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ter and amount of property which shall be table to do so. The wide departure from exempt from execution is "purely a ques- the legislation of many of the other states, tion of legislative policy." Spence v. Smith, shown by the unrestricted terms of the 121 Cal. 536, 66 Am. St. Rep. 62, 53 Pac. Washington statute, instead of manifesting 653. And it is further to be observed that the intention of the legislature of that state the legislature of California has acted un- to narrow the exemption to conform to the der that assumption, and has in effect ex- statutes of other states, on the contrary, empted life insurance policies from execu- conclusively shows the intention of the tion. Thus it is provided in the Civil Code Washington legislature to adopt a broader of California as follows:
and more comprehensive exemption. And “Sec. 3470. Property exempt.—Property light upon the intention to give a broad and exempt from execution, and insurances upon popular meaning to the term “life insurthe life of the assignor, do not pass to the ance” is shown by the amendment exemptassignee by a general assignment for the ing the avails of accident policies, which benefit of creditors, unless the instrument ordinarily, in the event death does not respecially mentions them, and declares an sult, is payable to the insured. And it may intention that they should pass thereby. also be observed in this connection that the En. March 21, 1872."
policies considered by the supreme court of Conceding the constitutionality of the Washington in Re Heilbron, 14 Wash. 536, statute, it is next insisted that it does not 35 L. R. A. 602, 45 Pac. 153, were payable embrace an exemption of the avails of the on the death of the insured to his executors, policies in question. The arguments sup- and no intimation was given in the opinion porting this contention are somewhat in that policies of that character were not volved, but are all embraced in the follow- within the terms of the exempting stating propositions: First, life insurance, it ute. is said, in its strictest and technical sense, The policies, then, being exempt by the relates only to a fund realizable by death, state law, we are brought to consider the and therefore the words "all life insurance," question whether they were exempt under in the Washington statute, must be given the bankrupt act of 1898. that restricted meaning; hence the statute As we have said, § 6 of the act adopts, is inapplicable to one of the policies which for the purposes of the bankruptcy proceedpartakes of the nature of an endowment. ings, the exemptions allowed by the laws of Second, exemptions of life insurance poli- the several states. The language so providcies, it is asserted, do not generally protect ing is as follows: the avails of insurance from pursuit by “Sec. 6. Exemptions of Bankrupts.-a creditors of the insured where the proceeds This act shall not affect the allowance to of the policies are payable to his estate, nor bankrupts of the exemptions which are predo they protect the avails of insurance from scribed by the state laws in force at the pursuit by the creditors of the wife of the time of the filing of the petition in the insured, or other beneficiary. The applica- state wherein they have had their domicil tion of these propositions is based upon the for the six months or the greater portion fact that in both of the policies the wife- thereof immediately preceding the filing of one of the bankrupts—was named as a bene- the petition.” ficiary in the event of surviving her hus- It is beyond controversy that, if the secband, and in one of the policies the husband tion just quoted stood alone, the policies in was entitled, if he survived the twenty- question would be exempt under the bankyears' period, to surrender the policy, and rupt act. The contention that they are not receive its cash value.
