Scheufler v. Continental Life Ins. Co.

• Decision Date: 01 November 1943
• Docket Number: 38119,38120
• Parties: Edward L. Scheufler, Superintendent of the Insurance Department of the State of Missouri, C. E. Mottaz, I. C. Smith, Virginia Behnken, William H. Morgens, Continental Company, a Corporation, and Kansas City Life Insurance Company, a Corporation, Respondents, v. Continental Life Insurance Company, Defendant, Gustave J. Crecelius, Anna M. Crecelius, and Myrtle K. Crecelius, Appellants. Edward L. Scheufler, Superintendent of the Insurance Department of the State of Missouri, Gustave J. Crecelius, Anna M. Crecelius, and Myrtle K. Crecelius, and Kansas City Life Insurance Company, a Corporation, Respondents, v. Continental Life Insurance Company, Defendant, C. E. Mottaz, I. C. Smith, Virginia Behnken, William H. Morgens, and Continental Company, a Corporation, Appellants
• Court: Missouri Supreme Court

175 S.W.2d 836

351 Mo. 1139

Edward L. Scheufler, Superintendent of the Insurance Department of the State of Missouri, C. E. Mottaz, I. C. Smith, Virginia Behnken, William H. Morgens, Continental Company, a Corporation, and Kansas City Life Insurance Company, a Corporation, Respondents, v. Continental Life Insurance Company, Defendant, Gustave J. Crecelius, Anna M. Crecelius, and Myrtle K. Crecelius, Appellants.

Edward L. Scheufler, Superintendent of the Insurance Department of the State of Missouri, Gustave J. Crecelius, Anna M. Crecelius, and Myrtle K. Crecelius, and Kansas City Life Insurance Company, a Corporation, Respondents, v. Continental Life Insurance Company, Defendant, C. E. Mottaz, I. C. Smith, Virginia Behnken, William H. Morgens, and Continental Company, a Corporation, Appellants

Nos. 38119, 38120

Supreme Court of Missouri

November 1, 1943

Rehearing Denied December 6, 1943.

Appeal from Circuit Court of the City of St. Louis; Hon. Joseph J. Ward, Judge.

Reversed (with directions).

Wm H. Biggs and Ralph B. Graham, Jr., for Gustave J. Crecelius et al., appellants.

(1) A party claiming an interest in a fund involved in a pending suit may intervene to assert his claim to the fund. 21 C. J 342, sec. 339, R. S. 1939, sec. 972; Davis v. Austin, 156 S.W.2d 906; Monticello Building Corp. v. Monticello Inv. Co., 330 Mo. 1128, 52 S.W.2d 545. (2) Petitioners, Gustave J. Crecelius et al., have a right to intervene since this fund is a trust fund which petitioners claim, and petitioners have no other remedy. Life Assn. of America v. Rundle, 103 U.S. 222, 26 L.Ed. 327; 32 C. J. 1039, 1040; 12 Amer. Jur. 1197, sec. 1352; Hollins v. Brierfield Coal & Iron Co., 150 U.S. 371, 37 L.Ed. 1113. (3) A judgment which does not dispose of the cause, both as to the subject matter and the parties, but reserves or leaves some future question or direction for future determination, is not a final judgment. 33 C. J. 1061, sec. 18; Short v. Kidd, 197 S.W. 64; State v. Riley, 219 Mo. 667, 118 S.W. 647; State v. Klein, 140 Mo. 502, 41 S.W. 895.

Sebree, Shook & Gisler and Harry H. Kay for C. E. Mottaz et al., appellants.

