In re Lloyds of Texas
| Decision Date | 18 September 1930 |
| Docket Number | No. 2956.,2956. |
| Citation | 43 F.2d 383 |
| Parties | In re LLOYDS OF TEXAS. |
| Court | U.S. District Court — Panama Canal Zone |
Dexter Hamilton and McBride, O'Donnell & Hamilton, all of Dallas, Tex., for the motion.
H. A. Bateman and Burgess, Burgess, Chrestman & Brundidge, all of Dallas, Tex., opposed.
Under the terms of articles 5017, 5017e, statutes of Texas (Vernon's Ann. Civ. St.) insurance organizations operated under Lloyds plan are required to maintain certain assets and certain guaranteed funds; upon failure to make good any impairment the insurance commissioner is required to take charge of such assets, and, if possible, to effect reinsurance, and, in case reinsurance cannot be had, the affairs of such Lloyds shall be wound up through a receivership instituted by the board.
Sometime early in 1930 the insurance commissioner discovered that Lloyds of Texas did not have the requisite minimum assets and that there were certain irregularities in the conduct of its business. Statutory steps were taken for the restoration of the assets and the remedying of the irregularities. Neither having been accomplished, a statutory receivership was instituted in a state court under the authority of the same statute.
On the 15th day of August, 1930, and within four months of the receivership, an involuntary petition in bankruptcy was filed.
The receiver in the state court, and the board of insurance commissioners, now move to dismiss the petition on the ground that the alleged bankrupt is an insurance corporation.
The books contain many definitions of the word "corporation." Mr. Justice Story, in the Dartmouth College Case, 4 Wheat. 518, 667, 4 L. Ed. 629, said: "An aggregate corporation at common law is a collection of individuals united into one collective body, under a special name, and possessing certain immunities, privileges, and capacities in its collective character, which do not belong to the natural persons composing it." He then wrote of the great variety and mentioned spiritual and lay, and divided the latter into civil and eleemosynary. There is also a division of public and private. A New York case (Thomas v. Dakin, 22 Wend. N. Y. 71) wisely says that
Of course, only a sovereign authority can create a corporation. The body so created consists of one or more natural persons and is established for some specific purpose, and continued by a succession of members.
The sovereignty authorized the creation of the Lloyds; it provided for the transaction of business through an agent; that it might sue and be sued; that there would be a succession. These are marks of a corporation.
But, we need not wander in the wilderness of definitions in order to name the Lloyds — in order to discover its species.
For purposes of administration the national government may denominate certain associations as corporations. Burk-Waggoner Oil Association v. Hopkins, 269 U. S. 110, 46 S. Ct. 48, 70 L. Ed. 183. That seems to be what congress has done in the Bankruptcy Act.
Subdivision (b) of section 4 of that act (11 USCA § 22(b) provides: "Any natural person, except a wage earner or a person engaged chiefly in farming or the tillage of the soil, any unincorporated company, and any moneyed business, or commercial corporation, except a municipal, railroad, insurance, or banking corporation, owing debts to the amount of $1,000 or over, may be adjudged an involuntary bankrupt upon default or an impartial trial, and shall be subject to the provisions and entitled to the benefits of this title."
Section (1), meaning of words and phrases, subdivision (6), prior to May 27, 1926, read: "`Corporations' shall mean all bodies having any of the powers and privileges of private corporations not possessed by individuals or partnerships, and shall include limited or other partnership associations organized under laws making the capital subscribed alone responsible for the debts of the association." 30 Stat. 544, § 1.
On May 27, 1926, a comma was placed after the word "association" and the sentence then continued: "Joint stock companies, unincorporated companies and associations, and any business conducted by a trustee, or trustees, wherein beneficial interest or ownership is evidenced by certificate or other written instrument." 11 USCA § 1(6).
The present law, therefore, includes as corporations many companies and associations that were not and are not strictly corporations within the generally accepted definition of corporation.
Why was the territory enlarged? Why were "joint stock companies and unincorporated companies and...
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Crum & Forster, Inc. v. Monsanto Co.
...legal status that is more in the nature of corporate entities and should be regarded as insurance corporations, citing In re Lloyds of Texas, 43 F.2d 383 (N.D.Tex.1930). These points of error are Obligation or Duty The appellants also contend that Question 9 contains an incorrect statement ......
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