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dition thereto the surplus apportioned by this society to this policy ; secondly, to convert the same into a paid-up policy for an equivalent amount, provided always that if the amount of said paid-up policy shall exceed the original amount of the assurance, a satisfactory certificate of good health from one of the society's medical examiners shall be required; thirdly, to withdraw in cash the share of the accumulated surplus apportioned by said society to this policy, and continue the policy in force on the ordinary plan; or fourthly, to continue the assurance for the original amount, and apply the entire tontine dividend to the purchase of an annuity, to reduce the subsequent premiums falling due upon this policy, provided, that in any year in which the amount derived from such annuity, together with the annual dividend on this policy, shall exceed the amount of premium due thereon, the excess shall be paid in cash to said Jacob M. Mertens or assigns.

“(6) After the completion of the tontine dividend period, while this policy shall remain in force, it shall be entitled to all the rights and privileges of ordinary policies of the same age and kind.

"(11) The contract between the parties hereto is completely set forth in this policy and the application therefor, taken together, and none of its terms can be varied or modified, nor any forfeiture under it waived. except by an agreement in writing, signed by one of the following officers, yiz. :

The application for this policy accords therewith, and assents to the provision limiting participation in the surplus to a time subsequent to the expiration of the tontine period in accordance therewith. The other policies in question, while not in all things identical, are so similar in their terms and provisions that it is unnecessary to recite them here. There is no variance that affects the legal proposition involved.

The bankrupt insists, first, that the policies are not transferable, and do not pass to the trustee in bankruptcy; and, second, that if they are, and would so pass, they have a surrender value, and that on payment thereof to the trustee he is entitled to retain same. He alleges that he has tendered the surrender value. The trustee insists that these policies have no cash surrender value within the meaning of the bankruptcy law, and that they constitute assets, and pass to the trustee. Evidence was given under the objection that the terms, etc., of the policies cannot be changed, enlarged, or varied to the effect that the Equitable Life Insurance Society of the United States had adopted a custom of paying a surrender value to the holders of such policies on the surrender of same in substantially the same manner as when a cash surrender value is provided for in the policy. In the policies in question not only is there a failure to provide for a cash surrender value, but the provisions are inconsistent with the existence of such a value. This, however, is not at war with the fact that the assurance association may be willing to pay money for the surrender of such policies. There is no pretense that this custom of the insurer formed a part of the contract between the parties, or that the insured could enforce the payment of a surrender value, or the payment of anything, on surrendering the policy. In short, the insurer might be willing to pay a surrender value and might not. Such payment would be optional with it. In the case of these policies the assurance association issuing them, at the date of the adjudication, was willing to pay a sum of money for their surrender. It was not obligated to do so. The agent of the association has stated the sums it is willing to pay. These sums the bankrupt has tendered the trustee.

Section 70 of the national bankruptcy law of July 1, 1898, c. 541, 30 Stat. 565 (U. S. Comp. St. 1901, p. 3451], provides :

"Sec. 70. Title to Property.-a 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 (1) documents relating to his property ; (2) interests in patents, patent rights, copyrights, and trade-marks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person; (4) property transferred by him in fraud of his creditors ; (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: 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 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.

