Bent v. Alexander

• Citation: 15 Mo.App. 181
• Parties: SILAS BENT, RECEIVER, Appellant, v. L. E. ALEXANDER, RECEIVER, Respondent.
• Decision Date: 12 February 1884
• Court: Court of Appeal of Missouri (US)

15 Mo.App. 181

SILAS BENT, RECEIVER, Appellant,

v.L. E. ALEXANDER, RECEIVER, Respondent.

St. Louis Court of Appeals, Missouri.

Feb. 12, 1884.

APPEAL from the St. Louis Circuit Court, THAYER, J.

Affirmed.

THOMAS T. GANTT, for the appellant.

JOHN D. POPE, for the respondent.

BAKEWELL, J., delivered the opinion of the court.

The Columbia Life Insurance Company was once called the Mound City Life Insurance Company. The name was changed after the date of some of the transactions mentioned below. As the change of name is quite unimportant, it will save confusion, perhaps, to note this fact once for all, and call the company throughout this statement by the name which it bore at its dissolution.

The Columbia agreed with Charles H. Peck to pay him a large sum of money if he would successfully promote a certain scheme for transferring all the assets of the St. Louis Mutual to the Columbia, and reinsuring all risks held by the St. Louis Mutual in the Columbia. The transfer and reinsurance was effected on January 14, 1874, and on the next day the Columbia transferred to Peck, in payment for his services, securities worth about $100,000. On February 15, 1877, the St. Louis Mutual was dissolved. Bent and others were appointed its receivers, and afterwards Bent became its sole receiver. On October 17, 1877, the Columbia was dissolved, and Alexander was appointed its receiver.

The receiver of the Columbia threatened to proceed against Peck to recover the securities turned over to him; the receiver of the St. Louis Mutual also claimed these securities. Peck effected a compromise for $25,000, of which half was paid to the receiver of the Columbia, and half to the receiver of the St. Louis Mutual, in consideration in each case of a full release. This compromise was approved by the circuit court, and the releases were executed by the receivers under orders of court.

The receivers of the St. Louis Mutual sued the receiver of the Columbia to rescind the contract of reinsurance and to recover the assets transferred. The defendant moved for security for costs; but, in order to facilitate and expedite the decision of this controversy, the receivers of the two companies entered into a written agreement on May 2, 1878, to the following effect: The application for security for costs was withdrawn, and, to obviate the necessity of such security, it was agreed that if the finding of the referee should be against the plaintiff, the receiver of the St. Louis Mutual, and this finding be approved, a decree should be entered for the defendant, the receiver of the Columbia, subject to the right of appeal; but that the decree should contain a clause by consent reserving to the plaintiff the right to present and have allowed a claim against the Columbia based upon the claims filed, or to be filed, before the receiver of the Mutual, for the aggregate of such claims allowed, which amount shall be allowed and paid pro rata out of the funds of the Columbia, in the final distribution of its assets. The amount to be allowed upon said claims to be paid to the plaintiff for distribution according to the orders of the court. If the decree is against the plaintiff and is affirmed, or in case of no appeal, then, in order to place in the plaintiff's hands enough to pay expenses and costs, if costs are adjudged against the plaintiff, the receiver of the Columbia is to place in the plaintiff's hands, in cash, $12,500, and three notes, namely: Eads' note for $5,000, Houston's for $15,000, and Goff's for $6,000. If the plaintiff gets judgment against the defendant, the proceeds of the notes are to be credited to the defendant. If the judgment is for the defendant, “ then the said sum of cash and notes shall be deducted from the aggregate amount of the claim to be allowed to the receiver of the St. Louis Mutual as herein stated.” It was further agreed that the receiver of the Mutual assent to the Peck compromise, on the following terms: Peck is to pay the Columbia receiver $25,000, in full of the claim against Peck, and the plaintiff is to release to Peck all claim against him. This $25,000 is to belong to plaintiff if he succeeds in his action, and, on receiving $12,500 in addition to the $12,500 cash, then he is to credit the Columbia on his judgment against its receiver with the amount of securities which Peck received for his brokerage from the Mutual, and the interest thereon, if the referees allow interest, and in that case the Columbia is to have no credit for the $12,500 paid at the date of the agreement. The releases of Peck spoken of above were then executed.

The receiver of the Mutual was not successful in his action to recover from the Columbia the assets transferred when the Columbia reinsured the risks of the Mutual. In that action, on April 2, 1879, a decree was made, afterwards amended on December 29, 1879, in accordance with the provisions of the agreement, which were based upon the theory of a judgment for the defendant in the matter of the recovery of the transferred assets. This decree, after confirming the report of the referees, dismisses the plaintiff's bill, and then, after reciting the agreement between the parties to the action, set out above, proceeds as follows:--

“It is now further adjudged and decreed by consent of the parties to this cause, that for the purposes of carrying into effect the object and purposes of this agreement, and to enable plaintiffs herein to pay the costs of this suit and the necessary and proper expenses they have incurred in prosecuting the same, that the plaintiffs shall return to the said Alexander, receiver, etc., the said notes of Eads and Goff, and that the said Alexander, receiver, etc., shall advance and pay to the plaintiffs in lieu of said notes, and for the purposes aforesaid, the sum of $22,000, cash, to be applied, deducted, and credited in the same manner as it is provided in said agreement that the proceeds of said notes and cash should be applied. And, whereas, Thomas C. Reynolds, Esquire, has been appointed a referee to value, pass upon, and classify the claims against the Columbia Life Insurance Company; and, whereas, Thomas T. Gantt, Esquire, has been appointed referee to pass upon, and value, and classify the claims against the St. Louis Mutual Life Insurance Company; and it may happen that there shall be a difference in the mode of valuation, or in the per cent upon which the policy reserves may be computed, or in the rules by which the claims are classified, it is ordered and adjudged that if such difference should occur, then, in apportioning the whole fund among the two classes of claims for the purposes of such apportionment and division, the values of the two sets of policies shall be equalized, and calculated on the same basis, and up to the same time, and the same rules of classification shall be adopted; and, to enable the said parties to carry this decree into effect without further delays or expense, it is further decreed that, if the said Alexander has not a sufficient amount of funds on hand to pay the above sum of $22,000, he is hereby authorized to execute his note as such receiver for said amount, drawing interest at eight per cent, giving as security...