Alexander v. Relfe

• Citation: 74 Mo. 495
• Parties: ALEXANDER, Receiver, etc., Appellant, v. RELFE, Superintendent of the Insurance Department.
• Decision Date: 31 October 1881
• Court: United States State Supreme Court of Missouri

74 Mo. 495

ALEXANDER, Receiver, etc., Appellant,

v.RELFE, Superintendent of the Insurance Department.

Supreme Court of Missouri.

October Term, 1881.

Appeal from St. Louis Court of Appeals.

REVERSED.

This was a suit brought by Lazelle E. Alexander, as receiver of the Columbia Life Insurance Company, an insolvent corporation, against the Life Association of America, against Henry W. Hough and twelve other persons constituting the board of directors of that association, and against Geo. J. Davis. Alexander held his appointment as receiver under a decree of the St. Louis circuit court rendered in a proceeding brought against the Columbia Life Insurance Company by the Superintendent of the Insurance Department of Missouri. This decree, after enjoining the further prosecution of business by the Columbia, proceeded as follows:

“It is further ordered, adjudged and decreed that the said Columbia Life Insurance Company, and the same is hereby dissolved, and Lazelle E. Alexander, who was, the 7th day of August, 1877, appointed receiver by this court in this cause, be and he is hereby continued as such receiver of all the assets and property, real, personal and mixed, and of all the rights, claims and choses in action of the said Columbia Life Insurance Company, or to which said corporation, or its stock and policy holders through said corporation, have or had any right, title or interest in law or equity, at the date of the filing of petition in this cause, to-wit: February 22nd, 1877; and it is further ordered, adjudged and decreed that all the right, title and interest of the Columbia Life Insurance Company, or its stock and policy holders, through said corporation, to any and all real or mixed estate and to all personal property, wherever the same may be, and to all rights, claims and choses in action, wherever or in whatever manner existing, as the same existed, belonged to or could be claimed or were held by said Columbia Life Insurance Company, at the date of the filing of the petition in this cause, be and the same are hereby, and the title thereto, fully vested in the said Lazelle E. Alexander, as the receiver and officer of this court, and his legal successors in said office, in trust for the use and benefit of the creditors, stockholders and policy holders of the said Columbia Life Insurance Company, as the same may hereafter be respectively adjudged to be entitled thereto by this court. And the said Lazelle E. Alexander is hereby empowered and authorized as such receiver to demand, receipt for, and take possession of all assets and real, personal and mixed estate, moneys, rights and choses in action, books, papers and evidences of indebtedness of every kind whatsoever of said Columbia Life Insurance Company, as fully as the same existed or could be claimed by said company at the date of the filing of the petition herein; and said receiver is hereby empowered and authorized to sue for and recover, in any court of competent jurisdiction, all property, real, personal and mixed, assets and moneys due, books, papers and evidences of indebtedness, as fully as said corporation might or could have done in the full exercise of its corporate powers, or as might or could be done by its policy holders, stockholders or creditors, claiming by or through said corporation.”

Prior to the 1st day of March, 1876, the Columbia Life Insurance Company was known by the name of the St. Louis Life Insurance Company. Its capital stock was $1,000,000, divided into 10,000 shares of $100 each. The whole capital was subscribed, but only a small per cent was paid up, the remainder being represented by the notes of the subscribers secured either by collaterals or by mortgages on real estate. The change in the name of the company was brought about by a vote of the stockholders taken on the 25th day of January, 1876. In the present suit the plaintiff Alexander had judgment in the circuit court against the Life Association, and thereupon legal proceedings were instituted by Wm. S. Relfe, then Superintendent of the Insurance Department of Missouri. These proceedings resulted in the dissolution of the Life Association, and the commitment of its affairs to his charge, and he was then substituted as defendant in place of the Life Association, and took this appeal. The Life Association was a mutual company.

