Cogliano v. Ferguson

• Decision Date: 28 May 1923
• Citation: 139 N.E. 527,245 Mass. 364
• Parties: COGLIANO v. FERGUSON et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

245 Mass. 364

139 N.E. 527

COGLIANO

v.FERGUSON et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 28, 1923.

Report from Superior Court, Suffolk County; Marcus Morton, Judge.

Bill in equity by Patrick Cogliano against James H. Ferguson and others, in which the State Street Trust Company was summoned as trustee. On report from a justice of the superior court. Decree entered dismissing the bill.

W. W. Clarke, of Boston, and C. J. Muldoon, Jr., of Somerville, for plaintiff.

Sawyer, Hardy, Stone & Morrison, of Boston (E. C. Stone, of Boston, of counsel), for defendant Stoddard.

BRALEY, J.

The Casualty Company of America, a corporation organized under the laws of the state of New York, issued to the defendant Ferguson October 6, 1914, a policy of indemnity against the loss or damage suffered by him through accidents to his employees as therein stipulated while they were employed in certain work described in the policy. By its terms it furnished insurance, not only against loss, but also bound the company to defend actions against the assured during the life of the contract. The plaintiff, an employee, suffered severe injury caused by the negligence of the assured, for which he recovered judgment September 17, 1917, for an amount in excess of the limitation of liability stated in the policy. Cogliano v. Ferguson, 228 Mass. 147, 117 N. E. 45. The judgment having been wholly unsatisfied, the plaintiff by force of St. 1914, c. 464, could ordinarily maintain a bill in equity to have the insurance money applied in payment. Lorando v. Gethro, 228 Mass. 181, 117 N. E. 185, 1 A. L. R. 1374. But on May 4, 1917, the company was declared insolvent, and the corporation was dissolved by the Supreme Court of the state of its domicile, and Jesse S. Phillips, superintendent of insurance, who since suit was brought has been succeeded in office by the defendant Cosgrove, was directed to take possession of its property and assets and liquidate the business of the company, pursuant to section 63 of the statutes of New York (Consol. Laws, c. 28) governing proceedings against and liquidation of delinquent insurance companies companies. By subsection 3 of section 63--

‘The rights and liabilities of any such corporation and of its creditors, policy holders, stockholders and members, and of all other persons interested in its assets, shall, unless otherwise directed by thecourt, be fixed as of the entry of the order directing the liquidation of such corporation in the office of the clerk of the county wherein such corporation had its principal office for the transaction of business upon the date of the institution of proceedings under this section.’

The order of liquidation also vested the superintendent by operation of law ‘with title to all of the property, contracts and rights of action * * * of such corporation as of the date of the order.’

The jurisdiction of the court to enter the order or decree is not attacked. It is entitled to full faith and credit in this commonwealth. Converse v. Ayer, 197 Mass. 443, 455, 84 N. E. 98. See Folger v. Columbian Insurance Co., 99 Mass. 267, 96 Am. Dec. 747. And the parties have stipulated that under the decisions of the courts of last resort of the state of New York ‘the title to the property, contracts and rights of action of the company vested under the statute and the order of the court in the state superintendent as liquidator.’ By St. 1915, c. 183, the company, which also transacted business in this commonwealth, was required under the Workmen's Compensation Act to deposit with a trustee to be named by the Industrial Accident Board an amount equal to 25 per cent. of its obligations incurred or to be incurred under policies issued to employers. If the company ceased to do business, the--

‘amounts so deposited shall be available for the payment of the said obligations of the company to the same extent as if the company had contracted to transact business in this commonwealth, and it shall be the duty of the trustee so receiving said deposits to pay such obligations of the retiring company at the times and in a manner satisfactory to the Industrial Accident Board.’

Pursuant to the statute the company made a deposit of certain securities with the defendant the State Street Trust Company, which has paid out from the fund under ‘certain orders and decrees, and to the liquidator thirty-four thousand dollars,’ leaving substantially ‘twenty-nine thousand and thirty dollars,’ which the plaintiff, who did not bring suit until July 21, 1921, seeks to reach and apply in so far as necessary in satisfaction of the judgment. But the plaintiff has no greater interest than that of the assured under whom, because of the statute, he can assert his right to subrogation. Lorando v. Gethro, 228 Mass....