While courts and judges of great learning have differed as to the proper construction of this section, it seems clear to this court that the policies in question here, containing as they do provisions beyond the ordinary life insurance policy, and in the nature of a contract for the investment of earnings under the policy, constitute assets, and have passed to the trustee, unless the bankrupt has prevented such effect by his action. This depends wholly on whether or not these policies have a "cash surrender value payable to the insured," J. M. Mertens, "lis estate or personal representatives," within the intent and meaning of section 70, above quoted. In business circles and among life insurance men the words cash surrender value” have a well-understood meaning, and no policy is understood to have a "cash surrender value” unless provided for in the policy so as to be enforceable by the insured. How can the holder of a policy say that it has a cash surrender value when such alleged value depends on the whim, caprice, or policy of the company issuing the insurance, and cannot be legally claimed or enforced by the holder of the instrument. The association might be willing to pay one day, entirely unwilling the next; willing to pay a considerable sum one day, only a nominal one the next. Is this the “cash surrender value spoken of in the bankruptcy law? This court thinks not. seem that, had Congress intended that every bankrupt holding a policy of insurance of the nature of these should retain the same as his own on paying to the trustee in bankruptcy the value thereof that the insurer might fix by its custom or otherwise, it would have used language appropriate to that end, and not an expression implying a value the insured has a legal right to demand and the insurer may be compelled to pay-a value generally understood to be provided for in the policy itself. This view of the statute is sustained by two cases: In re Welling (C. C. A. 7th Circuit) 113 Fed. 189, 51 (C. C. A. 151, and In re Slingluff, 106 Fed. 154, 5 Am. Bankr. R. 76. See, also, In re Steele, 98 Fed. 78, 3 Am. Bankr. R. 519; In re Diack, 100 Fed. 770, 3 Am. Bankr. R. 723; In re Grahs, 1 Am. Bankr. R. 165; In re Boardman, 4 Am. Bankr. R. 620, and Pulsifer v. Hussey, (Me.) 54 Atl. 1076, 9 Am. Bankr. R. 657. It would not be profitable to discuss these cases. In Re Welling, supra, all the judges in the Circuit Court of Appeals agreed as to the proper construction of the proviso in section 70 of the bankruptcy act of July 1, 1898, c. 5+1, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3151). It is urged that the other construction orght to be given, for the reason that if policies not containing a provision for a cash surrender value may not be held by the bankrupt on his paying to the trustee the amount the company is willing to pay for the surrender thereof, an injustice will be done, as such bankrupt will not be able to take and hold the policy for his benefit in the future, while the bankrupt holding a policy containing such a clause will hold his. It is also urged that a trustee in bankruptcy has no power to pay premiums and preserve a policy in force or mature it for the benefit of the estate or creditors. The first contention may be true. In answer it is sufficient to say that each holder of a policy will stand on its terms, and derive his benefits therefrom. This court dissents in toto from the second contention.

Suppose a policy payable to the insured (a bankrupt) or his executors, administrators, or personal representatives lacks but one payment of premium to mature it and add thousands of dollars to the estate, is the trustee, acting under the direction of the court, powerless to make the payment and add so materially to the assets of the estate? The court would not permit a long delay in the settlement of a bankrupt's estate, or allow the trustee to speculate on the life of the insured, but it would permit the doing of those acts clearly in the interest of the creditors. Take, for instance, this very policy, No. 274,445. It appears from the evidence that at the date of the adjudication September 15, 1903, the company would have paid only $5,90: 65 as an alleged surrender value had the policy then lapsed and I en surrendered. September 8, 1903, the receiver paid the last premium necessary to mature the policy to the end of the 20-year or tontine period. By making that payment it became a certainty that if Mertens died before March 8, 1904, the policy would be worth $20,000. In case he did not die (and he did not), then the policy, at the end of the tontine period, or March 8, 1904, would be worth $11,318.40, and it is worth that. Hence the payment by the receiver of $293, and a holding on for about six months, has added to the value of that one policy $5,412.75, a sum that either goes to the estate for creditors or to the bankrupt. This court is decidedly of the opinion that the receiver had authority to make that payment and hold onto the policy, and that it was his duty so to do.

The motion is granted, but the order will be settled before me at Utica, N. Y., September 6, 1904.

NERESHEIMER v. UNITED STATES.

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(Circuit Court, S. D. New York. December 29, 1903.)

No. 3,328. 1. CUSTOMS Duties-CLASSIFICATION-DRILLED PEARLS-SIMILITUDE.

Drilled pearls were imported, which, by a careful process of selection, matching, and assortment, requiring time and skilled labor, had been put in a condition in which they were collectively worth more than the aggregate value of the individual pearls. Held, that in this state they bore a closer resemblance to pearls strung than to pearls in their natural state, and that under the requirement of section 7, Tariff Act July 24, 1897, c. 11, 30 Stat. 205 [U. S. Comp. St. 1901, p. 1693], that any article not enumerated in the act “shall pay the same rate of duty which is levied on the enumerated article which it most resembles," they are dutiable at the same rate as the "pearls

strung" enumerated in paragraph 434 of said act, c. 11, § 1, Schedule N, 30 Stat. 192 [U. S. Comp. St. 1901, p. 1676), and not as "pearls in their natural state, not strung or set,” under paragraph 436, c. 11, § 1, Schedule N, 30 Stat. 192 (U. S. Comp. St. 1901, p. 1676), nor as "articles manufactured, in whole or in part, not provided for," under section 6 of said act, c. 11, 30 Stat. 205 [U. S. Comp. St. 1901,

p. 1693). 2. SAME--FINDING OF GENERAL APPRAISERS.

Findings of fact by the Board of General Appraisers will only be reviewed when the court is satisfied that such findings are unsupported by the evidence, or clearly against the weight of evidence, or where new evi

dence has been introduced which was not before the board. 3. SAME-RELIQUIDATION AT INCREASED RATE OF DUTY-RIGIT OF COLLECTOR

OF CUSTOMS.