The facts out of which the present suit grew, were as follows: In October, 1875, preliminary negotiations took place between certain officers of the St. Louis Life Insurance Company and the Life Association, which resulted in the passage by the board of directors of the Life Association, on the 13th day of November, of a resolution authorizing its president to purchase the entire capital stock of the St. Louis Life Insurance Company on terms fixed by the resolution. This resolution was afterward, (November 18th,) modified so as to authorize the purchase of not less than 9400 shares. Acting under this authority, the president entered into a contract with defendant Davis dated November 23rd, the terms of which were as follows:

“That the Life Association of America, for and in consideration of $1 to it in hand paid by said George J. Davis, the receipt of which is hereby acknowledged, hereby agrees to purchase of and from said Davis 9400 shares of the capital stock of the St. Louis Life Insurance Company, and as much more as said Davis shall transfer and deliver, the said stock being presented for delivery or assignment within thirty days from date hereof, free from all liens thereon; the certificate of the secretary of the St. Louis Life Insurance Company that there are no liens thereon is to be admitted and taken as sufficient evidence of such fact; provided, however, that said Life Association of America shall not be compelled to accept or pay for a less number of shares than 9400, nor any number of shares unless tendered for assignment within thirty days of the date hereof; and the said Life Association of America hereby agrees to pay to said Davis for said stock so delivered, to-wit: For 9400 shares thereof, the sum of one million, two hundred and fifteen thousand dollars ($1,215,000), and par value for all said stock above that amount; said sum to be paid in the following manner, to-wit: If said Davis assigns and delivers the whole of said stock, to-wit: One million dollars ($1,000,000), then the Life Association agrees to pay to him one hundred and thirty-seven thousand, seven hundred and sixty-six dollars, sixty-six cents ($137,766.66), in cash, and one million, one hundred and thirty-seven thousand, two hundred and thirty-three dollars and thirty-four cents ($1,137, 233.34), by draft of Henry W. Hough, President of the Life Association of America, on the Life Association of America, and accepted by it, payable to said Davis at one day's sight.

But should said Davis assign and deliver 9400 shares or over, and less than 10,000 shares, then the said Life Association may deduct from the cash to be paid to him, as aforesaid, less such sum or sums of money as have been paid in cash to the St. Louis Life Insurance Company, for or toward or in connection with the taking of the stock of the said St. Louis Life Insurance Company, by the parties holding the same, or to whom the same was issued, which stock said Davis does not deliver, and there shall be deducted from the draft hereinbefore provided for, the amount of the loan made to the holders of the stock not delivered, on account of the said stock, the securities for said loan being held by the St. Louis Life Insurance Company; and said cash and loans, so deducted for the amount of stock not delivered, shall not together exceed the par value of the stock not delivered; and in consideration of the premises above set forth, said Davis agrees to use all efforts in his power to procure 9400 shares or more, of the capital stock of the St. Louis Life Insurance Company, and receive the cash and draft above set forth, to be delivered by him to the Life Association of America, as aforesaid.

And if he delivers the whole of the 10,000 shares of said stock, and receives the draft hereinbefore provided to be given him therefor, that with such draft he will, contemporaneously with the transfer of said stock, procure from the said St. Louis Life Insurance Company--

Real estate amounting to

$212,329.01

Collaterals

196,675.95

Bills receivable

12,837.69

Bonds and stock

289,423.86

The capital stock of the Commercial Fire Insurance Company

268,000.00

The capital stock of the Exchange Bank

90,000.00

Capital stock of the Security Bank, held by the St. Louis Life Insurance Company

40,000.00

Accrued interest over and above excessive interest

27,967.03

The above items being the same amount as the draft to be given, for which it is to be substituted. But, if the said Davis shall be unable to perfect, assign and deliver to said Life Association of America the entire 10,000 shares of stock, and should deliver 9400, or more shares thereof, then said Davis shall not be required, on said draft so received by him from the Life Association of America, to procure from the St. Louis Life Insurance Company the entire amount of real estate, loans, collaterals and bills receivable aforesaid; but shall be only required to procure from said St. Louis Life Insurance Company such loans, collaterals and bills receivable, after deducting therefrom the amount of indebtedness of each of the said stockholders owning the stock which said Davis is unable to deliver to said Life Association of America, which indebtedness accrued on loans made at the time the said respective stockholders took their stock or in connection therewith.”

In pursuance of this contract the Life Association of America delivered to Davis a draft drawn by its president upon its treasurer for $1,111,894.34, together with cash to the amount of $130,401.66. With the draft Davis purchased from the St. Louis Life Insurance Company all of its stock notes, together with the mortgages and...