*1 LINES v. FREDERICK et al.
No. 412. Decided November Per Curiam.
This casé presents the question of whether a bankrupt wage earner's vacation pay, accrued but unpaid at the time of the filing of his petition, passes to the trustee in bankruptcy as. under § (5) 70a Bankruptcy Act, 30 as amended, 11 U. S. C. § 110 (a) (5). The facts are not in dispute. Respondent Frederick, employed by a large manufacturing company, had accrued vacation pay of $137.28 at the time he filed his petition. He could collect this sum either dur- ing the annual period when his employer shut down the plant in which he worked, or on final termination of employment. Respondent Harris had accrued vaca- tion pay of $144.14, which he could draw either on termi- nation or under a conventional voluntary vacation plan of his employer. In each case, the referee in bankruptcy made a “turnover order” requiring the bankrupt to pay to the trustee on receipt all of his accrued vacation pay, less one-half of that part accrued during the 30 days prior to the filing of (the deducted sum being exempt under Cal. Code Civ. Proc. § 690.11 (Supp. 1970)).
The District Court affirmed the referee in both cases, but the Court of Appeals for the Ninth Circuit reversed, holding that accrued but unpaid vacation pay is not “property” under the statute, and therefore finding it meets accrued decide whether unnecessary to “transfer- being statutory requirement further *2 decision noted, its Appeals the Court As able.” n squarely Appeals the Court that of conflict in Berlin, 2d Kolb v. 356 F. in Fifth Circuit for the that 379, we said Segal 382 U. S. In for creditors secure (5) is to 70a§ thrust of main “[t]he alien- in may possess bankrupt the of value everything To .petition. he files when form or leviable able construed most been ‘property’ term end the be- its reach outside is not an interest and generously enjoyment because or contingent or novel cause it “ that out pointed ‘[i]t we But postponed.” must be word to the any definition categorical give to impossible it in certain relations attach to can we “property,” ” to it others.’ be attached which would limitations the limiting consideration important most in the lies the definition breadth the debtor Act to Bankruptcy give of the purpose basic for future clear field in life and a a “new discourage- by unhampered effort, provisions debt. The various ment of preexisting light adopted in bankruptcy act were reasonably possible when to be construed view are n general as to effectuate harmony with it so Local Loan act.” of the policy purpose omitted). (citations 244-245 292 U. S. Rochelle, supra, Segal question was whether In losses of business arising refunds out loss-carryback tax until not collected immediately prior year property were the calendar the end of as case, In that favor turnover trustee. purposes problem classification one, in this by simply not be resolved Act Bankruptcy could payment to the when right the time reference to from other property definitions “vested,” to drawn areas of the law. The Court looked to the purposes the Act and concluded that the tax refund claim was “sufficiently rooted in the pre-bankruptcy past and so little entangled with the bankrupt’s ability- to make an unencumbered fresh start it should be regarded as- ‘property’ under (5).” 38Q, § 70a S., 382 U.
Applied to the set of facts before us prin- here, ciples reflected in the earlier compel cases a fdr decision the bankrupt. Segal, a had business ceased operate and the tásk of the trustees in bankruptcy was to marshal whatever assets were left for distribution to the credi- tors. The tax refund claim, arising out of operations of the business and specifically out of the losses that had precipitated its failure, was an By con- asset. trast, the respondents here are wage earners whose sole *3 source of income, before and after bankruptcy, is their weekly earnings. The function of their accrued vaca- pay tion support is to the basic requirements of life for them their families during brief vacation periods or in the event of layoff. part Since it' is a of wagés, pay vacation is specialized “a type of property pre- senting problems distinct -system.” our economic Sniadach v. Family Finance Corp., 395 U. S. 340. Where the requirements minimal for the economic sur- vival debtor are at stake, legislatures have recog- nized protection that might be unnecessary unwise for other kinds of property may be required. g., e. See, the Consumer Credit Protection Act, 301, § 163. 15 U. C. (1964 § S. ed., Y). Supp.
The wage-earning bankrupt who must take a vacation pay without or forgo a vacation altogether cannot be said to have achieved “new in life and clear [the] future effort, field.for unhampered by the pressure and discouragement of preexisting debt,” Local Loan Hunt, supra, which it was the purpose of to, provide. statute proceed respondent forma motion The Fred- respondent motion The granted. is pauperis opposition his brief printing dispense erick to granted is certiorari petition The granted. is affirmed. is judgment opinion is of the Justice The Chief denied. be should certiorari for writ Hablan, dissenting.- Justice Mr. n in which instance another case my view led the Court docket overcrowded anof deserving if which, an issue summarily with to deal treatment. full-dress all, deserving our attention Insurance Savings-Share Maryland States United Cf. ante, p. Chicago, States ante, p. 4; United Corp., despite of the case disposes Court Moreover, uncertainty with and the record opaqueness law. California relevant regard employ- the terms Under day’s vaca- with one him credited employer ment, September From work.1 month’s for each 15/ tion beginning to December bankruptcy, Fred- “vacation,” Mr. the enforced the shutdown over three little entitled became presumably erick ato have accrued would amount same days’ pay. *4 no on work starting person fresh unencumbered “an paradigm assets, debts or Mr. Fred- only permitted not Indeed, the start.” to the extent start, head him a start; gave it erick a fresh opinions below reveal stipulated facts neither While the uncon I as true pay, take of vacation of accrual the rate review petition for in Mr. representation tested referee’s order.
of half a day’s pay.2 Segal
Since the question tendered for review is close and has split the courts of I appeals, would set the case for argument. 2The case similar, it complicated
by the fact that he could have chosen forgo his vacation. As he observed in to review turnover order, the record is silent on whether such a choice would wiped have out his accrued vacation time and nothing left for him to turn over.