Blum v. State, 94 Md. 375, 56 L.R.A. 322,, that decision. A party is privileged from 51 Atl. 26.

Assistant Attorney General Harr argued the cause and filed a brief for defendant in

error:

producing the evidence, but not from its production. The transfer by bankruptcy is no different from a transfer by execution of a volume with a confession written on the fly leaf. It is held that a criminal cannot The admissibility of the bankrupt's books protect himself by getting the legal title to and papers, lawfully transferred to his trus- corporate books. Wheeler v. United States, tee by operation of § 70 of the bankruptcy | 226 U. S. 478, ante, 309, 33 Sup. Ct. Rep. act of July 1, 1898, in a criminal proceed-158. But the converse proposition is by no ing against the bankrupt for an offense created by § 29b of the same act, is determined by the cases of Adams v. New York, 192 U. S. 585, 48 L. ed. 575, 24 Sup. Ct. Rep. 372; and Re Harris, 221 U. S. 274, 55 L. ed. 732, 31 Sup. Ct. Rep. 557. See also Kerrch v. United States, 96 C. C. A. 258, 171 Fed. 366; United States v. Halstead, 38 App. D. C. 69.

To infringe the 5th Amendment it is necessary not only that the documents should contain accounts of the party's private affairs (Wilson v. United States, 221 U. S. 361, 55 L. ed. 771, 31 Sup. Ct. Rep. 538, Ann. Cas. 1912 D, 558; Wheeler v. United States, 226 U. S. 478, ante, 309, 33 Sup. Ct. Rep. 158), but also that they should be taken from his custody for the purpose of disclosing those affairs in a criminal proceeding.

Wigmore, Ev. § 2263.

458] Mr. Justice Holmes delivered the opinion of the court:

This is an indictment for concealing money from the defendant's trustee in bankruptcy. The defendant was convicted and sentenced subject to exceptions which raised in different forms the questions whether his books properly were admitted against him, and whether the evidence warranted the verdict.

On the first point the facts are simply that the books had been transferred to the trustee in accordance with § 70 of the bankruptcy act of July 1, 1898 [30 Stat. at L. 565, chap. 541, U. S. Comp. Stat. Supp. 1911, p. 1511], and were produced before the grand jury and before the petit jury at the trial. That the transfer lawfully could be required is established by Re Harris, 221 U. S. 274, 55 L. ed. 732, 31 Sup. Ct. Rep. 557. But the defendant lays hold of an expression in that case, "the properly careful provision to protect him from use of the books in aid of prosecution," as an intimation that the books could not be put to such a use.

Courts proceed step by step. And we now have to consider whether the cautious statement in the former case marked the limit

means true, that he may keep the protection from the introduction of documentary evidence that he would have had while he retained it, after the title and possession have gone to someone else.

It is true that the transfer of the books may have been *against the defendant's [459 will, but it is compelled by the law as a necessary incident to the distribution of his property, not in order to obtain criminal evidence against him. Of course, a man cannot protect his property from being used to pay his debts by attaching to it a disclosure of crime. If the documentary confession comes to a third hand alio intuitu, as this did, the use of it in court does not compel the defendant to be a witness against himself.

As to the question of evidence, it is enough to say that there was evidence tending, as far as it went, to show that the defendant foresaw what was coming and attempted to save something from the wreck. There is no certificate that all the evidence is before us, and we should not be warranted in declaring as matter of law that the gov ernment did not make out a case. See Seigel v. Cartel, 90 C. C. A. 512, 164 Fed. 691.

The decision in BUBLINGHAM V. CROUSE, of the law in a case where no rights, if there when considered in connection with the two were any, were saved when the books were other opinions handed down on the same transferred. The answer was implied in day in Everett v. Judson, 228 U. S. 474.

surrender value available to the bankrupt | Bankruptcy
at the time of bankruptcy as a cash asset do
not pass to the trustee in bankruptcy, under
the bankrupt act of July 1, 1898 (30
Stat. at L. 565, chap. 541, U. S. Comp. Stat.
Supp. 1911, p. 1511), § 70a, subd. 5, which,
though investing the trustee with the title
to property which, prior to the filing of the
petition, he could by any means have trans-
ferred, or which might have been levied upon
and sold under judicial process against him,
provides that a bankrupt, when the cash
surrender value of insurance policies having
such value has been ascertained, may pay
or secure such sum to the trustee, and con-
tinue to hold and own them free from claims
of creditors, and that otherwise the policies
shall pass to the trustee as assets.

