Hicks v. Poe
Decision Date | 16 November 1925 |
Docket Number | No. 34,34 |
Citation | 70 L.Ed. 187,46 S.Ct. 29,269 U.S. 118 |
Parties | HICKS, Alien Property Custodian, et al. v. POE et al |
Court | U.S. Supreme Court |
Messrs. Daniel O. Hastings, of Wilmington, Del., Hartwell Cabel, of New York City, and the Attorney General, for appellants.
Messrs. Stuart S. Janney and J. Kemp Bartlett, both of Baltimore, Md., for appellees.
This suit for an accounting was begun in the federal District Court for Mayland on June 12, 1920, by the receivers of the United Surety Company, a corporation of that state, against the Munich Reinsurance Company, a Bavarian corporation. The controversy arose out of a written agreement entered into by the companies in 1906. There had been active litigation in the Maryland courts where much became res judicata. See Munich Reinsurance Co. v. United Surety Co., 113 Md. 200, 77 A. 579; Id., 121 Md. 479, 88 A. 271; Poe v. Munich Reinsurance Co., 126 Md. 520, 95 A. 164. This suit was then begun under section 9 of the Trading with the Enemy Act October 6, 1917, c. 106, 40 Stat. 411, 419 as amended (Comp. St. Ann. Supp. 1923, § 3115 1/2 e), because the receivers sought to reach funds of the Munich Company in the possession of the Alien Property Custodian. The District Court, after careful opinions, entered a decree for the receivers for $189,517.16 with interest. 276 F. 949; 293 F. 764. The Court of Appeals affirmed it without opinion. Miller v. Poe, 293 F. 766. The appeal to this court, allowed January 7, 1924, was taken as of right under section 241 of the Judicial Code (Comp. St. § 1218). We find no reversible error. Two matters only require mention. Neither presents a question federal in its nature.
The United engaged in the business known as surety, fidelity, and burglary insurance. The Munich, by what is called a participation contract, agreed with it to assume one-third of the liability on every such risk written during a period of five years. The management of the business was to be left to the United without restriction. Upon an annual accounting the Munich was to receive one-third of any profits or pay one-third of any losses. A decree entered against the Munich in the state court for losses incurred during the five-year period had been satisfied. This suit is for losses incurred after its expiration on insurance of the United then still outstanding. The company had been unsuccessful. The state court after the expiration of the five-year period appointed receivers who proceeded to wind up the business. They sought in vain to reinsure all outstanding risks. Then, with the approval of the court, they secured, so far as possible, cancellation of the outstanding insurance by returning unearned premiums. The losses on account of which this suit was brought were on risks entered into during the existence of the participation contract and...
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