Ex parte Goodwyn

• Decision Date: 08 June 1933
• Docket Number: 6 Div. 381.
• Citation: 227 Ala. 173,149 So. 216
• Parties: Ex parte GOODWYN.
• Court: Alabama Supreme Court

149 So. 216

227 Ala. 173

Ex parte GOODWYN.

6 Div. 381.

Supreme Court of Alabama

June 8, 1933

Rehearing Denied June 22, 1933.

Original petition of R. T. Goodwyn, as ancillary receiver and liquidator of National Surety Company, and others, for writ of prohibition to Hon. Roger Snyder, as Judge of the Circuit Court of Jefferson County.

Writ denied; petition dismissed.

State treasurer, and not superintendent of insurance, is custodian and trustee of securities deposited with state treasurer by foreign surety company pursuant to statute, and superintendent's duties with reference thereto are purely statutory. Code 1923, §§ 2642, 2649.

This is an original application by R. T. Goodwyn, "as ancillary receiver and liquidator of National Surety Co., et als.," under appointment of the circuit court of Montgomery county, in equity, for the issuance of a writ of prohibition, or other appropriate writ, to restrain the circuit court of Jefferson county, sitting in equity, from further proceeding in a cause pending therein-a creditor's bill filed, on May 4, 1933, by Harold Harper in his own behalf and in behalf of all other creditors who may elect to join therein-against the Greyling Realty Corporation, a corporation organized and existing under the laws of the state of Delaware, "having an office and owning real estate and transacting business in the City of Birmingham, Jefferson County, Alabama, by and through its resident agents and employees"; Lewis Barber, an individual, denominated in the bill "as nominee or trustee of said corporation"; Mortgage Guarantee Company of America, a corporation duly organized and existing under the laws of the state of Delaware, qualified to do business in this state; Interstate Mortgage Company, a corporation organized and existing under the laws of the state of Texas and qualified to do business in this state; National Surety Company, a corporation organized under the laws of the state of New York, having its principal place of business in New York City, and qualified to engage in business in this state Manufacturers' Trust Company, trustee, a corporation and successor by merger with Chatham-Phoenix National Bank &amp Trust Company, organized and existing under the acts of Congress relating to the organization and operation of National Banks; McConnell-White-Terry Realty & Insurance Company, an Alabama corporation, with its principal office and place of business in the city of Birmingham; J. Warren Leach, a resident of the city of Birmingham; and S. H. Blan treasurer of the state of Alabama.

Upon the filing of the bill, the circuit court, on May 4, 1933, on motion of complainant, entered a decretal order, "That M. Ray Simpson and E. Crampton Harris are hereby appointed temporary receivers of the goods, assets, estate and properties of Respondents, Greyling Realty Corporation, Lewis Barber, Mortgage Guarantee Company of America, National Surety Company and Interstate Mortgage Company, located within the State of Alabama, upon the complainant's filing an indemnity bond in this cause in the amount of $250.00 to be approved by this Court, and upon said receiver so appointed filing receiver's bond as required by the statutes of the State of Alabama, and rules of court in such cases made and provided, said receiver's bond are [is] hereby fixed in the penal sum of $10,000.00. That said temporary receivers shall serve as such until ten o'clock in the forenoon, on the 3rd day of June 1933, at which time this court shall further hear and determine the issues and questions herein presented, and on which occasion any of the parties respondent who may feel aggrieved at this order shall have the privilege of filing appropriate pleadings seeking its dissolution." The other parties were enjoined from delivering over to any one except "the receivers herein appointed," any of the moneys, securities, properties, or lands in their possession or under their dominion or control, or "transferring any property from either to the other pending the further orders of this Court in the premises," etc.

