Davis v. Amra Grotto M. O. V. P. E. R.

• Decision Date: 13 January 1936
• Citation: 89 S.W.2d 754
• Court: Tennessee Supreme Court
• Parties: DAVIS v. AMRA GROTTO M. O. V. P. E. R., Inc., et al. (WARNER, Intervener).<SMALL><SUP>*</SUP></SMALL>

89 S.W.2d 754

DAVIS v. AMRA GROTTO M. O. V. P. E. R., Inc., et al. (WARNER, Intervener).^*

Supreme Court of Tennessee.

January 13, 1936.

Appeal from Chancery Court, Knox County; L. H. Carlock, Special Chancellor.

Suit by Mamie B. Davis, Hattie M. Gibbs, and others against Amra Grotto M. O. V. P. E. R., Inc., and others, wherein Charles T. Warner, superintendent of insurance of the state of Ohio, intervened. From the decree, the intervener and Hattie M. Gibbs separately appeal.

Decree modified and, as so modified, affirmed and cause remanded, with directions.

Poore, Testerman & Burnett, of Knoxville, for appellant.

A. E. Mitchell, W. C. Burton, and Lindsay, Young & Atkins, all of Knoxville, for appellee.

DAVIS, Special Judge.

This cause resolved itself into a general creditors' bill against the Union National Life Insurance Company, which was incorporated under the laws of Ohio, but had domesticated in Tennessee. The order sustaining the general creditors' bill was made June 30, 1933, and a fund of something over $8,000 in the hands of Amra Grotto, belonging to the insurance company, was impounded. On an agreed statement of facts, the chancellor made a final decree and order of distribution, after first dismissing the intervening petition of the superintendent of insurance of the state of Ohio.

Hon. Charles T. Warner, superintendent of insurance of Ohio, filed an intervening petition in the cause on December 27, 1934. In this petition, he alleges that he is the receiver of the Union National Life Insurance Company, having been appointed such receiver by the court of common pleas of Franklin county, Ohio; that the ancillary receiver appointed in the Knox county cause has in his hands the fund which was received from Amra Grotto; and that this fund should be paid to the intervener for distribution among the general creditors of said insurance company. The prayer of the petition is that this fund be paid to the intervener, and a decree entered that he is entitled thereto and to have the same delivered to him.

Under the stipulation of facts touching the matter, it is agreed that Amra Grotto is a fraternal corporation organized under the laws of Tennessee; that it had a contract of insurance for certain of its members with the Gem City Life Insurance Company, an Ohio corporation; that the Union National Life Insurance Company was successor to the Gem City Life Insurance Company, and succeeded to all the rights and liabilities of the latter; that the Union National Life Insurance Company, incorporated in Ohio, was duly qualified to do business in Tennessee; that on May 9, 1933, the Union National Life Insurance Company was adjudged insolvent in the court of common pleas of Franklin county, Ohio, and that petitioner was appointed as receiver thereof; that the fund on hand was collected by Amra Grotto from its members, as premiums due the Union National Life Insurance Company, which company has many creditors and policyholders in other states than Tennessee; that it is being wound up in said Ohio proceeding, which is in the nature of a general creditors' proceeding; that many local claimants have filed their claims in Ohio; and that the assets of the insurance company are insufficient to pay in full the claims against it.

This petition was heard January 30, 1935, and the acting chancellor dismissed it, the order reciting that the Ohio receiver did not have and possess extra territorial jurisdiction so as to enable him, under the facts presented, to maintain his petition. Said petitioner was denied an appeal at that time.

The final decree and order of disposition in the cause was made April 18, 1935. By this order, the chancellor directed that the fund on hand should be distributed first to resident creditors who have proven their claims, and the decree sets out the claims allowed. The Ohio receiver and superintendent of insurance excepted to this order, in its holding that "he is not entitled to have the entire fund in this cause, less costs, paid over to him," and was allowed an appeal, which he perfected. Through his assignments of error here, he insists that the court erred in decreeing that the fund should be distributed to Tennessee creditors first, the balance only to be paid to him; erred in refusing to decree that he is entitled to have the fund, less proper costs, paid over to him; and erred in failing to decree that the title to the fund was in him, as statutory liquidator of the Union National Life Insurance Company.

As to the first insistence, namely, that the court could not order the fund distributed to Tennessee creditors exclusively, it is sufficient to say that no foreign creditor is here making this question, and therefore the question is not presented for determination. The whole controversy, so far as the Ohio officer is concerned, is disposed of upon a consideration of his insistence that he is entitled to have the entire fund paid over to him, for distribution through the Ohio court proceedings.

There is some discussion in the briefs of the question of the right of a foreign receiver to maintain a suit in this state. But the Ohio receiver's petition was not treated as involving that question alone; it was dismissed upon the theory that the Tennessee court had the right to retain Tennessee assets for distribution according to local laws.

The Ohio receiver insists that he is successor to the title of all the assets of the Union National Life Insurance Company, and is a charter liquidator, or statutory liquidator, under Senate Bill No. 344 of the General Assembly of the state of Ohio, an act which was approved March 8, 1933, a copy of which is in the record. This act, in section 634-4 (Gen.Code), contains a provision that if an insurance company shall be ordered into liquidation, by proper order of the court, such liquidation shall be made under the direction of the superintendent of insurance, who shall be vested by operation of law with title to all the property of such corporation. But it is extremely doubtful if the order of the court of common pleas of Franklin county, Ohio, entered in the case of Charles T. Warner, superintendent of insurance of Ohio v. Union Central Life Insurance Company, No. 138518, in the Ohio court, a copy of which order is in the record as a part of the stipulation of facts, is sufficient in its terms to vest the superintendent of insurance of Ohio with title to the property of the insurance company. This order recites that the defendant, insurance company, is insolvent, and then proceeds as follows:

"It is therefore ordered by this Court that plaintiff, Charles T. Warner, Superintendent of Insurance of Ohio, be authorized, and he is hereby directed to take possession of the property, business and assets of the defendant company including all loans, bank deposits and other assets of whatsoever kind and nature and wheresoever situated, and conduct the business of such corporation,...