Certain merchandise was imported, assessed for duty, passed into the possession of the owners, and was soll, and protests against the assessment were made by the importers. Subsequently, but within one year after the original liquidation of the entry, and while the protests were still pending before the Board of General Appraisers, the collector of customs reliquidated the entry, and collected duty at an increased rate. Held, that this action of the collector was lawful, under the provision in section 21, Act June 22, 1874, c. 391, 18 Stat. 190 [U. S. Comp). St. 1901, p. 1986), that the "settlement of duties shall, after the expiration of one year from the time of entry,

be final and conclusive upon all parties.” On Application for Review of a Decision of the Board of General Appraisers.

The decision under review (G. A. 5,146, T. D. 23,748) affirmed the assessment of duty by the collector of customs at the port of New York on merchandise imported by Neresheimer & Co.

W. Wickham Smith, for importers.
Henry C. Platt, Asst. U. S. Atty.

HAZEL, District Judge. The merchandise consists of two importations of drilled pearls--the first entered on March 28, 1901, comprising 39 pearls; another, of 45 pearls, on November 30, 1901—aggregating in value, according to invoices, to $123,804. Each importation was classified and assessed by the collector of customs for duty at the rate of 20 per cent. ad valorem, pursuant to section 6, Tariff Act July 24, 1897, c. 11, 30 Stat. 205 (U. S. Comp. St. 1901, p. 1693], which provides for that rate upon "articles manufactured, in 'whole or in part, not provided for" in said act. The importers pro

131 F.-02

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tested, claiming the pearls to be dutiable by similitude at 10 per cent. ad valorem under paragraph 436 of said act, c. 11, § 1, Schedule N, 30 Stat. 192 (U. S. Comp. St. 1901, p. 1676), reading as follows: “Pearls in their natural state, not strung or set,” or, in the alternative, under paragraph 435, c. 11, § 1, Schedule N, 30 Stat. 192 (U. S. Comp. St. 1901, p. 1676), providing for a duty of 10 per cent. ad valorem upon "diamonds and other precious stones advanced in condition, and not set.” On March 3, 1902—within one year from the entry on the first importation, and three months after entry on the second importation, and before the protests of the importers were acted upon by the Board of General Appraisers—the local appraiser amended his return on the invoices by declaring the pearls to have been in a completed condition, ready to be strung; and he accordingly reliquidated and assessed a duty upon them at 60 per cent., in accordance with paragraph 434, c. 11, § 1, Schedule N, 30 Stat. 192 (U. S. Comp. St. 1901, p. 1676), which includes "pearls set or strung. The pearls were surrendered to the importers and sold by them at the time of the original entry.

The Board of General Appraisers found the following specific facts: "(1) That the pearls the subject of each of these protests are drilled, and have, by a careful process of selecting, matching, and assortment as to size, quality, luster, shape, etc., which required time and skilled labor, been so as sorted that the collection of pearls thus produced is worth more than the ag. gregate values of the individual pearls composing it.

"(2) That in the condition imported they bore a closer similitude to pearls strung than to pearls in their natural state.

"(3) That the pearls the subject of these protests are identical in material with both 'pearls strung.' as provided for in paragraph 434, and 'pearls in their natural state,' as provided for in paragraph 436 of said act.”

The opinion of the board stated that in arriving at a conclusion here they have been guided by the Circuit Court of Appeals decision in the case of Tiffany v. United States, 112 Fed. 672, 50 C. C. A. 119. By that decision it was decided that loose pearls, unassorted, and of various sizes, colors, and quality, drilled, but not set or strung, are not covered by the provisions of paragraph 434, and accordingly are dutiable as pearls in their natural state. The government contends that the proofs show that the pearls are more similar to pearls strung than to those in their natural state, thus differentiating the facts from those of the Tiffany Case, but adopting the principle of that decision in the case at bar. The evidence as to whether the pearls were in a completed state, namely, whether by a skillful process of selection, matching, and assortment as to size, quality, luster, and shape, they possess a value in excess of the aggregate value of the individual pearls composing the collection, is in dispute. The testimony of Mr. Townsend, one of the importers, tends to show that the pearls received in bond were sent to him as loose pearls. He testified that he sold them as loose pearls, and that they could not be used as jewelry in that condition. Mr. Black, witness for the importers, after testifying that he bought the pearls in question from the importers, said they were not in a completed condition; that it was necessary to rebore and polish some of them. Mr. Reich, witness for the importers, testified that it was necessary, in order to

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