Cramer v. Phoenix Mut. Life Ins. Co. of Hartford, Conn., 10786-10789.

• Decision Date: 06 July 1937
• Docket Number: No. 10786-10789.,10786-10789.
• Citation: 91 F.2d 141
• Parties: CRAMER v. PHŒNIX MUT. LIFE INS. CO. OF HARTFORD, CONN., et al., and three other cases.
• Court: U.S. Court of Appeals — Eighth Circuit

91 F.2d 141 (1937)

CRAMER v. PHŒNIX MUT. LIFE INS. CO. OF HARTFORD, CONN., et al., and three other cases.^*

Nos. 10786-10789.

Circuit Court of Appeals, Eighth Circuit.

July 6, 1937.

Fred E. Fuller, of Toledo, Ohio, and Bruce J. Flick, of Des Moines, Iowa (Welles, Kelsey & Cobourn, of Toledo, Ohio, Havner, Flick & Powers, of Des Moines, Iowa, George D. Welles, of Toledo, Ohio, and H. M. Havner, of Des Moines, Iowa, on the brief), for appellants.

Wayne G. Cook, of Davenport, Iowa (J. R. Lewis, Walter M. Balluff, Lane & Waterman, and Cook & Balluff, all of Davenport, Iowa, on the brief), for appellees.

Before GARDNER, WOODROUGH, and VAN VALKENBURGH, Circuit Judges.

GARDNER, Circuit Judge.

The record presents appeals from two final decrees entered in two suits in equity begun by bills of interpleader. On stipulation of counsel and on order of this court the appeals have been consolidated for hearing in this court.

The suits involve the distribution of the proceeds of two policies of life insurance upon the life of Arthur E. Hazeldine. One of these policies was issued by the appellee Phœnix Mutual Life Insurance Company of Hartford, Conn., and the other was issued by the appellee Ætna Life Insurance Company. The insured, a resident and citizen of Scott county, Iowa, died intestate September 22, 1935. The policy in the Phœnix Mutual Life Insurance Company was payable to the "executor, administrator or assignee of the insured," and the policy in the Ætna Life Insurance Company was payable to the "executors or administrators of the insured." Each policy was payable at the home office of the insurer at Hartford, Conn. On September 24, 1935, following insured's death, H. R. Lafferty, a citizen and resident of Iowa, was appointed and duly qualified as administrator of the estate of Arthur E. Hazeldine, deceased, by the district court of Scott county, Iowa, and on November 21, 1935, Charles W. Cramer, a citizen and resident of Connecticut, was appointed and duly qualified as administrator of the estate by a probate court of the state of Connecticut. Each administrator duly filed proof of death with the respective insurance companies and claimed the proceeds of the policies, but neither has commenced any action to recover the proceeds.

Grace K. Hugh, a former wife of deceased, and a resident of Ohio, and Mary E. King, mother of Grace K. Hugh, also a resident of Ohio, who had claims against Arthur E. Hazeldine, assigned them to James S. Coburn, a resident of Connecticut. As to these claims it need only be said that Coburn asserts that Grace K. Hugh and Mary E. King, who were creditors of Hazeldine by contract with him, became the equitable owners of the proceeds of the policies and that by the assignment of their rights to him he became entitled to priority of payment from the proceeds to the extent of the indebtedness to his assignors. On November 27, 1935, Coburn commenced separate actions in the superior court of Hartford, Conn., against each of the life insurance companies, joining Cramer, the Connecticut administrator, claiming equitable ownership of the policies and seeking a recovery thereon. In each of these actions a writ of attachment issued, commanding the sheriff to attach property of the defendant insurance company and of Charles W. Cramer as administrator, to the value of the respective amounts due on the policies. Under these writs the sheriff garnisheed certain banks and made return that the banks disclosed that they were indebted to the insurance companies. He also made return that he had searched for but could find no funds of the defendant Cramer.

At this stage of the proceedings, on December 14, 1935, each insurance company filed its bill of interpleader in the court below, naming as claimants Lafferty, the Iowa administrator, Cramer, the Connecticut administrator, Grace K. Hugh, Mary E. King, and James S. Coburn. The amount alleged to be due on each policy was deposited in the registry of the court, and the court by its order required each claimant to appear and answer and set forth his claim to the fund. The defendant Coburn was enjoined and restrained until the further order of the court from further prosecuting his action in the superior court of Hartford, Conn., against the insurer, and he and the other claimants were enjoined from instituting or prosecuting against it any other suit or proceedings in any state or federal court on account of the policies of insurance involved. The claimants were required to show cause why the order of injunction should not be made permanent.