[For other cases, see Bankruptcy, VI. a, in
Digest Sup. Ct. 1908.]

post, 927, 33 Sup. Ct. Rep. 568, and Andrews | as used in this statute, and held in Hiscock v. Partridge, 228 U. S. 479, post, 929, 33 Sup. Ct. Rep. 570, together with the two earlier decisions by the same court in Hiscock v. Mertens, 205 U. S. 202, 51 L. ed. 771, 27 Sup. Ct. Rep. 488, and Holden v. Stratton, 198 U. S. 202, 49 L. ed. 1018, 25 Sup. Ct. Rep. 656, 14 Am. Bankr. Rep. 94, covers this matter in about all its phases, and solves what have heretofore been somewhat perplexing questions, and renders unnecessary a review of the numerous and conflicting decisions of the lower Federal

Partridge v. Andrews, 41 L.R.A. (N.S.) 123, 112 C. C. A. 69, 27 Am. Bankr. Rep. 393, 191 Fed. 325; Kinzie v. Winston, 4 Nat. Bankr. Reg. 21, 56 Ill. 56; Wynehamer v. People, 13 N. Y. 396; Jackson v. Housel, 17 Johns. 281.

Prior to the present decision, it had been repeatedly held in the second circuit that the interest of the bankrupt in all policies of life insurance, payable to his estate, vested

See same case below, 104 C. C. A. 227, in the trustee, subject to redemption by the 181 Fed. 479.

The facts are stated in the opinion.

Mr. Dorr Raymond Cobb argued the cause, and, with Mr. Irving L. Ernst, filed a brief for appellants:

bankrupt, when they had either technically or as a matter of fact or custom, a cash surrender value, upon his paying such value to the trustee.

Re Coleman, 69 C. C. A. 496, 136 Fed. 818, 14 Am. Bankr. Rep. 461; Re White, 26 The policies in question constituted prop- L.R.A. (N.S.) 451, 98 C. C. A. 205, 23 Am. erty which the bankrupts could have trans- Bankr. Rep. 90, 174 Fed. 333; Re Hettling, ferred. 23 Am. Bankr. Rep. 161, 99 C. C. A. 87, 175 Re Slingluff, 5 Am. Bankr. Rep. 82, 105 Fed. 65; Van Kirk v. Vermont Slate Co. 15 Fed. 502. Am. Bankr. Rep. 239, 140 Fed. 38; Re MerPolicies are property irrespective of their tens, 15 Am. Bankr. Rep. 701, 73 C. C. A. value. 561, 142 Fed. 445; Hiscock v. Mertens, 205 Re Roger Brown & Co. 28 Am. Bankr. Rep. U. S. 202, 51 L. ed. 771, 27 Sup. Ct. Rep. 488. 340, 116 C. C. A. 386, 196 Fed. 758.

The policies were valuable.

See also Remington, Bankr. § 1131, p. 644; Re Wright, 18 L.R.A. (N.S.) 193, 85 C. C. rupt 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. When the purpose of the proviso is thus ascertained, it becomes apparent that to maintain the construction which the argument seeks to affix to the proviso would cause it to produce a result diametrically opposed to its spirit and to the purpose it was intended to subserve."