arises from what is assumed to be a limitaTo support the propositions the law of tion imposed upon the terms of § 6 by a many states, limiting the exemption of the proviso found in $ 70a of the act. We quote proceeds of life insurance policies to the that section in full, italicizing the provicases specified, are referred to, and the ar. sion which it is deemed operates to take the gument is that, because in such states there proceeds or avails of policies of insurance are such statutes, a similar limitation out of the control of $ 6: should be read, by construction, into the “The trustee of the estate of a bankrupt, Washington statute. But the error in the upon his appointment and qualification, and argument is manifest. It is not to be doubt- his successor or successors, if he shall have ed that the broad terms of the statute, as one or more, upon his or their appointment ordinarily understood, embrace both of the and qualification, shall in turn be vested, by policies, and it would not be construction, operation of law, with the title of the bankbut legislation, to restrict the meaning of rupt, as of the date he was adjudged a bankthe statute in accord with narrower legis- rupt, except in so far as it is to property lation in other states, because, in the judg- which is exempt, to all (1) documents rement of a court, it might be deemed equi- 'lating to his property; (2) interest in pat
ents, patent rights, copyrights, and trade- enumerations. The meaning now sought to marks; (3) powers which he might have be given to the proviso cannot in reason exercised for his own benefit, but not those be affixed to it without holding that the which he might have exercised for some words "except in so far as it is to property other person; (4) property transferred by which is exempt," do not control and limit him in fraud of his creditors; (5) property the proviso. But to say this is to read out which, prior to the filing of the petition, he of the section the dominant limitation which could by any means have transferred, or it contains, and, therefore, to segregate the which might have been levied upon and sold proviso from its context, and cause it to under judicial process against him: pro- mean exactly the reverse of what, when read vided, that when any bankrupt shall have in connection with the context, it necessaany insurance policy which has a cash sur- rily implies. render value payable to himself, his estate, It is, however, argued that unless the proor personal representatives, he may, with viso be given the import attributed to it, in thirty days after the cash surrender value and be treated as not subject to the limihas been ascertained and stated to the trus- tation implied by the words creating the tee by the company issuing the same, pay exception as to exempt property, that it or secure to the trustee the sum so ascer- becomes meaningless; and hence, under the tained and stated, and continue to hold, own, rule of construction which commands that and carry such policy free from the claims effect must be given, if possible, to all parts of the creditors participating in the dis- of a statute, the proviso must be construed tribution of his estate under the bankruptcy as wholly disconnected from the clause as proceedings; otherwise the policy shall pass to exempt property. The premise upon to the trustee as assets; and (6) rights of which this proposition rests is a mistaken action arising upon contracts or from the one. As § 70a deals only with property unlawful taking or detention of, or injury which, not being exempt, passes to the trusto, his property."
tee, the mission of the proviso was, in the Conflicting views as to the operation upon interest of the perpetuation of policies § 6 of the proviso in $ 70a referred to have of life insurance, to provide a rule by which, been expounded by the circuit courts of ap- where such policies passed to the trustee peal. Two of the leading cases are Steele because they were not exempt, if they had a v. Buel, 44 C. C. A. 287, 104 Fed. 968, hold- surrender value their future operation could ing that the proviso does not qualify the ex- be preserved by vesting the bankrupt with emptions accorded by § 6, and the other, a the privilege of paying such surrender value, decision by the court of appeals of the whereby the policy would be withdrawn out ninth circuit, in Re Scheld, 52 L. R. A. 188, of the category of an asset of the estate. 44 C. C. A. 233, 104 Fed. 870, holding that That is to say, the purpose of the proviso the effect of the proviso was to limit, as to was to confer a benefit upon the insured policies of insurance, the broad terms of s bankrupt by limiting the character of the 6, adopting the state exemption laws. interest in a nonexempt life insurance pol
Considering the matter originally, it is, icy which should pass to the trustee, and we think, apparent that § 6 is couched in not to cause such a policy when exempt to unlimited terms, and is accompanied with no become an asset of the estate. When the qualification whatever. Even a superficial purpose of the proviso is thus ascertained analysis of § 70a demonstrates that that it becomes apparent that to maintain the section deals not with exemptions, but solely construction which the argument seeks to with the nature and character of property, affix to the proviso would cause it to prothe title to which passes to the trustee in duce a result diametrically opposed to its bankruptcy. The opening clause of the sec-spirit and to the purpose it was intended tion declares that the trustee, after his ap- to subserve. pointment, shall be vested "by operation of And the meaning which we deduce from law with the title of the bankrupt,
the text and context of the proviso is greatexcept in so far as it is to property which ly fortified by obvious considerations of pubis exempt,” and this is followed by an enu- lic policy. It has always been the policy of meration, under six headings, of the va-Congress, both in general legislation and in rious classes of property which pass to the bankrupt acts, to recognize and give effect trustee. Clearly, the words “except in so to the state exemption laws. This was cofar as it is to property which is exempt,” gently pointed out by Circuit Judge Caldmake manifest that it was the intention to well, in delivering the opinion in Steele v. exclude from the enumeration property ex-Buel, where he said (44 C. C. A. 287, 104 empt by the act. This qualification neces- Fed. 972): sarily controls all the enumerations, and, "From the organization of the Federal therefore, excludes exempt property from all courts under the judiciary act of 1789, the the provisions contained in the respective law has been that creditors suing in these
courts could not subject to execution prop
shall be given by any regulation of commerce erty of their debtor exempt to him by the or revenue to the ports of one state over those law of the state. Judiciary Act of 1789 2. No discrimination in state pilotage laws for
of another. (1 Stat. at L. 93, chap. 21); Wayman v.
