111 Ky. 377 | Ky. Ct. App. | 1901
Opinion of the court by
Affirming.
It appears from the petition in this action that the appellant, James S. Bay, was appointed receiver of the ■Columbian Fire Insurance Company by the order of the Jefferson circuit court, common pleas division. It. is further alleged that the Columbian Fire Insurance Company was incorporated and organized for the purpose of conducting the business of fire insurance; that the company claimed to have organized, and by the terms, of the charter was required to organize, with a paid-up capital stock of $200,000, and a surplus of $50,000, and by law required io have said capital stock paid up in full before it commenced business, and was required to have said cash paid in before it was authorized to- conduct or carry on the business of fire insurance, but, as a matter, of fact, at the time of its alleged organization and commencement of business there was a large shortage in its capital stock; that, prior to its organization and commencement of business, it was necessary for said company to be examined by the insurance commissioner, who was a public officer charged by law with the duty of examining the condition of insurance companies, and making known to the public the true condition of the affairs of such companies, and of protecting the public against fraudulent organization and management of such companies, and to examine into the condition of the stock of such companies, the amount of cash paid in on account of such capital stock, and the amount on hand and belong
Paragraph 2: “The plaintiff further states: That after the organization of said insurance company as aforesaid,
Paragraph 3: “The plaintiff further states that by the laws of the State of Kentucky, under which the said Columbian Fire Insurance Company pretended to have organized, it was necessary for the said company, before it could begin or continue business, to obtain from the commis
Paragraph á: “The plaintiff further states that, in order that the Columbian Fire Insurance Company might obtain license to do business as an insurance company in the State of Kentucky, the defendant combined and conspired with the said Columbian Fire Insurance Company to fraudulently deceive the insurance commissioner of the State of Kentucky as to the amount of assets belonging to said insurance company on hand, and, so combining and conspiring, the defendant entered a fraudulent credit on its books in favor of said insurance company for the sum of $60,000, for the purpose of deceiving said insurance commissioner into the belief that said insurance company had on deposit at the defendant’s bank the said sum of $60,000, at the same time entering into a fraudulent conspiracy and agreement that the said insurance company was to have no right
Paragraph 5: “For further cause of action herein, plaintiff states that prior to the assignment of the Columbian Fire Insurance Company the defendant, the First National Bank, entered into a contract with the said fire insurance company whereby it was agreed that the said insurance company should deposit its cash with said defendant, and that in consideration of said deposit the defendant, the said First National Bank, agreed to pay the said insurance company for the use of the money so deposited interest at the rate of 3 per cent, per annum upon the average daily cash balance of said insurance company with said defendant bank; that after said assignment no change or modification in said contract as to the payment of interest was made, and the said bank remained the depository of the assignee of the said insurance company, the said assignee simply carrying on and continuing the contract for the payment of interest on the average daily cash balances as herein set forth; that from the 27th day of February, 1894, to June 21, 1896, the average daily cash balances of cash belonging to the estate of said' insurance company on deposit with the defendant, the First National Bank, under said contract, was the sum of $149,032.54; that interest on said sum at the rate of 3 per cent, per annum for said time amounts to the full sum of $6,245.59; that by reason of the premises the defendant, the First National Bank, became, was, and is justly indebted to the estate of the said insurance company in the full sum of $6,245.59, the payment of which this plaintiff has often demanded of the defendant, but the said defendant has hitherto failed and still fails so to pay, and the whole now remains due and unpaid. Wherefore this plaintiff prays judgment
Defendant moved the court to require the plaintiff to elect whether he would prosecute the alleged cause of action asserted in the first paragraph of the petition, to the exclusion of the alleged causes of action asserted in the second, third, fourth and fifth paragraphs, or whether he would prosecute the latter to the exclusion of the former. The court refused to compel plaintiff to elect between the first and fifth paragraphs of the petition, but required him to elect between the first, second, third and
“This day came James S. Ray, receiver herein, and, on his motion, permission is given him to bring and prosecute an action against the First National Bank of this city to recover such sums of money as, in his discretion, he may think said bank is chargeable with. This order is not a determination of the court that said bank is liable, or as to whether the right of action is in favor of the creditors, stockholders, or said receiver; all such questions being reserved for determination in the' particular suits themselves.”
Defendant thereupon demurred to the second paragraph of the petition because it does not state facts sufficient to constitute a cause of action against it, and on another day demurred on the further ground that the said paragraph of plaintiff’s petition is insufficient to constitute a cause of action .against it, because the act of Congress of June 3, 1861, under which it derived its charter, shows that the said matters complained of herein are in excess of its powers and ultra vires, which demurrer was on a subsequent day overruled. Afterwards appellant filed the following amended petition:
“By leave of court, the plaintiff amends the second paragraph of the petition, and makes the same more certain and definite, and for amendment states that heretofore,.
“He says that as a part of the plan and arrangement adopted and agreed on between the said insurance company and defendant to mislead and deceive the said' commissioner for the purpose aforesaid, it was agreed between them (and said agreement was carried out) that' the said insurance -company would temporarily leave with said bank .a note for $60,000 executed by James R. Skinner & Co. on the 23d day of September, 1893, and that the said insurance company should indorse and remain liable to defendant on said note, and that the said bank should at any time have the right to charge the amount of said note back to the insurance company, and on the 26th day of February, 1891, the defendant, without any right or authority to so do, did attempt to charge back said amount to said insurance company, and, pursuant to said original and secret arrangement, had said insurance company, or some of its officers, to issue to it a check for said amount, and on February 19, 1891, a check for $1,131.65, claimed to be interest on said transaction, was issued by said in
. By consent of parties, the demurrer filed and sustained to the second paragraph of the original petition shall be considered and taken as a demurrer to the amended petition this day filed.
On the 8th day of October, 1898, the circuit court adjudged that the plaintiff could not maintain this suit, for the reason, in substance, that the said fire insurance company, of which he is receiver, could not maintain the suit were it a going concern, and that it has not, and never had, any cause of action, admitting every allegation in the petition to be true, against the defendant. The money
Counsel devoted considerable attention to the question as to whether or not the petition stated a .cause of action. We are inclined, however, to the opinion that the petition states a cause of action, provided the appellant was entitled to prosecute the same. It is insisted for -appellant that he is but an arm or officer of the court, and that, under the direction of the court, he is authorized to prosecute this suit for the benefit of all the creditors of the insurance company. The appellee very earnestly contends that the appellant is not entitled to prosecute the suit, even if a cause of action existed in favor of a creditor or stockholder of said insurance company; the contention of appellee being that the insurance company could not re
Whole court sitting.