The petition for the writ of prohibition, and the exhibits thereto attached, show that on the 1st day of May, 1933, an ex parte petition was filed by Charles C. Greer, as state superintendent of insurance, in the circuit court of Montgomery county, alleging that the National Surety Company, a corporation organized under the laws of the state of New York, and qualified to do a casualty and surety business in the state of Alabama, had theretofore on April 29, 1933, been declared insolvent by a judgment of the Supreme Court of said state of New York, held in and for the county of New York, and by said judgment it was "ordered, adjudged and decreed that the corporate charter of said National Surety Company be and is forfeited surrendered and annulled and that said Surety Company be duly dissolved; and Mr. George S. Van Shaick and his successors in office as Superintendent of Insurance of the State of New York was authorized and directed to take possession of the property and liquidate the business of said National Surety Company"; and petitioner avers that to the best of his knowledge and belief said National Surety Company is insolvent.

The petitioner further averred that in the year 1911, the said National Surety Company qualified to do business in Alabama, and in connection with its qualification deposited securities aggregating in face value $50,000, which are now in the hands of the state treasurer, and held by him as authorized by the statute, "for the protection of those people within the State of Alabama to whom the National Surety Company may have become indebted during the operation of its business within the State of Alabama, and there are other assets of the said National Surety Company in the State of Alabama the amount thereof being unknown to petitioner"; that "the laws of Alabama require that anyone securing a judgment against the National Surety Company may require the Superintendent of Insurance of Alabama, after thirty days, to sell sufficient securities to pay such judgment, if the same has not been paid by the company; that there are now pending suits against the National Surety Company in the various courts of Alabama, and petitioner has reason to believe that other claims will probably accrue largely increasing the amount that are now in suit. Petitioner says that for the protection of those having a cause of action against the said National Surety Company within the State of Alabama, and for the purpose of a fair and ratable distribution of the assets of said company in Alabama, that an ancillary receiver and liquidator for all the property of said company in Alabama be now appointed by this Court, with power to proceed with the collection of all the assets now in Alabama and heretofore belonging to the said National Surety Company."

The petitioner prayed for the appointment of a receiver, and for an order restraining further prosecution of any and all suits against the National Surety Company, and requiring such suits now pending and any to be hereafter brought in any Alabama court be only maintained if revived against "the receiver and liquidator appointed by this court, or otherwise, as may be directed by this court," etc. The petition concluding, "If petitioner is mistaken in this petition, then he asks for such other and different remedy or right as may seem fit to this court and the judges thereof."

The petition for the writ of prohibition alleges further that upon the presentation of said petition filed by the said Charles C. Greer, as superintendent of insurance, the circuit court of Montgomery county, on May 1, 1933, appointed the petitioner here as receiver, as prayed in said petition, requiring the receiver to execute a bond "in the sum of $50,000.00 conditioned and payable as required by law"; that petitioner here has complied with said order and duly qualified thereunder. That thereafter, on May 4, 1933, the second bill was filed in the circuit court of Jefferson county, and the proceedings had as hereinafter stated.

Subsequent to the filing of the application for the writ of prohibition and the granting of the rule nisi therein, directed to the circuit court of Jefferson county, Greer, as superintendent of insurance, by leave of the circuit court of Montgomery county, filed what is alleged to be "An Amended Bill of Complaint," making parties defendant thereto, National Surety Company, Mortgage Guarantee Company of America, Interstate Mortgage Company, and Greyling Realty Corporation.

On the same day, and before the filing of the alleged "Amended Bill of Complaint," the National Surety Company, though not a party to the then pending petition, voluntarily appeared and filed an answer to the ex parte petition of Greer, alleged its corporate existence under the laws of the state of New York, that it had qualified to transact business in Alabama by depositing securities with the state treasurer, and that the petitioner here had demanded said securities from the state treasurer; and attached to its answer a proceeding in the state of New York, filed at its instance and suggestion for its reorganization and rehabilitation on a plan of its own, which had been approved by the insurance commission of said state under subsection (l), § 401, of article 11 of the Insurance Law of said state (Consol. Laws, c. 28), providing, among other things, for the reorganization and rehabilitation of corporations engaged in the insurance business upon their consent "through a majority of its directors, stockholders, or members." Cahill's New York Consol. Laws, 1932 Supp.

In its said answer the surety company alleges: "That National Surety Company was not and has never been declared insolvent by said Supreme...