the proviso and with § 6 of the bankruptcy act, providing that "this act shall not affect the allowance to bankrupts of the exemptions which are prescribed by the state laws in force at the time of the filing of the petition." 30 Stat. at L. 548, chap. 541, Ú. S. Comp. Stat. 1901, p. 3424. Before the decision of the United States Supreme Court in Holden v. Stratton, 198 U. S. 202, 49 L. ed. 1018, 25 Sup. Ct. Rep. 656, 14 Am. Bankr. Rep. 94, the cases were divided on the question as to whether § 70a qualified It may therefore be considered as set§ 6 so as to require the bankrupt to pay the tled, so long as the bankruptcy statute is cash surrender value to the trustee even preserved in its present form, that the where the policy was exempt under state words "cash surrender value," as used in laws. Some of the district and circuit § 70a, embrace not only policies which, by courts held that it did so qualify § 6, while their terms, have such value, but also those others held that it did not, and that it was having it by the practice or concession of intended to mean that where a policy was the company issuing them; that the trustee exempt under state laws, the trustee had no in bankruptcy has no right whatsoever to a right to it whatsoever, the proviso being in- policy which has no cash surrender value tended as a benefit to the bankrupt, and to and no other value except that which rests apply only to policies which were not upon contingency at the time of bankruptcy; exempt. The latter view is the one taken that where the policy has only a cash surby the United States Supreme Court in render value at the time of the filing of the Holden v. Stratton, supra, which, in reach- petition, the trustee can claim no more than ing its conclusion, said among other things: such cash surrender value, although the en"As § 70a deals only with property which, tire proceeds become available before the not being exempt, passes to the trustee, the adjudication; and that where a policy is mission of the proviso was, in the interest exempt under state laws the trustee may of the perpetuation of policies of life insur-lay no claim to it or any part of it, although ance, to provide a rule by which, where such it may have a cash surrender value. The policies passed to the trustee because they cases which present the conflicting views were not exempt, if they had a surrender entertained as to these matters before they value, their future operation could be pre- were determined by the United States Suserved by vesting the bankrupt with the preme Court are to be found in the notes to privilege of paying such surrender value, Morris v. Dodd, 50 L.R.A. 33; Re White, 26 whereby the policy would be withdrawn out L.R.A. (N.S) 451; Re O'Rear, 30 L.R.A. of the category of an asset of the estate. (N.S. 990; and Re Andrews, 41 L.R.A. That is to say, the purpose of the proviso is (N.S.) 123. to confer a benefit upon the insured bank

A. 206, 18 Am. Bankr. Rep. 198, 157 Fed. | 41; Barbour v. Connecticut Mut. L. Ins. Co. 544; Bump, Bankr. p. 368; Security Ware- 61 Conn. 240, 23 Atl. 154; Hoyt v. Godfrey, housing Co. v. Hand, 206 U. S. 425, 426, 51 | 88 N. Y. 669; Guy v. Craighead, 21 App. L. ed. 1123, 1124, 27 Sup. Ct. Rep. 720, 11 Div. 460, 47 N. Y. Supp. 576; Stacy v. DeAnn. Cas. 789; Knapp v. Milwaukee Trust shaw. 7 Hun, 449; Re Adams, 104 Fed. 72; Co. 216 U. S. 545, 557, 54 L. ed. 610, 614, Baldwin v. Rogers, 28 Minn. 549, 11 N. W. 30 Sup. Ct. Rep. 412; Stern v. Louisville 77; Blake v. Boisjoli, 51 Minn. 296, 53 N. frust Co. 7 Am. Bankr. Rep. 305, 50 C. C. W. 637; Johnson v. Riley, 41 W. Va. 140, A. 367, 112 Fed. 501; Re Orear, 30 L.R.A. 23 S. W. 698; Mittelburg v. Harrison, 11 (N.S.) 990, 102 C. C. A. 78, 24 Am. Bankr. Mo. App. 136, 90 Mo. 444, 3 S. W. 203; Rep. 343, 178 Fed. 632; Re Davidson, 24 Am. French v. Holmes, 67 Me. 186; Jones v. Bankr. Rep. 460, 179 Fed. 750; Holden v. Brandt, 59 Iowa, 332, 10 N. W. 854, 13 N. Stratton, 198 U. S. 214, 49 L. ed. 1023, 25 | W. 310; Williams v. Robbins, 15 Gray,, 590; Sup. Ct. Rep. 656; Partridge v. Andrews, Credle v. Carrawan, 64 N. C. 422; Rice v. 41 L.R.A. (N.S.) 123, 112 C. C. A. 69, 27 Perry, 61 Me. 145; Bump, Fraud. Conv. 2d Am. Bankr. Rep. 388, 191 Fed. 325. ed. 19.

