Levi v. Columbia Life Ins. Co.

• Decision Date: 01 January 1880
• Citation: 1 F. 206
• Parties: LEVI v. COLUMBIA LIFE INS. CO.
• Court: U.S. District Court — Eastern District of Missouri

1 F. 206

LEVI v. COLUMBIA LIFE INS. CO.

United States Circuit Court, E.D. Missouri.

1880

Given Campbell, for plaintiff.

Pope &amp McGinness, for defendant.

Motion for execution and order on receiver of an insurance company dissolved under proceedings in a state court, for the payment of a judgment obtained against such insurance company pending said proceedings in the state court.

TREAT J., (orally.)

M. D Lewis, public administrator, has filed his petition to have the judgment in favor of Levi revived; and notice thereof having been served on the receiver of the defendant (dissolved,) the latter appeared, and, not objecting thereto, it was adjudged that said judgment be revived in the name of said administrator, Lewis. Thereupon a rule was entered upon said receiver to show cause why he should not pay the amount of said judgment, or why execution should not issue against the realty or assets of said dissolved corporation. To that rule said receiver has made an answer to the following effect, viz: That said corporation was a Missouri corporation; that on February 22, 1877, the superintendent of the insurance department filed in the proper state court a petition for the dissolution, etc., of said corporation; that on February 23, 1877, a preliminary injunction was issued; that on August 7, 1877, Alexander was appointed temporary receiver, and that on October 17, 1877, said corporation was dissolved by a decree entered in said proceedings.

The other averments in the return pertain to what has been done under said decree towards winding up the affairs of said corporation, among which it is stated that plaintiff's attorney presented the demand in question for allowance by the referee as a preferred claim, etc.

The suit in this court, which ripened into a judgment, was brought after proceedings had been commenced in the state court to wind up the corporation named, and although judgment was rendered on plaintiff's demand, before the decree of dissolution was had, yet the decree operated to put in custodia legis of the state tribunals all the assets of the corporation, as existing on the day of petition, filed. Hence, the judgment of the plaintiff, though valid and subsisting, must be treated like any other demand duly proved, subject to be allowed as such, on presentation to the referee in the state court. This court cannot interfere with the jurisdiction and proceedings of the state court and its officers, who are duly administering the assets of said dissolved corporation.

It may be very difficult to reconcile the several decisions of the United States supreme court concerning such questions, especially in the light of the two cases of Payne v. Hook; yet the current of its rulings, and the general principle to be applied, is clear, viz.: that whatever court first obtains jurisdiction of the res, or assets of a defendant, must proceed therewith uninterrupted by any other tribunal. Were this not so unseemly conflicts and constant discord would result.

The question raised here is not a new one. Twenty odd years ago the circuit and district courts of the United States had to meet the question, and they determined with general uniformity that where the res or property was in the custody or possession of the state tribunals they could not be interfered with. Hence, some twenty-five years ago, cases went up from Michigan and Pennsylvania, in which that question was presented to the supreme court of the United States.

After argument a reargument was ordered, which ripened into judgment in the case of Taylor v. Carryl, 20 How. 583. The result was this ruling: That, considering the peculiar character of our government, whatever rightful jurisdiction first obtained custody of these matters, it must, without interruption by other courts, be permitted to proceed.

For instance, in a case of admiralty, when under the various state laws, by attachment or otherwise, the res was in the custody of the state authorities, and a warrant is issued in admiralty, where there is exclusive jurisdiction as to some matters, (a stronger case than Mr. Campbell's,) what shall be done with that process? Shall a United States court undertake to take the res out of the custody of the state officers? No. So said this court and the supreme court, after reargument. And the state court accordingly proceeded with the matter. If, subsequent thereto, the rights of the parties having been duly considered, a libellant comes, having a prior lien, and pursues the property in the hands of the purchaser, his lien will be recognized and enforced. So stands the body of the admiralty law up to this hour.

Now, vice versa, suppose there was a receiver of this court in the custody and administration of certain affairs, and the state courts attempted to interfere with such administration, this court would repel any such interference, and any person who, despite the lawful custody of the officers of this court, should attempt to interfere with such administration, would be in contempt. But, waiving that whether they would or would not, this court would insist upon its officers administering the estate in due form. On the other hand, if the state court is lawfully in possession of these matters it must go on in its course without interference. They are independent jurisdictions for the respective purposes.

With these ancillary matters stated, you may present your demand for and pursue the remedies in one or the other tribunals as you please. Further, take the case in hand. There is an act to be examined-- the insurance act of this state. I have examined a copy of the insurance laws with reference to the force and effect of the act. In a few words it is this Under the particular laws of the state, under certain circumstances, the state courts should pass preliminarily on certain matters, which might ultimately ripen into a decree for settlement of all the affairs relating to a certain matter or company. Now, if federal courts or state courts elsewhere may proceed by their judgments to strike through such a settlement, which is intended for the equal distribution of all the assets of the company, the settlement may be ultimately...