Blake v. Old Colony Life Ins. Co.

• Decision Date: 19 November 1913
• Docket Number: 3,722.
• Citation: 209 F. 309
• Parties: BLAKE v. OLD COLONY LIFE INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

209 F. 309

BLAKE v. OLD COLONY LIFE INS. CO.

No. 3,722.

United States Court of Appeals, Eighth Circuit.

November 19, 1913

Elliott W. Major, Atty. Gen., and Campbell Cummings, Asst. Atty Gen., for plaintiff in error.

Silver & Dumm, of Jefferson City, Mo., for defendant in error.

Before HOOK and SMITH, Circuit Judges.

SMITH Circuit Judge.

The state of Missouri has an insurance department, the chief officer of which is designated as the 'Superintendent of the Insurance Department.' Mr. Robert G. Yates held this office in the years 1903 and 1904. He was then succeeded by W. D. Vandiver who in turn was succeeded by the plaintiff in error, hereafter called the defendant, Frank Blake. In 1903 and 1904 Mr. Joseph B. Reynolds was the actuary of the department. The laws of Missouri have at all times here material contemplated the organization of: (1) Life and accident companies on the joint-stock or mutual plan, or the two combined; (2) assessment insurance companies; (3) companies on the stipulated premium plan; and others. This was an action in replevin by the Old Colony Life Insurance Company, hereafter called the plaintiff, against Frank Blake to recover three notes and trust deeds given to secure the same. The parties filed a stipulation in writing, waiving a jury as provided in section 649 of the Revised Statutes (U.S Comp. St. 1901, p. 525). The court made special findings of facts substantially as follows:

This is an action of replevin for securities, amounting to $5,000, deposited by the Cosmopolitan Life Association on or about October 17, 1903, with the insurance department of the state of Missouri. The defendant Blake is now superintendent of that department, and is now in possession and custody of such securities. The Cosmopolitan Life Insurance Association was a foreign corporation, organized under the laws of the state of Illinois, and made application to transact business in the state of Missouri on the stipulated premium plan, under article 4 of chapter 119 of the Revised Statutes of the state of Missouri of 1899. On making application to the insurance department of the state of Missouri it was informed by the then superintendent of insurance that it was the ruling of the insurance department of the state of Missouri that before a license under the stipulated premium law could be issued it would be necessary for the Cosmopolitan Association to deposit $5,000 in money or securities with the department. The construction placed upon the law by the department was that all companies, foreign or domestic, must make such deposit before authority to do business in the state could properly be issued. The actuary of the department, Mr. Joseph B. Reynolds, also informed the company that it would be required to deposit $5,000 before securing a license in the state, under the stipulated premium law, for the reason that it had no such deposit in the state of Illinois, and that the Missouri department would require that the deposit, if not made there, must be made in Missouri, in order that it might be placed on the same basis as domestic companies under the same law. No requirement existed under the laws of Illinois for making said deposit with the Illinois insurance department and that department would not receive such a deposit. The Cosmopolitan Association at once arranged to make, and did make, the required deposit with the Missouri insurance department, and thereupon the license to do business in Missouri was granted to it by that department. Contemporaneously with this application on the part of the Cosmopolitan Association, that company had undertaken to reinsure the business of a fraternal insurance company, known as the Royal Tribe of Joseph, then doing business in the state of Missouri, and the reinsurance agreement entered into between the two organizations was submitted to the insurance department of the state of Missouri for approval. That approval was granted upon the making of the deposit and the issuance of the certificate of authority or license as aforesaid, and thereupon the Cosmopolitan Association took over the business of the fraternal organization under said reinsurance agreement. This certificate of authority or license was renewed for one year upon the 1st of March, 1904, and again upon the 12th day of May, 1905, for a period terminating March 1, 1906, and the Cosmopolitan Association continued to do business in Missouri until the 1st day of January, 1906, when it withdrew from the state and requested that its certificate of authority and license be canceled. Meantime the securities that it originally deposited, and which are the subject-matter of this suit, remained on deposit with the insurance department, and were left there without demand by the Cosmopolitan Association after its withdrawal from the state. Subsequently, and on or about the 9th day of September, 1909, an agreement was entered into between the Cosmopolitan Association and the Old Colony Life Insurance Company, a corporation organized under the laws of the state of Illinois, plaintiff herein, whereby plaintiff purchased all the assets of the Cosmopolitan Association of every character and description, and plaintiff agreed to assume all liabilities of said association for death claims, and all other liabilities of such association shown by an attached exhibit. Plaintiff further agreed that holders of stipulated premium policies in said Cosmopolitan Association should be entitled to receive, in exchange for their policies in said association, the plaintiff's 'whole life nonparticipating policy' at the same rates of premium they had been paying to said Cosmopolitan Association, plus the increase in said rates necessary to conform to their attained ages; and on the same day the Cosmopolitan Association for valuable considerations, chief among which was the assumption of the risks of said association by plaintiff, transferred, conveyed, and assigned to the plaintiff, by writing duly executed, all the moneys, securities, books, records, office furniture, bills receivable, and all other personal or mixed property or effects belonging to said Cosmopolitan Association. Thereafter plaintiff by letter made demand upon the defendant as insurance superintendent for the recognition of plaintiff as the owner and assignee of the funds in his hands, and defendant refused until all of the outstanding policy holders who might be held to have the right to proceed against the deposit were satisfied. Coupled with this demand plaintiff asserted that it did not desire to withdraw this deposit from the insurance department of the state of Missouri until all the policies that were formerly issued by the Cosmopolitan Association were fully satisfied. This was done before the plaintiff company had investigated the nature of the deposit and the requirements of the law under which it was made. Meanwhile a number of suits were filed in Missouri against the Cosmopolitan Association, and in some cases against the plaintiff company, by persons holding policies in the Cosmopolitan Association issued while it was doing business in this state.

Judgments were afterwards secured against the Cosmopolitan Association, aggregating about $2,000 and some other small claims are pending. Steps were taken under the Missouri statutes to subject this deposit to the payment of these judgments. The plaintiff made demand upon the defendant for these securities, which demand was refused. This suit followed. The Cosmopolitan Association is no longer doing business, and has no assets out of which claims may be satisfied. The plaintiff now has assumed the obligations of the Cosmopolitan Association to the extent hereinabove set forth. It is doing a legal reserve life insurance business in the state of Illinois, and perhaps elsewhere, but not in Missouri. Its headquarters are in the city of Chicago, and it has on deposit with the insurance department of Illinois an aggregate of $221,000. The laws of Illinois do not know stipulated premium plan companies as defined in the laws of Missouri, and no deposits are there required or authorized from such companies, either foreign or domestic. It is conceded that there is no question of retaliatory law present in this case. At the time of the making of the deposit nothing was said or done with reference thereto by the representatives of the Cosmopolitan Association or of the state, except as hereinabove set forth, but the following certificate or license was issued:

'It is hereby certified that the Cosmopolitan Life Insurance Association of Freeport, Illinois, has complied with the requirements of the insurance laws of this state and is hereby authorized, subject to the provisions thereof, to do business of life insurance on the stipulated premium plan in the state of Missouri, until the first day of March, 1904.'

Upon these facts the court found and held:

(1) The insurance laws of Missouri do not require a deposit with the insurance department by foreign insurance companies doing business in that state on the stipulated premium plan....