Red Star Laboratories Co. v. Pabst

• Decision Date: 19 December 1938
• Docket Number: No. 6591.,6591.
• Citation: 100 F.2d 1
• Parties: RED STAR LABORATORIES CO. et al. v. PABST.
• Court: U.S. Court of Appeals — Seventh Circuit

100 F.2d 1 (1938)

RED STAR LABORATORIES CO. et al. v. PABST.

No. 6591.

Circuit Court of Appeals, Seventh Circuit.

November 15, 1938.

Rehearing Denied December 19, 1938.

Edward G. Berglund and Edward J. Hess, both of Chicago, Ill., for appellant.

Josiah McRoberts and Russell J. McCaughey, both of Chicago, Ill., for appellees.

Before SPARKS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

MAJOR, Circuit Judge.

On January 16, 1937, Red Star Laboratories Company (hereafter called Red Star), one of the appellees herein, obtained a judgment against Edmund Friedolin Pabst in a suit wherein Pabst was found to have fraudulently and maliciously violated plaintiffs' rights under the Federal Trade-Mark Act, 15 U.S.C.A. § 81 et seq. Divers writs and aliases were issued in an effort to collect said judgment, but without avail. For sometime the whereabouts of Pabst was unknown, but in October, 1937, he appeared in court and obtained a stay on the ground of illness. October 20, 1937, Red Star filed its creditor's bill against Edmund Friedolin Pabst and others, in which neither Emma Pabst, the appellant and wife of Edmund Friedolin Pabst, nor the insurance companies hereinafter mentioned, were parties. The bill recited the procurance of the judgment against Pabst, as above related, that an execution had been returned unsatisfied and upon information and belief that defendants named in the bill had some property, real, personal or mixed, in which Edmund Friedolin Pabst was interested and which should be delivered to a receiver to be appointed by the court for the benefit of the plaintiff. The complaint was afterwards amended, but at no time was there any allegation relating to any of the insurance policies in controversy.

October 29, 1937, Red Star filed a petition praying for the appointment of a receiver for said Edmund Friedolin Pabst. The petition contained allegations with reference to its judgment against Pabst and the unavailing effort which had been made to satisfy the same; that Pabst was then in the hospital in a precarious condition of health; that he was the owner of a substantial business known as the Pabst Chemical Company (a defendant named in the creditor's bill), and charged Pabst with an attempt to secrete his assets. It alleged the early demise of Pabst as likely, and that the rights of the petitioner required that his assets be preserved. Upon this petition, the court, on the same day, without notice and without any requirement as to bond, appointed Paul C. Johnson as receiver for said Edmund Friedolin Pabst. November 10, 1937, the receiver filed a petition reciting that he had inspected the books and accounts in the possession of the Pabst Pharmaceutical Company and had made discovery that Edmund Friedolin Pabst was insured under divers policies of insurance in the following named companies: New York Life Insurance Company, Guardian Life Insurance Company of New York, Union Central Life Insurance Company, John Hancock Mutual Life Insurance Company and Provident Mutual Life Insurance Company. The number, date of issue, type and amount of each policy was given. The first of said policies was issued February 24, 1896, and the last August 25, 1916. The total amount of insurance, as disclosed by the petition, was $60,000 upon which Pabst had borrowed $40,380.65. The petition recited that the policies were in force; that Emma Pabst, was named as the beneficiary in each of said policies and that the receiver was entitled to receive all equity existing in said policies. The petitioner prayed for an order directing each of said insurance companies to remove the name of Emma Pabst as beneficiary in said policies and to substitute therefore the name of Paul C. Johnson, as receiver, and for authority authorizing and directing the receiver to serve each of said life insurance companies with notice of such order. On the same day, without notice to any of said insurance companies or to Emma Pabst, the court entered an order as follows:

"This cause coming on to be heard on motion of Paul C. Johnson heretofore appointed Receiver herein for an order directing certain life insurance companies to change and amend insurance policies heretofore issued on the life of Edmund Friedolin Pabst, defendant herein, in order that the said Paul C. Johnson, as Receiver, may be the sole beneficiary thereof, and the court having considered the petition of the Receiver filed herein this day, and being fully advised in the premises,

"It Is Hereby Ordered that the New York Life Insurance Company, the Guardian Life Insurance Company of New York, Union Central Life Insurance Company, John Hancock Mutual Life Insurance Company, and Provident Mutual Life Insurance Company remove forthwith the name of Emma Pabst as beneficiary on all of the policies heretofore issued by the said life insurance companies on the life of Edmund Friedolin Pabst, and to insert as sole beneficiary of said life insurance policies the name of Paul C. Johnson, as Receiver.

"It Is Further Ordered that the said life insurance companies remove the name of any and all beneficiaries and substitute therefore Paul C. Johnson, as Receiver, in the following life insurance policies: (Naming each company, together with the number, date, type and amount of each policy.)

"It Is Further Ordered That Paul C. Johnson as Receiver be and is hereby directed to serve notice upon each and all of the several life insurance companies hereinabove mentioned by delivering to the said companies a copy of this order certified by the Clerk of this Court."

November 13, 1937, three days after the entry of said order, the court allowed leave to amend the creditor's bill so as to make Emma Pabst and each of said insurance companies, parties defendant, and this was done. Within thirty days from the time of the entry of the order of November 10, 1937, the Guardian Life Insurance Company filed its petition, joined in by Emma Pabst, to vacate said order of November 10, 1937. The motion was denied on January 8, 1938. It is from this order the appeal is taken.

Prior to the entry of said order, Emma Pabst, January 6, 1938, filed her verified answer to the amended bill of complaint, in which answer is set forth in detail the facts regarding each of the life insurance policies involved. December 27, 1937, an answer was filed by the Guardian Life Insurance Company, and January 7, 1938, the John Hancock Mutual Life Insurance...