bidden by U. S. Rev. Stat. § 4237, U. S. Comp. Southard, 10 Wheat. l, 32, 6 L. ed. 253,
Stat. 1901, p. 2903, is made by the Virginia 260; Lamaster v. Keeler, 123 U. S. 376, 31 compulsory pilotage charge on all vessels L. ed. 238, 8 Sup. Ct. Rep. 197; Dartmouth (except coasting vessels having a pilot's llSav. Bank v. Bates, 44 Fed. 546.
cense), either inward bound from the sea The same rule has obtained under the bank
through the Virginia capes to Smith's Point,
Yorktown, Newport News, or Norfolk and inrupt acts, which have sometimes increased
termediate points, or outward bound to the the exemptions, notably so under the act of sea from those points through the capes, al. 1867 ($ 5045, Rev. Stat.) but have never though compuisory pilotage does not prevail lessened or diminished them. An intention
in all the inland waters of the state. on the part of Congress to violate or abolish this wise and uniform rule, observed from
[No. 159.] the creation of our Federal system, should be made to appear by clear and unmistaka Argued arch 3, 1905. Decided May 15, ble language. It will not be presumed from
1905. a doubtful or ambiguous provision fairly susceptible of any other construction.” N ERROR toʻthe Supreme Court of Ap
There has been some contrariety of opin- peals of the State of Virginia to review ion expressed by the lower Federal courts as the denial of a writ of error to the Court to the exact meaning of the words "cash of Law and Chancery of the City of Norsurrender value” as employed in the pro-folk, in that state, which had entered judg. viso, some courts holding that it means a ment on a verdict in favor of plaintiff in an surrender value expressly stipulated by the action to recover a compulsory
a compulsory pilotage contract of insurance to be paid, and other charge imposed by the laws of that state. courts holding that the words embrace poli- Judgment of lower court affirmed. cies even though a stipulation in respect to See same case below on first writ of error, surrender value is not contained therein, 101 Va. 635, 44 S. E. 755. where the policy possesses a cash value The facts are stated in the opinion. which would be recognized and paid by the Mr. Robert M. Hughes for plaintiff in insurer on the surrender of the policy. It is error. to be observed that this latter construction Messrs. D. Tucker Brooke, John W. harmonizes with the practice under the Daniel, R. C. Marshall, and Fred Harper bankrupt act of 1867 (Re Newland, 6 Ben. for defendant in error. 342, Fed. Cas. No. 10,170; Re McKinney, 15 Fed. 535), and tends to elucidate and Mr. Justice White delivered the opinion carry out the purpose contemplated by the of the court: proviso as we have construed it. However, The law of the state of Virginia imposes whatever influence that construction may compulsory pilotage on all vessels inward have, as the question is not necessarily here bound from sea through the Virginia capes, involved, we do not expressly decide it. other than coasting vessels having a pilot's
The judgment of the Circuit Court of Ap-license, no matter to what port or point the peals is reversed, and that of the District vessel may be bound, and likewise imposes Court affirmed; cause remanded to the lat- compulsory pilotage on all vessels outwardter court.
bound through the capes. The compulsory
pilotage inward bound from the sea extends Mr. Justice McKenna tõok no part in no further than to Newport News, Smith's the decision of this cause.
Point, Yorktown, or Norfolk, and the compulsory pilotage outward bound through the
capes commences at said points respectively. (198 U. S. 310)
In the inland waters of Virginia, above the ABRAM P. THOMPSON, Plff. in Err.,
points named, compulsory pilotage does not
prevail, but pilotage is regulated and rates JOSEPH J. DARDEN.
therefor are provided, the duty being im
posed, except where the statutes otherwise Compulsory pilotage-validity-discrimina- provide, of using only a licensed Virginia tion.
pilot if the services of a pilot are taken.
