People ex rel. Jones v. Chicago Lloyds

Citation391 Ill. 492,63 N.E.2d 479
Decision Date19 November 1945
Docket NumberNo. 28664.,28664.
PartiesPEOPLE ex rel. JONES, Director of Insurance, v. CHICAGO LLOYDS et al.
CourtSupreme Court of Illinois

OPINION TEXT STARTS HERE

Appeal from Superior Court, Cook County; Ulysses S. Schwartz, judge.

Liquidation proceedings by the People, on the relation of Paul F. Jones, Director of Insurance, against the Chicago Lloyds and others. From an order disallowing the claim of Charles B. Morris in the liquidation proceedings and fixing the fees of the master to whom case was referred, Charles B. Morris appeals.

Affirmed.J. L. London and Ford W. Thompson, both of St. Louis, and Tannenbaum, Polikoff & Schmidt, of Chicago, for appellant.

Ferre C. Watkins and Glenn, Real & Browning, all of Chicago (Raymond G. Real and O. W. Barnes, both of Chicago, of counsel), for appellee.

GUNN, Justice.

The controversy in this case arises out of the disallowance of a claim of Charles B. Morris, appellant, by the Director of Insurance of Illinois, the liquidator of Chicago Lloyds, hereinafter referred to as ‘liquidator,’ appointed by the decree of the superior court of Cook county upon the petition of the Director of Insurance and the Attorney General of the State of Illinois.

As finally amended appellant's claim consists of a judgment rendered in the circuit court of the city of St. Louis, Missouri, against Chicago Lloyds, three years after the liquidator of Chicago Lloyds had been confirmed by the decree of the superior court. The claimant contended the full-faith-and-credit clause of the constitution of the United States, art. IV, sec. 1, and the acts of Congress enacted pursuant thereto, required that such judgment be recognized in the Illinois liquidation proceeding and allowed as a claim against the assets of Chicago Lloyds for the full amount of such judgment.

Appellant's claim involves a construction of the constitution of the United States, and authorizes a direct appeal to this court. Groome v. Freyn Engineering Co., 374 Ill. 113, 28 N.E.2d 274;VanDyke v. Illinois Commercial Men's Ass'n, 358 Ill. 458, 193 N.E. 490.

Many of the questions arising under this provision of the United States constitution have been so thoroughly settled that as to such questions an appeal to this court would not be entertained, because the question involved is no longer debatable, and we do not entertain appeals when the constitutional question is settled so as to be no longer debatable. First Nat. Bank v. Village of South Pekin, 371 Ill. 605, 21 N.E.2d 765;Dean v. Board of Education, 386 Ill. 156, 53 N.E.2d 875;Wilson v. Prochnow, 354 Ill. 98, 187 N.E. 914.

The question here presented, as set out in the report of the master, is as follows: ‘Had the liquidator of an insurance company, organized and doing business under the laws of Illinois, or the court appointing him, the right to pass upon the merits or the amount of a claim, arising out of a suit instituted in another forum before the appointment of the liquidator and consummated by a judgment of such foreign court after such appointment?’ This presents a new application of the full-faith-and-credit clause, which is still debatable, or at least questionable, and therefore is subject to review by this court on direct appeal from the superior court of Cook county. Atkins v. Atkins, 386 Ill. 345, 54 N.E.2d 488. Incidentally the question is also in the case under such clause of the constitution as to what effect the prior decree of the Illinois court, appointing a liquidator for Chicago Lloyds, has upon a subsequent judgment rendered in another State seeking satisfaction from the same assets. These questions, as presented, we believe have never been decided by the United States Supreme Court as the final arbitrator of such questions arising under the full-faith-and-credit clause.

The facts as applicable to the questions involved are comparatively simple. Chicago Lloyds, an unincorporated association recognized and authorized by the laws of Illinois to transact insurance business in Illinois, and in other States, upon compliance with the laws of such other States, obtained a license to transact business in the State of Missouri March 1, 1932, and continued to have such authority for some years thereafter. Associated Underwriters, Inc., was the attorney in fact for Chicago Lloyds in said State, and one Roessel was attorney for Chicago Lloyds, and its agent. The claimant, Charles B. Morris, became the agent handling such business in Missouri, under a contract. A dispute arose as to whether he had accounted for all premiums paid to him, which resulted in his being arrested upon the complaint of Roessel, charged with embezzlement, and was indicted, tried and acquitted.

August 24, 1934, Morris brought suit in the circuit court of the city of St.Louis against Chicago Lloyds, Associated Underwriters, Inc., and attorney Roessel, for malicious prosecution and false arrest. The cause was removed to the United States court, and afterwards, January 7, 1938, remanded to the circuit court of the city of St. Louis. February 9, 1938, the People of the State of Illinois, upon the relation of the Director of Insurance, filed in the superior court of Cook county a petition praying for the entry of an order finding sufficient cause existed for the liquidation of Chicago Lloyds, and on the same day a decree was entered adjudging and decreeing that the Director of Insurance take possession of its property, and liquidate the same in accordance with the Illinois Insurance Code. February 15, 1938, an order fixing the time and procedure for the filing of claims was made, requiring claims to be presented to the liquidator on or before November 15, 1938.

