Ellerbe v. Farmers' & Mechanics' Mut. Aid Ass'n

• Decision Date: 15 June 1891
• Parties: Ellerbe, Superintendent of Insurance Department, Appellant, v. The Farmers & Mechanics' Mutual Aid Association; Arnold et al., Intervenors
• Court: Missouri Supreme Court

16 S.W. 683

106 Mo. 13

Ellerbe, Superintendent of Insurance Department, Appellant, v. The Farmers & Mechanics' Mutual Aid Association; Arnold et al., Intervenors

Supreme Court of Missouri, First Division

June 15, 1891

Appeal from St. Louis City Circuit Court. -- Hon. L. B. Valliant Judge.

Reversed and remanded.

Huff & Hereford for appellants.

(1) The claim should share pro rata with other claims. R. S. 1889 sec. 5948; Relfe v. Baker, 13 Mo.App. 184; 2 Perry on Trusts [3 Ed.] sec. 841; Carr v. Ins. Co., 33 Mo.App. 291. (2) In any event the amount in the hands of the superintendent as a trust fund should be exempted from any claim of intervenors, and should be used only as is pointed out in the section of the statute under which the said fund came into his hands. R. S., sec. 5934.

George S. Grover and H. F. Simrall for respondents.

Respondents' priority in equity arises out of the contract of insurance and, therefore, impressed the funds in the receiver's hands with a trust which can only be discharged by the payment of respondents' claim in full. 1 Story on Equity Jurisprudence [13 Ed.] sec. 1231, p. 577; Pinch v. Anthony, 8 Allen (Mass.) 536; 1 Jones on Liens, sec. 37, p. 25; People v. Bank, 39 Hun (N. Y.) 187; VanAlen v. Bank, 52 N.Y. 1; People v. Bank, 96 N.Y. 32; McLeod v. Evans, 66 Wis. 401; Peak v. Ellicott, 30 Kansas, 156; St. Louis v. Johnson, 5 Dillon, 241; Blaine v. Bourne, 11 R. I. 119; s. c., 23 Am. Rep. 429; Schiernberg v. Stephens, 32 Mo.App. 314; Hammerstein v. Parsons, 38 Mo.App. 332; Bank v. Hummel, 23 P. 986.

OPINION

Black, J.

The general question in this case is whether the intervenors are entitled to a priority of payment of a death loss. The following are the material facts:

In 1887, the National Association of Farmers & Mechanics' Mutual Aid Association, an insurance company doing business on the assessment plan, was reincorporated under the act of March 30, 1887, by the name of the Farmers & Mechanics' Mutual Aid Association. In October, 1889, the company was adjudged insolvent, and its property vested in the superintendent of insurance. At the same time the circuit court appointed a commissioner to receive, and decide upon, all claims against the dissolved and insolvent corporation. The widow and heirs of Alfred M. Arnold filed their petition in the cause, asking that the death loss due to them on account of certificate number 23380 be paid in full, as a preferred claim. This intervening petition was referred to the commissioner to hear, and decide upon, the claim.

The bill of exceptions states that there were presented to the commissioner for allowance claims for death losses accrued before the dissolution of the company, amounting to $ 105,031; that the commissioner made a special report as to the Arnold claim, which is set out in full. This report shows that the old association issued to Mr. Arnold on the thirty-first of December, 1883, benefit certificate number 23380 for $ 1,500 payable to his widow and children; that he died the fourteenth of September, 1888, and proof of death was duly made in the following March; "that on or about March 15, 1889, the association levied assessment numbered 77 upon the members of said association for the purpose of raising money to pay the sum of $ 1,500 named in said beneficiary certificate number 23380, and during March and succeeding months in 1889 collected an amount in excess of $ 1,500 upon said assessment, and put the same into the funds of said company at its bank, said amount having been distributed by said corporation to its several funds as follows, to-wit: Whole amount collected on assessment number 77 (as nearly as can be ascertained), $ 4,293; beneficiary fund, $ 3,004.40; reserve fund, $ 214.60; general fund, $ 1,073. Said defendant paid sums for death losses accruing subsequent to the death of said Arnold, for which no assessment had been levied or collected. Said claim number 23380 is the oldest death claim existing against said company for which an assessment was ever levied or collected, there being a claim due on the death of one Vincent, who died before said Arnold, but said corporation never levied a special assessment to pay the claim of said Vincent, it being the intention of said company to pay said claim out of the emergency fund of said company."

When the superintendent took possession the company had on hand $ 1,231.83 deposited in the bank as a general deposit to the credit of the association. This money had not been, by the association, appropriated to the payment of the Arnold claim. The company also had in the hands of the superintendent the sum of $ 5,500 previously deposited with and by him, held under the provisions of section 5864, Revised Statutes of 1889.

The policy or...