Lydick v. Fischer

• Decision Date: 29 June 1943
• Docket Number: No. 9671.,9671.
• Citation: 135 F.2d 983
• Parties: LYDICK v. FISCHER et al.
• Court: U.S. Court of Appeals — Fifth Circuit

135 F.2d 983 (1943)

LYDICK v. FISCHER et al.

No. 9671.

Circuit Court of Appeals, Fifth Circuit.

May 24, 1943.

Rehearing Denied June 29, 1943.

B. E. Godfrey and John M. Scott, both of Fort Worth, Tex., for appellant.

Ogden K. Shannon, of Fort Worth, Tex., Clayton F. Jennings, of Lansing, Mich., and John N. Hughes, Jr., and Willis J. O'Brien, both of Des Moines, Iowa, for appellees.

Before SIBLEY, HUTCHESON, and McCORD, Circuit Judges.

SIBLEY, Circuit Judge.

The questions necessary to be decided are 1. Is there a final judgment which this court has jurisdiction to review? 2. Was that judgment, given against appellant, correct? 3. Was the cause properly removed from the State Court to the District Court?

The case concerns the assets of American Life Insurance Company, a corporation of Michigan, which became insolvent, and whose affairs went into the hands of John G. Emery as Commissioner of Insurance of the State of Michigan on court proceedings filed April 12, 1938, he being appointed statutory receiver of all its assets on June 7, 1938. On June 17, 1938, the Insurance Commissioner of the State of Iowa was appointed temporary receiver of the assets deposited with him, largely loan notes secured by mortgages on land in Iowa and Texas, pledged for the security of policies issued in Iowa; and his successor as Commissioner, Charles R. Fischer, was appointed statutory receiver thereof on Oct. 28, 1939. On May 29, 1938, Thomas H. Miller, a citizen of Michigan, as holder of a policy having a cash surrender value, filed a creditors' bill for himself and others similarly situated in the State Court of Tarrant County, Texas, against American Life Insurance Company as an insolvent, praying for a receiver for and an administration of assets in the jurisdiction of the Court for the benefit of those entitled, and for judgment on his policy. Grover C. Spillers, a holder of a similar policy, intervened as a petitioner. On July 29, 1938, the Court, finding there were many policy holders in Texas and large assets there, and a necessity for a receivership notwithstanding the domiciliary receivership in Michigan, appointed Dan E. Lydick receiver "of the Texas estate of American Life Insurance Company and of all its Texas assets, real and personal, including choses in action, notes, bonds, deeds of trust, cash in all banks within the State of Texas and all other items of property, both real, personal or mixed, of any kind or character whatever situated within the State of Texas", with a general power to take possession, to collect and to bring suits, and hold the proceeds subject to the order of the Court. Judgment was also rendered in favor of Miller and Spiller on their policies. Lydick as receiver later filed a detailed report of the property he had taken charge of, including in it several millions of dollars of notes secured by Texas lands, but stating he did not have the notes and mortgages in his possession. These papers were in fact mostly in the hands of the Michigan and Iowa statutory receivers, who claimed title to them.

On September 28, 1939, Lydick as receiver, without any special authority from his Court, filed in the court of his appointment the petition here involved. It is entitled in the receivership cause, is addressed to the Court, recites his appointment as receiver and his taking possession of the assets and annexes his inventory "Marked Exhibit A, and hereto attached and made a part hereof for all purposes". It alleges that the Michigan and Iowa receivers each are claiming some character of right, title or interest in some or all of the assets described in Exhibit A; that it would be to the best interest of the estate and all persons at interest to have these claims defined and established by order of the Court. The prayer is for a citation against the Michigan and Iowa receivers, and in their official capacities as Commissioners of Insurance, requiring each to appear and assert whatever right, title or interests he claims, and that the petitioner be decreed to hold all the assets in his possession free of all such claims. The clerk thereupon issued citations as prayed, and they were personally served in Michigan and Iowa by a disinterested person pursuant to Articles 2037 and 2038, Revised Civil Statutes of Texas, relating to the service of nonresident defendants. The two defendants joined in a petition to remove the suit brought by Lydick as receiver, on the ground of diversity of citizenship with a sum of more than $3,000 involved. Thereupon the State court judge on Nov. 24, 1939, approved the tendered bond, ordered "the suit filed in this cause by Dan E. Lydick, Receiver, against Charles R. Fischer, Commissioner, and John G. Emery, Commissioner * * * to be removed to the District Court of the United States * * * and that all other proceedings of this Court be stayed". The district judge denied a motion to remand. The Michigan receiver then answered, claiming title as statutory successor to the American Life Insurance Company to all its assets. Fischer, the Iowa Receiver, appeared specially to plead that neither the State nor district court had acquired any jurisdiction over his person in Texas, and that specified notes and securities claimed by Lydick, Receiver, had, long before any of the receiverships and at all times since, been in the State of Iowa deposited with the...