In Re Driscoll

The problem in this case is simple and revolves around the social policy of statutes of exemption from execution and the perpetual eagerness of creditors to whittle away from the immunities created by such exemption laws.

The bankrupt has been ordered to pay to the Trustee amounts equal to loans he had negotiated and repaid Insurance Companies upon the security of life insurance policies which had loan values which, with all other life insurance of the bankrupt, required payment of premiums totaling less than $500 per year.

Long before bankruptcy, the bankrupt had purchased three life insurance policies upon his life. The total annual premiums were $389.50. The surrender values of the policies do not appear in the record, but one with Massachusetts Mutual Life Insurance Company had cash value of at least $1,208.80, and a New York Life Insurance Company policy is worth at least $433.93.

The bankrupt claimed that the policies are exempt and beyond reach of the Trustee. The Bankruptcy Act provides that the statutes which create exemption from execution in the state where the bankrupt resides determine the property a bankrupt may retain as exempt. California Code of Civil…