Before the liquidation proceeding Chicago Lloyds had questioned the jurisdiction of the circuit court of the city of St. Louis by a plea and demurrer which were overruled, and later filed an answer on the merits, as did also Associated Underwriters, Inc. After the order of the superior court of Cook county appointing a liquidator was entered, an injunction was issued restraining the claimant and others from prosecuting claims (of which claimant concedes he had notice), and counsel for Chicago Lloyds, upon the requirement of the liquidator, withdrew, and the St. Louis court was advised that the reason of such action was the liquidation proceedings in Illinois, with the consequent vesting of the title to all of the property and assets of Chicago Lloyds in the liquidator. Nevertheless, the claimant persisted in prosecuting his suit at law in the circuit court of the city of St. Louis, and April 7, 1941, such court entered a judgment in favor of the claimant against Chicago Lloyds and others in the amount of $50,000.

September 21, 1938, before obtaining judgment Morris filed his claim with the liquidator in the amount of $100,000, claiming damages for false imprisonment and malicious prosecution, and attached as an exhibit the complaint filed in the circuit court of the city of St. Louis. After he had obtained judgment he amended his claim by filing an exemplified copy of the judgment rendered by the circuit court of the city of St. Louis. The amended claims shows it arose from the same state of facts as the original. The only evidence presented by claimant was the record of this judgment obtained in the circuit court of the city of St. Louis.

In disposing of the issues presented and argued in this case it is first necessary to examine the status, rights and title of the liquidator of the insolvent insurance company under the laws of the State of Illinois. Article XIII of ‘An Act to revise the law relating to insurance,’ referred to as the Insurance Code, Ill.Rev.Stat.1943, chap. 73, pars. 799 et seq., among otherthings provides for the liquidation of insolvent insurance companies. Section 188 of the Insurance Code, Ill.Rev.Stat.1943, chap 73, par. 800, specifies the grounds upon which the Director of Insurance and the Attorney General may petition a circuit or superior court for an order to show cause why an insurance company should not be liquidated. Section 189 (par. 801) of the Insurance Code provides the court may issue an injunction to protect the assets of such insolvent company. Section 190 (par. 802) provides, upon full hearing, the court may enter an order either to dismiss the proceeding, or find cause exists, and order the Director of Insurance to take possession of the property, business, assets, and affairs of said insolvent insurance company, and liquidate them according to law. Section 191 (par. 803) provides that the Director, as liquidator, is vested by law with title to the property, contracts and rights of such insolvent insurance company, as of the date of the order entered by the court. Section 193 (par. 805) fixes the duties of the liquidator. Section 194 (par. 806) provides that creditors, except those holding contingent claims, shall, unless otherwise ordered by the court, be fixed as of the date of the entry of the order directing liquidation. Section 208 (par. 820) directs the manner of fixing the time to file claims, after an order has been entered declaring the company insolvent. Section 209, subsection (3) (par. 821, subd. 3), provides how and under what conditions a contingent claim may be allowed, with a limitation that the claim must become absolute against the company on or before the last day fixed for filing the proofs.

Under the provisions of a prior law, Smith-Hurd Rev.St.1935, c. 73, s 498, Ill.Rev.Stat.1935, chap. 73, par. 105(4), which is almost identical with section 191, we have held that the title of a liquidator of an insolvent insurance company is different from that of a receiver in chancery, who is limited to the territorial jurisdiction of the court appointing him, but, on the contrary, vests in the liquidator the title to all of the property of an insolvent insurance company. People ex rel. Palmer v. Niehaus, 356 Ill. 104, 190 N.E. 349;...

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7 cases
  • Morris v. Jones
    • United States
    • U.S. Supreme Court
    • January 20, 1947
    ...Supreme Court against the contention that its allowance was required by the Full Faith and Credit Clause. People ex rel. Jones v. Chicago Lloyds, 391 Ill. 492, 63 N.E.2d 479. The case was brought here by appeal. We postponed the question of jurisdiction to the merits. 66 S.Ct. 979. Under th......
  • Strubinger v. Mid-Union Indem. Co.
    • United States
    • Missouri Court of Appeals
    • December 19, 1961
    ...Supreme Court against the contention that its allowance was required by the Full Faith and Credit Clause. People ex rel. Jones v. Chicago Lloyds, 391 Ill. 492, 63 N.E.2d 479.' (329 U.S. l. c. 547, 67 S.Ct. l. c. That this case does not sustain plaintiff's position and is of no aid to him ca......
  • People ex rel. Hammer v. Lumbermens Mut. Cas. Co. (In re Liquidation of Lumbermens Mut. Cas. Co.)
    • United States
    • United States Appellate Court of Illinois
    • June 1, 2018
    ...object of article XIII is to secure a ratable distribution of an insolvent insurance company's assets. People ex rel. Jones v. Chicago Lloyds , 391 Ill. 492, 498, 63 N.E.2d 479 (1945), rev'd on other grounds , Morris v. Jones , 329 U.S. 545, 67 S.Ct. 451, 91 L.Ed. 488 (1947). It was designe......
  • Liquidation of Prestige Cas. Co., Matter of, 1-94-2629
    • United States
    • United States Appellate Court of Illinois
    • November 30, 1995
    ...Article XIII of the Code is to insure a ratable distribution of an insolvent insurance company's assets. (People ex rel. Jones v. Chicago Lloyds (1945), 391 Ill. 492, 63 N.E.2d 479.) The Code details the Director's authority when acting as a liquidator for an insolvent insurance company: "t......
  • Request a trial to view additional results

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