All of the considerations of policy upon which § 70a is held to be based are absent in case of an assignment of the policies.

Holden v. Stratton, 198 U. S. 214, 49 L. ed. 1023, 25 Sup. Ct. Rep. 656; Hiscock v. Mertens, 205 U. S. 202, 51 L. ed. 771, 27 Sup. Ct. Rep. 488.

The effect of the enforcement of the transfer in question is to enable defendant Crouse to obtain a greater percentage of his debt than other creditors of the same class.

Wilson Bros. v. Nelson, 7 Am. Bankr. Rep. 142, 183 U. S. 191, 46 L. ed. 147, 22 Sup. Ct. Rep. 74.

When defendant elected to proceed against Ryan and the firm of T. A. McIntyre & Company on his notes, he effectually barred himself from enforcing any collateral he had to secure a return of the stocks upon which he had borrowed the money to loan on the notes.

Thomas v. Sugerman, 15 L.R.A. (N.S.) 1267, 85 C. C. A. 337, 19 Am. Bankr. Rep. 509, 157 Fed. 669; Droege v. Ahrens & O. Mfg. Co. 163 N. Y. 466, 57 N. E. 747; Le Marchant v. Moore, 150 N. Y. 209, 44 N. E. 770; Moller v. Tuska, 87 N. Y. 166; Deitz v. Field, 10 App. Div. 425, 41 N. Y. Supp. 1087.

Mr. Winfred T. Denison also argued the cause and filed a brief for appellants: Messrs. Levi S. Chapman and Harry E. Newell argued the cause, and, with Mr. James E. Newell, filed a brief for appellee:

To constitute a preference, actual value must have passed from the bankrupt to the creditor in some form.

National Bank v. National Herkimer County Bank, 225 U. S. 178, 56 L. ed. 1042, 32 Sup. Ct. Rep. 633; Re Steam Vehicle Co. 121 Fed. 939; McDonald v. Clearwater Shortline R. Co. 164 Fed. 1007; Stewart v. Platt, 101 U. S. 731, 25 L. ed. 816; Cook v. Tullis, 18 Wall. 332, 21 L. ed. 933; Mutual L. Ins. Co. v. Farmers' & M. Nat. Bank, 173 Fed. 390; Central Nat. Bank v. Hume, 128 U. S. 195, 204, 32 L. ed. 370, 9 Sup. Ct. Rep.'

The policies in suit at the time of petition filed, having no actual cash surrender value, and no value of any kind which could be realized by the bankrupt or the trustees, were merely executory contracts, and were not property or a property right which the trustees in bankruptcy were entitled to take.

Warnock v. Davis, 104 U. S. 775, 26 L. ed. 924; Re McKinney, 15 Fed. 535; Central Nat. Bank v. Hume, 128 U. S. 195, 32 L. ed. 370, 9 Sup. Ct. Rep. 41; Re Coleman, 69 C. C. A. 496, 136 Fed. 818; Re Newland, 6 Ben. 342, Fed. Cas. No. 10,170, 7 Nat. Bankr. Reg. 477; Leonard v. Clinton, 26 Hun, 288; Barbour v. Larue, 106 Ky. 546, 51 S. W. 5; Holt v. Everall, 34 L. T. N. S. 599, 45 L. J. Ch. N. S. 433, L. K. 2 Ch. Div. 266, 24 Week. Rep. 471; Re Buelow, 98 Fed. 86; Re Josephson, 121 Fed. 142, 59 C. C. A. 650, 124 Fed. 734; Morris v. Dodd, 110 Ga. 606, 50 L.R.A. 33, 78 Am. St. Rep. 129, 36 S. E. 83; Re Steele, 98 Fed. 78; Re Lange, 91 Fed. 361; Etna Nat. Bank v. United States L. Ins. Co. 24 Fed. 770; Gould v. New York L. Ins. Co. 132 Fed. 927; Re Judson, 113 C. C. A. 158, 192 Fed. 834; Re Slingluff, 106 Fed. 154; Collier, Bankr. 7th ed. 1909, p. 822; People v. Security L. Ins. & Annuity Co. 78 N. Y. 114, 34 Am. Rep. 522.

