Harrison v. Mo. State Life Ins. Co.

• Decision Date: 16 June 1936
• Docket Number: Case Number: 25133
• Citation: 59 P.2d 774,177 Okla. 377,1936 OK 443
• Parties: HARRISON et al. v. MISSOURI STATE LIFE INSURANCE CO. et al.
• Court: Oklahoma Supreme Court

1936 OK 443

59 P.2d 774

177 Okla. 377

HARRISON et al. v. MISSOURI STATE LIFE INSURANCE CO. et al.

Case Number: 25133

Supreme Court of Oklahoma

Decided: June 16, 1936

Syllabus

¶0 APPEAL AND ERROR - Receivers - Discretion of Trial Court as to Appointment or Vacation of Appointment.

The appointment of a receiver or refusal to appoint, or motion to vacate prior appointment made without notice, is addressed to the sound legal discretion of the court, which must be veiwed from all the facts and circumstances presented by the record.

Appeal from District Court, Tulsa County; Thomas D. Lyons, Judge.

Action by George Harrison et al. against the Missouri State Life Insurance Company et al. From a judgment and order vacating appointment of receivers, the plaintiffs appeal. Affirmed.

Chas. L. Yancey, G.C. Spillers, Donald L. Brown, and E.M. Calkin, for plaintiffs in error.

Hulette F. Aby, William F. Tucker, and Frank Settle (Allen May, Albert A. Ridge, and Keaton, Wells, Johnston & Barnes, of counsel), for defendants in error.

WELCH, J.

¶1 This appeal presents for review the order of the trial court vacating the appointment of a receiver for the assets in Oklahoma of the defendant, Missouri State Life Insurance Company, a Missouri corporation. Upon the filing of the petition of the plaintiff, George Harrison, prior to service of summons and without notice, the trial court appointed the receiver. Thereafter the defendant company filed its motion to vacate the appointment of receiver. Pursuant to notice an extensive hearing was had, with oral testimony and documentary evidence, and the trial court vacated the appointment of the receiver. From that order the plaintiff prosecutes this appeal.

¶2 The essential facts are that the Missouri statutes provide, in substance, that whenever it appears to the Insurance Superintendent of Missouri that the capital stock or the guarantee fund of any insurance company is impaired or that the company is insolvent, such superintendent may institute suit in the circuit court of the county or city of the principal place of business of the company for dissolution, and that upon the rendition of judgment declaring the company insolvent, all the assets of such company vest in fee simple and absolutely in the Insurance Superintendent, who then holds and disposes of the assets for the use and benefit of the creditors and policyholders.

¶3 The defendant insurance company was in financial difficulties and the Missouri Insurance Superintendent, as authorized by statute, filed such a suit in the proper circuit court of Missouri, and that court entered its decree finding the defendant company to be insolvent within the legal meaning of insolvency as applied to the defendant and its business, and by such decree vested the assets of the defendant company in fee simple and absolutely in the Missouri Insurance Superintendent, directing him to take possession of the assets and all effects of the company and properly administer the same.

¶4 On the following day the plaintiff, George Harrison, commenced this action in the district court of Tulsa county to recover the cash value of his three insurance policies, and seeking receivership for his own benefit and the benefit of other creditors and policyholders in this state.

¶5 On the same day the district court of Tulsa county appointed receivers.

¶6 The Missouri Insurance Superintendent made a sale of the assets of the company to the General American Life Insurance Company, which latter company took over all of the business of the former company and assumed liability on all of the outstanding insurance policies in about 20 of the states of the Union; the sale and the contract setting out in minute detail the arrangements for the future handling of the insurance business, and the liabilities of the new company being approved by the proper court in Missouri.

¶7 There were several thousand policyholders in the state of Oklahoma, and property and assets in this state of the value of a great many thousand dollars. The receivers appointed by the trial court took charge of these assets and of the offices of the defendant insurance company in Oklahoma City and Tulsa, and proceeded to manage and conduct the business. A large number of policyholders in this state continued to make payment of premiums to the successor company, the General American Life Insurance Company, and all such payments were collected by the receivers. These collections in the brief period of the existence of the receivership amounted to many thousands of dollars.

¶8 Two policyholders in this state subsequently joined the plaintiff, George Harrison, in his action. The original petition did not disclose the amount of the cash surrender value of the policies held by the plaintiff, George Harrison, which sum he then sought to recover. An amended petition alleged that the plaintiff was the holder of three policies, and while not alleging the exact amount of the cash surrender value thereof, it alleged "that the cash surrender of such policies is now in the neighborhood of $100." The amended petition alleged that the cash surrender value of the policies held by the other two policyholders who joined therein was the aggregate sum of $189.

¶9 The receivers, while appointed and authorized to take charge of the assets of the defendant, Missouri State Life Insurance Company, were subsequently authorized by court order to receive all premium checks payable to the General American Life Insurance Company, and to indorse and collect the same and retain and hold the proceeds thereof. Thus policyholders who desired to carry on with the General American Company and preserve their insurance were prevented from paying their premiums into the General American Company, where such premiums would perform their proper function of providing proper reserve and the other functions essential to preserving in force the insurance policies.

¶10 Upon the hearing of the motion to vacate the appointment of the receiver it must have become apparent to the trial court that the situation created by the receivership was quite difficult, approaching an impossible or unjustified situation which was unnecessary...