All of the claimants appeared and answered. Lafferty, as administrator, alleged that he was entitled to the funds and denied the right of any of the other claimants thereto. Cramer, as administrator, alleged that he and Coburn were the only bona fide claimants to the fund and that as they were residents of Connecticut, the jurisdictional diversity of citizenship did not exist. He also alleged that he could not sue nor be sued as administrator in any other state than Connecticut, and that by reason of the actions pending in Connecticut the proceeds of the policies were within the custody of the superior court of Hartford, Conn., and that a lien had attached thereto by these judicial proceedings. Coburn's answer followed substantially that of Cramer. So far as objections to the jurisdiction of the court were concerned, he also alleged that the situs of the funds and the situs of the obligation to comply with the terms of the policies were in Connecticut and that an assignment to him by Grace K. Hugh and Mary E. King vested in him an equitable lien on the proceeds of the policies. Grace K. Hugh and Mary E. King disclaimed all interest in the funds and alleged that Cramer as administrator and Coburn were the only parties entitled thereto.

On May 18, 1936, a decree was entered, adjudging that Lafferty was entitled to the proceeds of the two policies, and on or about May 20, 1936, the clerk of the United States District Court paid the deposited funds over to Lafferty, the Iowa administrator.

On May 5, 1936, the district court of Scott county, Iowa, after hearing at which all interested parties were represented, entered an order adjudging that Dorothy Gwendolyn Hazeldine was the daughter and only heir of the deceased, Arthur E. Hazeldine.

On March 14, 1936, Coburn filed his claims as assignee of Grace K. Hugh and Mary E. King with the Iowa administrator, and the claims were allowed as general claims and approved and established by the district court of Scott county, Iowa as such. Coburn then filed objections and exceptions to the report of Lafferty as administrator, allowing the claims as general claims. The guardian for the minor daughter and Lafferty both filed pleadings denying the right of Coburn to the insurance proceeds. Coburn, Hugh, and King applied to this court for an order restraining Lafferty and the guardian from proceeding further in the state court. This application was denied. The cause was then tried in the Iowa court and a decree rendered adjudging that Coburn had no interest in the policies or their proceeds, but that Lafferty as administrator was entitled to hold the proceeds of the policies as trustee for the minor daughter and not as the general assets of the Hazeldine estate. Coburn's claims have since been allowed by the district court of Scott county, Iowa as general claims.

On this appeal appellants contend: (I) That the lower court was without jurisdiction (1) because the requisite diversity of citizenship between the parties did not exist, and (2) because Cramer as administrator under appointment by the Connecticut court, was not subject to process and could neither sue nor be sued outside of the state of Connecticut; (II) that Coburn by reason of attachment proceedings brought in the state of Connecticut, acquired a lien upon the proceeds of each of the insurance policies; (III) that the bill of interpleader filed by the Phœnix Mutual Life Insurance Company should have been dismissed because the amount of the insurance policy was $10,005.20, whereas the company paid into the registry of the court only $9,358.71, claiming to be entitled to the balance in repayment of a loan.

At the very threshold of the case we are confronted with a motion to dismiss the appeals interposed by the appellees on the grounds (1) that appellants' brief was not filed within the time required by the rules of this court; and (2) that the questions presented by the appeals have become moot. Appellants were three days late in the filing of their brief. The brief, however, was filed before any motion to dismiss was interposed. The slight delay has been fully and satisfactorily explained and was purely accidental so far as appellants were concerned, and in addition to this, no prejudice has been suffered by the appellees by reason of the slight delay. This ground for dismissal is wholly untenable and will be given no further consideration. The other ground for dismissal is bottomed on the fact that subsequently to the entry of the decrees below the proceeds of the life insurance policies deposited with the registry of the lower court, were paid to the Iowa administrator, and the district court of Scott county, Iowa, in a proceeding there pending, adjudged that Coburn had no interest in the policies nor the proceeds arising therefrom, but that Lafferty, as administrator, was entitled to the proceeds as trustee for the minor daughter of deceased. Generally speaking, appellate courts do not sit to give opinions on abstract questions, but only where an actual controversy exists between the parties at the time of the hearing. Missouri Public Service Co. v. City of Trenton (C.C. A. 8) 80 F.(2d) 520. But if the alleged moot question involves the merits, or the controversy has not ceased to exist, although its status may have been changed by appellee, or where only a part of the controversy has ceased to exist and other...