The policies in question are within the proviso of § 70a, subd. 5, of the bankruptcy law.

A transfer by an insolvent of exempt property is valid as to creditors, even though the transfer be voluntary. A debtor may keep or sell his exempt property, as he sees

fit.

Baldwin v. Rogers, 28 Minn. 544, 11 N. W. 77; Buckley v. Wheeler, 52 Mich. 1, 17 N. W. 216; Kramer v. Wood, Tenn. —, 52 S. W. 1113; Smyth v. Hall, 126 Iowa, 627, 102 N.

W. 520.

-

The bankrupt's right under § 70 to retain any insurance policy held by him by paying or securing to the trustee the cash surrender value thereof after the same has been stated

by the company to the trustee is an assign- the trustees qualified, was $15,370, or the able right.

amount of the loan of the Equitable Society Van Kirk v. Vermont Slate Co. 140 Fed. upon the policies. It is therefore apparent 38; Re Judson, 192 Fed. 834; Morris v. that on the day when the petition was filed, Dodd, 110 Ga. 606, 50 L.R.A. 33, 78 Am. St. as well as the day of the adjudication in Rep. 129, 36 S. W. 83; Re Wolff, 165 Fed.bankruptcy, the cash surrender value would 984.

not have exceeded the loan and lien of the Society upon the policies. The circuit court

Mr. Justice Day delivered the opinion of appeals for the second circuit held that, of the court:

The action was brought in the United States district court for the southern district of New York by the trustees of the firm of T. A. McIntyre & Company, and of the individual members of that firm, bankrupts, against Charles M. Crouse and the Equitable Life Assurance Society of the United States, to recover the sum of $90,698.32, the net proceeds of certain policies of insurance issued by the Equitable Life Assurance Society upon the life of Thomas A. McIntyre, one of the bankrupts, deceased. The proceeds of the policies were paid into court by the Society. The judgment of the district court in favor of Crouse was affirmed by the circuit court of appeals (104 C. C. A. 227, 181 Fed. 479), and the case has been appealed to this court.

under the circumstances, the policies did not pass to the trustees as assets, and therefore the action which had been begun to set aside the transfer to Crouse, as a preference within the bankruptcy act, could not be maintained.

The correctness of this decision depends primarily upon the construction of § 70a of the bankruptcy act, which reads:

"The trustee of the estate of a bank-[467 rupt, 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 trademarks; (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; and (6) rights of action arising upon contracts or from the unlaw

It appears that on the 10th of April, 1902, Thomas A. McIntyre obtained two policies of life insurance in the Equitable Society. They were known as "guaranteed cash-value, limited payment, life policies," each providing that upon the death of the insured the company would pay to his execu tors, administrators, or assigns the sum of 466]$100,000 in fifty annual instalments, or the sum of $53,000 in cash, a total of $106,000 for the two policies. On April 14, 1906, the policies were assigned absolutely to the firm of T. A. McIntyre & Company, and on April 24, 1907, they were by that firm assigned to the Equitable Society as collateral security for a loan of $15,370. On February 25, 1908, two months prior to the filing of the petition in bankruptcy, the policies were assigned by McIntyre & Com pany to the defendant, Charles M. Crouse. subject, however, to the prior assignment to the Equitable Society. A petition in in voluntary bankruptcy was filed against McIntyre & Company and its individual members on April 25, 1908, and on May 9, 1908, the defendant Crouse paid the premiums on the policies, in the sum of $6,078.38. Mc-ful taking or detention of, or injury to, his Intyre & Company and the individual members thereof were adjudged involuntary bankrupts on May 21, 1908, and the trus tees were elected on the 24th of July, 1908. On the 29th of July, 1908, Thomas A. Mc Intyre died, and the policies became pay able.

It appears that the policies had a cash surrender value, which, at the time when

property." [30 Stat. at L. 565, chap. 541, U. S. Comp. Stat. Supp. 1911, p. 1511.]

The part of the section particularly to be considered is subdiv. 5 and its proviso. Subdivision 5 undertakes to vest in the trustee property which, prior to the filing of the petition, the bankrupt could by any means have transferred, or which might have been levied upon or sold under judicial