Virginia Code of 1887, $$ 1963, 1965, 1966, 1. The adoption of compulsory pilotage regu- 1978, and 1900. Reference is made in the
lations by a state, under the authority of U. brief of counsel for the defendant in error S. Rev. Stat. § 4235, U. S. Comp. Stat. 1901, p. 2903, does not violate U. S. Const. art. 1, to Virginia colonial legislation (1775) im§ 9, cl. 6, which provides that no preference posing compulsory pilotage on vessels in
ward bound from sea through the capes ac- | states to adopt pilotage regulations, despite companied with the statement, which is un- the recognition of that authority by Conchallenged, that from that time to the pres-gress as early as 1789 (Rev. Stat. 4235, U. ent date there has been no period when S. Comp. Stat. 1901, p. 2903), and the recompulsory pilotage regulations of a like peated adjudications of this court recogniznature have not prevailed in Virginia. The ing and upholding the practice on the subcontentions of the plaintiff in error arising ject which has obtained from the beginning. on this record assail the validity of the Olsen v. Smith, 195 U. S. 332, 25 Sup. Ct. pilotage laws now in force. The controversy Rep. 52, 49 L. ed. 224, and authorities there thus arose.
cited. In August, 1902, the schooner, William 2d. “The Virginia pilot law is in conflict Neely, engaged in the coastwise trade be with § 4237 of the United States Revised tween New England and Virginia, Abram P. Statutes (U. S. Comp. Stat. 1901, p. 2903). Thompson, master, when bound in from sea The section in question was quoted and conto Norfolk, was offered by Joseph J. Darden, mented on in Olsen v. Smith, 195 U. S. 332, & licensed Virginia pilot, his services, which 25 Sup. Ct. Rep. 52, 49 L. ed. 224, and avoids were declined. Thereupon Darden, the pilot, the provisions of all state regulations maksued Thompson, the master, in the court of ing "any discrimination in the rate of pilotlaw and chancery of Norfolk, for his pilot- age or half pilotage between vessels sailing age charge. Thompson demurred on the between the ports of one state and vessels ground that the Virginia statutes as to sailing between the ports of different states, , pilotage were void because repugnant to the or any discrimination against vessels proConstitution and laws of the United States, pelled in whole or in part by steam, or for various reasons, which were specified in against national vessels of the United the demurrer. The trial court sustained the States.” It cannot be said that the pilotage demurrer. Darden, taking the record to the charge for vessels bound in and out through court of appeals of Virginia, applied for a the capes is, in and of itself, discriminatory, writ of error, which was not a matter of since it imposes a like compulsory pilotage right. The court allowed the writ, heard the charge upon all vessels bound in and bound cause, and, for reasons expressed in a full out. Speaking of the requirements of the and careful opinion, reversed the judgment, statute, the supreme court of appeals of Virand remanded the cause for a new trial. ginia said in its opinion in this case: 101 Va. 635, 44 S. E. 755. At the new trial "By the provisions of the sections of the Thompson reiterated, by way of offers of code quoted all vessels (except coastwise evidence and other proceedings, the objec- vessels with a pilot license) inward bound tions which had been expressed in the de- from the sea to Smith's Point, Yorktown, murrer, and preserved his rights by excep- Newport News, or Norfolk, or any intertions taken to the action of the trial court, mediate point, and all such vessels outward which adjudged against him. He then car- bound to the sea from Smith's Point, Yorkried the record to the court of appeals and town, Newport News, or Norfolk, or any inapplied for a writ of error, which was re-termediate point, are subject to the comfused, and thereupon this writ was sued out. pulsory regulations and rates therein pro
In the argument at bar seven grounds of vided. All vessels are subject to the same error are stated, and in referring to them regulations, and under the same circumgenerally many minute suggestions are stances and conditions are required to pay made concerning the pilotage statutes, by the same fees.” way of indicating that discrimination arises The arguments made to support the asserfrom them. They mainly relate to the stat- tion that the pilot laws conflict with the act utes regulating pilotage in the internal wa- of Congress are twofold. First. As the state ters. Whilst we have given these sugges- of Virginia has no appreciable commerce tions our attention, we content ourselves from her own ports inward bound through with saying that we deem them to be devoid the capes, therefore there is discrimination. of merit. The more so because, in the writ- Second. As Virginia has chosen by her legten argument, the discussion is expressly islation not to subject commerce on her inlimited to the first, second, and fifth grounds ternal waters to a compulsory charge for of alleged error. These we proceed to con- pilotage, therefore there is a discrimination sider.
