136 Ky. 310 | Ky. Ct. App. | 1910
Opinion op the Court by
— Affirming.
On August 11, 1905, the People’s Life & Accident Insurance Company was organized, and began writing insurance on the assessment* plan. It did not prosper, and in.a short time after its organization was placed in the hands of the Louisville Trust Company and one Megrew as receivers. Megrew died, and the Louisville Trust Company continued to act as receiver. During its existence, two death claims were presented against it, for $1,000 and $1,100 respectively; and in addition to these claims it owed debts amounting in the aggregate to a sum largely in excess of its total assets. All of its available assets were converted into cash and distributed among the creditors, and, after this had been done, there were remaining due and unpaid debts amounting to something like $8,000. After said company went into the hands of the receiver, its officers and directors ceased to take any interest in its business, and, in fact, abandoned it entirely to the receiver.
Among the assets which were alleged to belong to .the company was an open account in the Western National Bank, which claimed to owe the company a balance of $1.29. Hugh Ellis, a creditor of the insolvent insurance company, insisted that this showing on the part of the bank did not represent the true
The chancellor held that the claim set up andt asserted by the plaintiff Ellis was one which should properly have been asserted by the receiver, and the
The evidence in this case has taken quite a wide scope, but the real issue is a comparatively narrow one, being confined to the question as to whether or not the check upon which the bank undertook to withdraw $1,000 from the account of said insurance company was so drawn that it could properly be held to be the act of said insurance company.
It appears from the record that in order for the insurance company to receive the sanction of the insurance department to commence business, it was necessary that it have on hand a certain amount of cash, and, as the company did not have this necessary amount of money, an arrangement was made with the bank by J. V. Reed and Stuart E. Brannon, two of the promoters of said company, by which they executed their joint note to the bank for $1,000, the net proceeds of which was placed to the credit of the insurance company, and this sum, supplemented by the amount of the discount, made up the $1,000 which the president of the insurance company attempted to pay by the check out of which this litigation grows.
The by-laws of the insurance company provide that all checks on the deposit.of said company should be signed by the president and countersigned by one of two other designated officers. The bank was advised of the existence of this by-law, and, in fact, had entered into an agreement with the insurance company that the checks were to be honored only when so drawn, signed, and countersigned. Under this arrangement, 37 checks were drawn by the insurance company and honored by the bank. The check which is the subject of this' litigation was number 38, and it was signed by the president of the insurance com
The note in question was not the debt of the insurance company. It is true that certain of the promoters of said company had borrowed this money on their individual indorsements for the company to enable it to begin business, but the name of the insurance company did not appear upon the note which was executed to raise this money, for if it had it would have left the company in no better position than it was (toward complying with the requirements of the law) before the note was executed, for the law required that it have so much cash on hand' over and above any liability.
An attempt is made to show that an arrangement had been made between the president of the bank and the president of the insurance company whereby this fund, which had been so borrowed for the benefit of the insurance company, was to remain in the bank and not be checked out for any other purpose than the payment of the Reed note. If such an arrangement had been mad.e between the president of the bank and the president of the insurance company, it
On plaintiff’s cross-appeal, only the question of his costs is involved, for the judgment of the chancellor subjecting this $1,000 to the payment of the debts of the insurance company secured to him the full relief sought in his suit, and he is now complaining of the action of the chancellor in striking his name from the petition, upon the sole ground that it subjects him to the payment of costs, when the judgment shows that it was upon his initiative and through his efforts that the assigned estate had been benefited to the extent ofv this recovery; It is clear from the pleadings that the receiver was unwilling to proceed against the bank for this money,'and, had it not been for the plaintiff’s efforts, nothing on this account would have been recovered for the creditors. As a matter of equity and right, the plaintiff should have been given the judgment for his costs, either against the bank or the receiver.
A suit must be. brought in the name of the real party in interest. "Where the real party in interest refuses to proceed, we see no reason why those beneficially interested may not do so. The owner of this money was the insurance company. It had been
The question is simplified when viewed from another standpoint. Suppose that, when the plaintiff demanded of the receiver that he proceed against the bank for this $1,000, and the receiver had declined to do so, the plaintiff had petitioned the court to require the receiver to proceed against the bank for this money? Upon considering such application, either in the shape of a motion or by petition for mandamus, the chancellor would have directed the receiver to proceed, and would certainly not have dismissed the plaintiff with judgment for costs against him for having made the motion or instituted the suit. Strict equity would require, in such case, that any costs incurred be borne by the receiver, if not by the defendant bank, and in no event should the plaintiff, who was entirely in the right, be made to pay the costs. As practically all costs made by the plaintiff up to the time of his removal from the suit were only-such as would have been made by the receiver had he proceeded alone, the judgment in favor of the receiver for the costs of the suit satisfies all of the costs, except such as were made in an effort to have the suit dismissed as to the plaintiff, or his name stricken from the record as a party plaintiff, and as this cost was made by the defendant bank, or
Judgment affirmed on the original and cross-appeals.