Rollo v. Andes Ins. Co.

• Decision Date: 16 July 1873
• Citation: 64 Va. 509
• Parties: ROLLO, assignee, v. ANDES INS. CO.
• Court: Virginia Supreme Court

64 Va. 509

ROLLO, assignee, v. ANDES INS. CO.

Supreme Court of Appeals of Virginia.

July 16, 1873

1. The Treasurer of the State, who holds bonds of a foreign Insurance Company, doing business in the State, under the act of February 3d, 1866, as amended by the act of March 3d 1871 is not liable to be summoned as garnishee by a foreign creditor of the Insurance Company.

2. A public officer of the State cannot be made liable by attachment at the suit of an individual, for funds in his hands clothed with a trust under the authority of a public law.

3. Under the act of February 3d, 1866, when a foreign insurance company shall cease to do business in the State, and its liabilities, fixed or contingent, to citizens of the State shall have been satisfied or terminated, the treasurer is authorized to deliver to such company the bonds and other securities deposited with him. Though the company has ceased business in the State, and its liabilities to citizens of the State have been satisfied or terminated, the bonds in the hands of the treasurer cannot be attached by a foreign creditor; but they must be delivered by the treasurer to the company.

This case was argued in Richmond, at the March term of the court and was decided at the June term, at Wytheville.

In October 1872 Wm. E. Rollo, assignee in bankruptcy of the Merchants Insurance Company of Chicago, in the State of Illinois, instituted an action of assumpsit in the Circuit court of the city of Richmond, against the Andes Insurance Company of Cincinnati, Ohio, laying his damages at $20,000. At the same time, upon affidavit filed, that the defendant was not a resident of this State, an attachment against the estate of the Andes Insurance Company was issued; and upon this attachment Joseph Mayo, treasurer of the State of Virginia, was summoned as a garnishee.

On the 5th of February, 1873, the Andes Insurance Company and Joseph Mayo, jr., treasurer, moved the court to abate the attachment. The company stated four grounds on which it based its motion; and the treasurer of the State relied upon the last two of these grounds; which are all that need be stated. They are:

3d. Because the commonwealth, its officers and its agents, are not subject to attachment process.

4th. The property of the defendant in the treasury of the commonwealth, is not liable to attachment at the suit of a non-resident of Virginia, but is there held in trust for the benefit of the home creditors of the defendant corporation and as to any residue after the satisfaction of these claims, in trust, to be returned and delivered up to said defendant.

It appeared that the Andes Insurance Company was created and located in Ohio; and having engaged in business in Virginia, the company had, in pursuance of the act of February 3d, 1866, deposited with the treasurer of the State $50,000 of the bonds of the United States.

In November 1872 an agent of the Andes Company came to Virginia, to settle up its business. In December he satisfied Mr. Mayo, the treasurer, that all claims for unearned premiums and losses against the company, due to residents of Virginia, had been satisfied, except one claim for $900, which the company did not consider valid, and were resisting. And thereupon, Mayo transferred to the agent all of the $50,000, except what he considered sufficient to satisfy this and another attachment which had been served on him, and to satisfy the said claim, if it should be sustained, and such contingent liabilities as might possibly arise before a full settlement. The amount reserved by him was two bonds of $10,000 each, and $600 in gold, which he had received for interest.

Upon the hearing of the motion, the court made an order abating the attachment. And thereupon, Rollo applied to this court for a writ of error; which was awarded.

Johnston, Williams & Boulware, for the appellant.

Jno. W. Daniel and Page & Maury, for the appellees.

STAPLES J.

By an act of the Legislature passed February 3d, 1866, amended by an act of March 3d, 1871, no insurance company which has not been incorporated under the laws of Virginia, can carry on its business within the State, until it shall have deposited with the treasurer of the State securities--State, corporate, or individual--of the cash value at least of ten thousand dollars.

If the securities so deposited are registered or individual bonds, the company is required, at the same time, to deliver to the treasurer a power of attorney, empowering the latter to transfer the bonds, when necessary, for the purpose of meeting any of the liabilites provided for in the act. It is also provided, that any foreign insurance company doing business in the State, may be sued in the courts of the commonwealth upon policies of insurance made to citizens or residents therein, in like manner as if such foreign insurance company had been incorporated by the General Assembly.

And by another provision of the act, it is declared that if such company shall cease to carry on business in this State, and its liabilities, fixed or contingent, to citizens of the State, shall have been satisfied or terminated, upon satisfactory evidence of this fact to the treasurer, he is authorized to deliver to such company the bonds and other securities deposited with him.

There are other provisions in the act, but it is not necessary to mention them, as they have no bearing upon the matters in controversy here.

The Andes Insurance Company, incorporated in the State of Ohio, under authority of this statute, deposited with the treasurer of this State, fifty thousand dollars of United States registered bonds, and until the occurrences hereinafter mentioned, has been carrying on the business of insurance in Virginia.

On the 29th of October 1872 the plaintiff in error, who is the assignee in bankruptcy of the Merchants Insurace Company of Chicago, sued out of the clerk's office of the Circuit court of the city of Richmond, an attachment against the Andes Insurance Company, upon a claim of about seven thousand dollars.

This attachment was served the 30th of October, 1872, upon Joseph Mayo, State treasurer, by delivering to him a copy, and summoning him to appear as garnishee at the next term of the Circuit court.

When the attachment came on to be heard, a motion to abate it was made on several grounds. This motion was sustained by the court; and the attachment was thereupon quashed. The case is before us upon a writ of error and supersedeas to that judgment. It is not deemed necessary to consider all of the grounds suggested for abating the attachment, as, in our view, one of them is decisive of the case.

It is important, in the first place, properly to understand the nature and effect of the process of garnishment. Garnishment is substantially a suit...