in favor of commerce on the internal waters 1st. “This statute violates article 1, § 9, of Virginia, and against commerce bound clause 6, of the Federal Constitution, which in and out through the capes from and to provides that no preference shall be given the sea. In other words, the proposition is by any regulation of commerce or revenue that the state of Virginia was without to the ports of one state over those of an power to make an undiscriminating regulaother.” In effect, this proposition denies the tion as to pilotage for ships bound in and power of Congress to permit the several' out through the capes, unless a like regula
tion was made applicable to all the internal customed places in common with the citizens waters within the state. This is attempted
of the territory" of Washington, and of
“erecting temporary buildings for curing to be sustained by contending that the navi
them," secured to the Yakima Indians by the gation of the internal waters of Virginia is
treaty of 1859, survives the private acquisimore tortuous than is the navigation in and tion of lands bordering on the Columbia river out of the capes, and other suggestions of a by grants from the United States or state of kindred nature.
Washington. But the unsoundness of the proposition is 2. Patents issued by the Land Department to made manifest from its mere statement. In
lands bordering on the Columbia river, though
absolute in form, can grant no exemption from effect, it but denies the power of Virginia to
the fishing rights secured to the Yakima Inregulate pilotage, and presupposes that dians by the treaty of 1859. courts are vested with authority to avoid 3. Fishing rights in the Columbia river, secured the pilotage regulations adopted by the
to the Yakima Indians by the treaty of 1859, states, which do not discriminate as to com
which provided for the extinguishment of
the Indian title to the lands occupied and merce to which they apply, simply because
claimed by them, preparatory to opening the it is deemed they are unwise or unjust. As lands for settlement, are not subordinate to pointed out in Olsen v. Smith, an objection the powers acquired by the state of Washbased on the assumed injustice of a pilotage
ington in and over the shore lands on its ad.
mission into the Union. regulation does not involve the power to make the regulation. Objections of this character, therefore, if they be meritorious,
[No. 180.] but concern the power of Congress to exercise the ultimate authority vested in it on Argued April 3, 4, 1905. Decided May 15, the subject of pilotage.
1905. 3d. "The pilot law violates § 4236 of the Revised Statutes (U. S. Comp. Stat. 1901, APPEAL from the Circuit Court of the
United p. 2903), which provides: "The master of any vessel coming into or going out of any ington to review a decree dismissing a bill any vessel coming into or going out of any to enjoin any obstruction of the fishing port situate upon waters which are the boundary between two states, may employ rights in the Columbia river, secured to the any pilot duly licensed or authorized by the Yakima Indians by the treaty of 1859. law of either of the states bounded on such Reversed and remanded for further proceedwaters to pilot the vessel to or from such
ings. port.'” It is said that whilst it may be
The facts are stated in the opinion. difficult to say that the waters of the Chesa
Solicitor General Hoyt for appellants.
Messrs. Charles H. Carey, F. P. Mays, peake bay between the capes constitute a boundary, still it is possible to so conclude. and Huntington & Wilson for appellees. We observe concerning this contention that it does not appear to have been raised in
Mr. Justice McKenna delivered the opinthe courts below. It is accompanied with no ion of the court: suggestion that the state of Maryland has This suit was brought to enjoin the reever attempted to regulate pilotage between spondents from obstructing certain Indians the capes of Virginia, to which the Virginia of the Yakima Nation, in the state of Washstatute relates, or that any Maryland pilot ington, from exercising fishing rights and offered his services. The proposition, there- privileges on the Columbia river, in that fore, rests upon a series of mere conjectures, state, claimed under the provisions of the which we cannot be called upon to investi- treaty between the United States and the gate or decide.
Indians, made in 1859. Judgment affirmed.
There is no substantial dispute of facts, or none that is important to our inquiry.
The treaty is as follows: (198 U. S. 371)
“Article 1. The aforesaid confederated UNITED STATES, Thomas Simpson, and tribes and bands of Indians hereby cede, reWhite Swan, Appts.,
linquish, and convey to the United States
all their right, title, and interest in and to LINEAS WINANS and Audubon Winans, the lands and country occupied and claimed
Partners, Doing Business under the Firm by them.
"Article 2. There is, however, reserved
from the lands above ceded, for the use and Indians - fishing rights under treaty - occupation of the aforesaid confederated
rights of riparian owners power of tribes and bands of Indians, the tract of state over shore lands.
land included within the following bound
aries: 1. The right of taking fish "at all usual and ac
“All of which tract shall be set apart,