The opinion of the court was delivered by: MADDEN
This is a review of an order of the Referee in Bankruptcy disposing of insurance funds upon a wrecked helicopter, belonging to the Bankrupt. The facts are as follows:
On October 18, 1947, the Helicopter Air Transport, Inc. filed a petition for reorganization under Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq. A suitable plan was not presented and the corporation was declared a bankrupt on February 6, 1948.
During its business life the Bankrupt was the owner of several helicopters, two of which are involved in this litigation.
On September 13, 1946, the Bankrupt obtained a loan of $ 32,000 from the American National Bank and Trust Company of Chicago (hereinafter called American) and as security gave a chattel mortgage upon a Sikorsky helicopter, license No. NC92804, owned by it.
At or about the time of this loan the Northern Assurance Company, Ltd., issued an all risk insurance policy in the sum of $ 48,000 upon this helicopter with the Bankrupt as the assured. This policy contained a provision as follows: 'The insured is the sole and unconditional owner of the aircraft except mortgage held by the American National Bank and Trust Company of Chicago. Any loss hereunder is payable as interest may appear to the insured and the American National Bank and Trust Company of Chicago whose address is 33 North LaSalle Street, Chicago 90, Illinois.'
The chattel mortgage was recorded with the Department of Commerce, Civil Aeronautics Administration on November 1, 1946 as document No. 254434 and was subsequently recorded as a chattel mortgage in the Register of Deeds Office for Camden County, New Jersey, on May 21, 1947.
On or about December 28, 1946, the Bankrupt obtained another loan of $ 16,667 from American, and as security for this loan, gave a chattel mortgage upon a Bell helicopter which the Bankrupt also owned.
On December 30, 1946, A. R. F. Investment Company, a partnership, the petitioner on review (hereinafter called A. R. F.), guaranteed to American the payment of the December 28, 1946 note by the Bankrupt. This note was subsequently renewed and upon default by the Bankrupt, A. R. F. paid this note and took assignments of the note and the mortgage given upon the Bell helicopter to secure it. This debt amounted to $ 13,667.
Prior to such default, however, and likewise prior to the filing of the plan of reorganization, the Sikorsky helicopter had, on September 21, 1947, crashed and was demolished.
At the time of the crash, the Bankrupt owed to American the sum of $ 26,000 on the note secured by the Sikorsky, and in addition, owed insurance premiums to its insurance carriers, and the insurance company refused to pay the claim on the Sikorsky policy until the payment of the overdue premiums.
This dispute arises over the check issued by the insurance company upon the Sikorsky claim in the amount of $ 44,340.
American claims $ 26,000 being the balance due upon the Sikorsky note and mortgage, and bases its claim upon the validity thereof and also upon the insurance contract to which it was made a party by the provisions to which I have hereinbefore referred.
Pennsylvania Co. claims $ 12,000 being the balance due on its note of October 9, 1947, and bases its claim upon the theory that while the loan was within four months of the filing of the petition of reorganization, nevertheless, it was upon a present consideration for a valid purpose to ...