5 Mo. App. 173 | Mo. Ct. App. | 1878
delivered the opinion of the court.
This is a proceeding brought by the appellant, as superintendent of the Insurance Department of Missouri, under
The restraining order was so extended as to prohibit Priest from taking charge under the assignment, and separate answers were filed by Priest and the company. That of Priest admits that the capital stock of the company was impaired, and that, so far, the company was insolvent; denies that it was engaged in business when the suit was brought; and alleges that on June 12, 1877, it ceased to do any further new business, and made the assignment, under the assignment law, for the benefit of all its creditors, which was accepted by Priest, and recorded; that the assignment was in good faith, in no way obstructed the appellant, and was assented to and confirmed by the stockholders of the company. It was further admitted that at the time of the assignment the company could not pay its creditors in full, and return to its stockholders the amounts they had paid on their stock. A reply admitted the material allegations alleged in his behalf by the respondent Priest.
The answer of the company admitted that the appellant
Upon the trial, the annual statement of the company for the year ending Dec. 31, 1876, being shown to the late president of the company, from the files of the Insurance Department, the signatures were proved, and it appeared the paper had been sent to the department as the statement of the company. The respondents then admitted, for the purposes of the trial, that the company was insolvent at the date of the assignment. With a view of showing that the assignment was not made in good faith, but to cover up fraudulent acts charged in the pleadings, and was in fraud of the insurance laws, the appellant offered to show that a lot of ground sworn in the annual statement to be worth $100,000, and as having cost that sum, was assessed at only $37,500, áud had been bought by the company with its own stock, worth then only a nominal sum ; that instead of six hundred and seventy-eight shares of stock in the Exchange Bank, sworn in the statement as being the company’s property, it had only six shares ; that the company never had the one hundred and ten first-mortgage bonds of the St. Louis, Kansas City, and Northern Railroad Company shown by the statement, or any other of- the good assets shown by the statement, but only various assets which the appellant offered to show were of comparatively little value. This evidence was objected to under the issues, and excluded. The court below ruled that the question of the power of the company to make the assignment was to be passed upon, but that the court would not then try other issues. On
It is contended by the respondents that the Commercial Insurance Company had the right, on the twelfth day of June, 1877, to make a voluntary assignment for the benefit of creditors. Whether the statute in relation to assignments (Wag. Stat. 150) would, in the absence of the insurance laws of this State, cover a case like the present, where, as would appear from the answer of the company, a minority of the stockholders did not assent to the assignment; whether the assignee would have sufficient powers to adjust the rights pf all parties in interest; these, and the incidental question what, in such case, would become of the franchise, and what, if any, would be the legal obstacle that would prevent the company from resuming its business after the assignment, do not arise upon the facts of this case. It is sufficient that the Legislature has provided for dissolution here by direct proceeding; that the assignment law has no provisions especially applicable to insurance companies, while the insurance laws have such; that the assignment law does not provide or attempt to provide for infractions of the insurance laws by insurance companies, while sections of the insurance laws were passed especially for that purpose.
That the insurance laws of this State provide, in express terms, for the dissolution of fire insurance companies and for winding up their business, appears from sec. 32 of the act of 1869, relating to insurance companies other than life. Sess. Acts 1869, p. 56; Wag. Stat. 772. This section provides that "it shall be the duty of the superintendent of the Insurance Department, whenever he shall have good reason to suspect that the affairs of any insurance company * * * doing in this State the business mentioned in the first section of this act, are in an unsound con
Upon the assumption of the commission of an offence authorizing the proceeding, and of insolvency, it follows that a company has no right to make an assignment and withdraw itself from the operation of the law. To hold otherwise would be to hold that the effectual means by which the State seeks to enforce a line of public policy may be set at naught by the action of individuals, and the operation of the law substantially evaded. The General Statutes of 1865 show no laws of the character of those now under dis
Regarding the question from the point of view of the policy-holder, the same result follows. The words of the statute above quoted, in regard to the decree for dissolution, if they are of any force, apply to companies hopelessly insolvent and guilty of frauds upon the law. But if the law requires such companies to be prosecuted, and prescribes for them this decree, certainly here is a legislative declaration that, after the commission of the guilty acts lor which they are prosecuted, the interests of the policy-holders shall not be intrusted to them. But the assignment is the act of the company, and by this act policy-holders and property alike are turned over to the company’s assignee. Thus the State, which has said that the policy-holder and the piiblic have, as against innocent companies, no sufficient security without an elaborate system of checks and restrictions and the protection of a public officer, is supposed, under its laws, to commit to a guilty company the disposition of the policy-holder and his interests ; and this, while the public prosecutor is seeking to carry into effect the statutory provisions with the execution of which he is charged.
Under the statute, before suit is brought, a- company whose capital stock is impaired has its option. It may make itself sound. But while it attempts to do business
It is urged, indeed, that when a company thus makes an assignment it ceases to do business, and so is not amenable to laws which relate only to ‘ ‘ insurance companies doing business in this State.” Assuming that the motive of using
The questions here involved depend upon the insurance-laws of this State, and cases of other States afford little aid. The appellant relies upon the case of Bank Commissioners v. Bank of Brest, Harr. (Mich.) 106, while the respondents rely on Town v. Bank of River Raisin, 2 Dougl. (Mich.) 530. Neither case involved any question as to insurance companies, and the rights of policy-holders and proceedings-by the State under insurance laws were, of course, not in
It follows from what has been said that there was error in the action of the court below, by which proceedings were sustained partly under the insurance laws and partly under the Assignment Act. The order of the court prohibiting the company from doing business implied that the appellant had made out his case. Indeed, the company substantially admitted this by its answer, and on the trial. Upon the facts admitted, it followed as a necessary legal consequence that the assignment was void ab initio. That the assignment was made before suit brought was immaterial, as at the time of the assignment the company had brought itself within the thirty-second section, and the process prescribed by it. In fact, the first step in the prosecution, the demand of the “ special statement,” which was never responded to, was taken on June 1, and the assignment was not made until June 11.
The judgment is reversed and the cause remanded, to be proceeded with according to this opinion.