign it to his father to secure a debt due to him, and then assigned it to a third person by way of equitable mortgage to secure a present loan and future advances. All the parties resided in Ireland, and the policy required notice of an assignment to be sent to the head office in Lon

don.

The mortgagee prepared a notice of the assignment to the father of the insured, at whose request he signed and posted it in Ireland to the company's secretary in London. The insured was afterwards adjudicated a bankrupt and died. and the assignee in bankruptcy claimed the policy as being in his order and disposition. Ball, Lord Chancellor, held that as the notice was duly posted it might be presumed to have reached its destination. And Christian, Lord J. App., held that the mere posting was sufficient to take the policy out of the bankrupt's order and disposition "by the consent and permission of the owner" within the Irish bankrupt and insolvency act of 1857, 313, as such posting clearly indicated an intent not to let it remain in the bankrupt's possession.

(d) Time of notice of assignment. Notice of the assignment must be given before the bankruptcy to be effective. Thus, Er parte Caldwell, L. R. 13 Eq. 188, 41 L. J. Bankr. N. S. 55, 20 Week. Rep. 363, holds that a life Insurance policy handed over by the insured to the trustees under a marriage settlement before his bankruptcy remains in his order and disposition with the consent of the true owner,

And Re Webb, 36 L. J. Ch. N. S. 341. 16 L. T. N. S. 89, 15 Week. Rep. 529, holds that where the mortgagor of a life insurance policy leaves it off his balance sheet, and continues to pay the premiums, and the assignee in bankruptcy knows nothing of the policy, such assignee, instead of the mortgagee, is entitled to the policy or its proceeds, where the mortgagee gave no notice to the company until after the bankrupt's death, although the assignee in bankruptcy gave no notice, and the order for the sale of the policy was not made until after the mortgagee had given notice.

Re Russell's Policy Trusts, L. R. 15 Eq. 26, 27 L. T. N. S. 706, 21 Week. Rep. 97, on the contrary, holds that where notice of the assignment of the policy is given to the company before it receives notice of the bankruptcy, although after the bankruptcy actually occurs, the notice is sufficient.

And Re Styan, 1 Phill. Ch. 105, 6 Jur. 158, 2 Mont. D. & De G. 219, 11 L. J. Ch. N. S. 127, Aff'g 2 Mont. D. & De G. 213, 10 L. J. Bankr. N. S. 79, 5 Jur. 874, holds that where a policy is assigned before the act of bankruptcy, and notice thereof given to the company after such act, but without notice of it and before the fiat is issued, the policy does not pass, under 2 & 3 Vict. chap. 29, providing that any transaction with any bankrupt before the fiat issues shall be valid notwithstanding a prior act of bankruptcy, if the person so dealing with him had no notice at the time of any act of bankruptcy.

(e) Extent of creditor's interest.

In several cases in this subdivision the rights to the proceeds of the policy after the death of the insured are considered, but in all such cases rights therein had been acquired during his lifetime.

The amount paid by the assignee of the pol icy for premiums has in some cases been allowed, the balance going to the assignee in bankruptcy. Thus, in Re Armstrong, 1 Craw. & D. (Ir.) 37, the assignee in bankruptcy on having the policy adjudicated to him undertook to repay all sums paid by the assignee of the policy as premiums after the bankruptcy occurred.

And Schondler v. Wace. 1 Campb. 487, halds that where a bankrupt fails to deliver up a policy on his life, or discover it to the commissioners or his assignees, and afterwards assigns

the policies of 1870 had no surrender value, is important to see whether there was any the transaction of the following year was actual property-anything that could be not a settlement of property, under the called property-at the time when the husbankruptcy act of 1869, and that the widow band effected the policies in question. If was entitled to the policy money. In speak- the husband at that time gave up anything ing of the substitution of one policy for an- of real value as part of the consideration for other, James, L. J., in his opinion said: "If the new policies, there might be some quesit could be made out that this was a device tion; but I am satisfied that that which was to avoid the 91st section of the bankruptcy given up was not of the slightest value whatact of 1869, and that there was any actual ever, that there was nothing taken away property-anything which the court could from the creditors in point of substance, construe as of value-settled at that time, and that the transaction, as far as the credthen probably the court would say: We itors were concerned, was, in substance, excannot allow a device to be resorted to for actly the same as if the policies in 1871 had the purpose of making that thing appear to been made without any reference whatever be not a settlement which was in truth a set- to the existing policies of 1870, which the tlement. . . In that point of view it husband might have given up at any mo

it to one who pays up arrears on the premiums, | came bankrupt, and the policy was turned over nonpayment of which would soon have caused it to be forfeited. and thereafter assigns it for value, after which the bankrupt dies, the assignees in bankruptcy are entitled to recover the amount due on the policy, deducting the amount paid out by the assignees of the policy for premiums.