(1) Respondent, Kansas City Life Insurance Company, not a party to the proceeding and not entitled to introduce evidence or otherwise participate therein. 39 Am. Jur. 928, sec. 55; 47 C. J. 96, sec. 189; Greenwood v. Burt, 202 N.W. 489. (2) Fund is a trust fund for distribution. Life Assn. of America v. Rundle, 103 U.S. 222, 26 L.Ed. 337; 13 Am. Jur. 1197-1199, sec. 1352; Hollins v. Brierfield Coal & Iron Co., 150 U.S. 371, 37 L.Ed. 1113; 32 C. J. 1039, sec. 100. (3) Petitioners are entitled to intervene as a matter of right. Monticello Building Corp. v. Monticello Inv. Co., 330 Mo. 1128, 52 S.W.2d 545; Davis v. Austin, 156 S.W.2d 903; 21 C. J. 343, secs. 342, 343, 345; Credits Commutation Co. v. United States, 177 U.S. 311, 44 L.Ed. 782; United States Trust Co. v. Chicago Terminal T. R. Co., 188 F. 292; Minot v. Mastin, 95 F. 734; Traven v. Dawson, 65 Mo.App. 93; 14 C. J. 880, sec. 1341. (4) By liquidation under the provisions of the insurance code, the claims of all creditors, including policyholders, have been fully discharged and satisfied. Secs. 5941-5949, R. S. 1929; McDonald v. Pacific States Life Ins. Co., 344 Mo. 1, 124 S.W.2d 1157; Aetna Ins. Co. v. O'Malley, 124 S.W.2d 1164; State ex rel. Mo. State Life Ins. Co. v. Hall, 330 Mo. 1107, 52 S.W.2d 174; O'Malley v. Prudential Cas. & Surety Co., 80 S.W.2d 896; Robertson v. Mo. State Life Ins. Co., 136 S.W.2d 362; Relf v. Rundle, supra; Holley v. General American Life Ins. Co., 101 F.2d 172; Padway v. Pacific Mut. Life Ins. Co., 42 F.Supp. 569; Secs. 5950, 5951, 5953 and 5954, R. S. 1929; Ex parte Amos, 114 So. 760; People ex rel. Palmer v. Acme Plate Glass Mut. Ins. Co., 10 N.E.2d 988; State ex rel. Bannister v. Cantley, 330 Mo. 943, 52 S.W.2d 397; Lester v. Wright, 93 S.E. 408; 19 C. J. S. 1088, sec. 1376; In re Peoria Life Ins. Co., 75 F.2d 777; Sec. 106, Art. II, Revised Bankruptcy Act of the United States, 11 U.S.C. A. 506; Sec. 4, Revised Bankruptcy Act of the United States, 11 U.S.C. A., Sec. 22; 7 C. J. 23; Commonwealth of Pennsylvania v. Williams, 294 U.S. 176, 79 L.Ed. 841, 55 S.Ct. 380; Penn Cas. Co. v. Commonwealth of Penn., 294 U.S. 189, 79 L.Ed. 850, 55 S.Ct. 386; Hammond v. Lyon Realty Co., 59 F.2d 592; International Shoe Co. v. Pinkus, 278 U.S. 261, 73 L.Ed. 318; 28 Am. Jur. 776; 7 C. J. 24; In re Salmon & Salmon, 143 F. 395; Stellwagen v. Clum, 245 U.S. 605, 62 L.Ed. 507; First Natl. Bank of Delta, Pa., v. Weaver, 296 F. 112; In re Union Guarantee & Mortgage Co., 75 F.2d 984; Carr, Supt., v. Union Mutual Fire Ins. Co., 28 Mo.App. 215; Green v. American Life & Accident Co., 112 S.W.2d 924; 32 C. J. 1039, secs. 101 and 102; Johnson v. American Life & Acc. Ins. Co., 145 S.W.2d 444; Daniel v. Layton, 75 F.2d 135; State ex rel. Wagner v. Farm & Home Savings & Loan Assn., 338 Mo. 313, 90 S.W.2d 93. (5) Decree of July 25, 1936, awarding balance of $ 225,000 to the Kansas City Life Insurance Company is not a final judgment. Boden v. Johnson, 224 Mo.App. 211, 23 S.W.2d 186; Jordan v. Telephone Co., 136 Mo.App. 192, 116 S.W. 432; State ex rel. v. Riley, 219 Mo. 667, 118 S.W. 647. (6) Court had no power to render judgment awarding balance of trust fund of $ 225,000 to respondent, Kansas City Life Insurance Company. 34 C. J., 937, sec. 1140; Raney et al. v. Home Ins. Co., 246 S.W. 57; Texas Empire Pipe Line Co. v. Stewart, 35 S.W.2d 627; Charles v. White, 214 Mo. 187, 112 S.W. 545, 21 L. R. A. (N. S.) 481, 127 Am. St. Rep. 674. (7) Distribution of said fund to the Kansas City Life Insurance Company would be without consideration and would constitute a mere gift. Decker v. St. Louis & S. Ry. Co., 92 Mo.App. 50; Hoover v. Mo. Pac. Ry. Co., 115 Mo. 77, 21 S.W. 1076; Green v. American Life & Acc. Ins. Co., supra. (8) Stockholders of a dissolved insolvent insurance corporation own its assets subject to the rights of creditors and are entitled to distribution of any remaining assets after the claims of creditors have been satisfied. Hollins v. Brierfield Coal & I. Co., supra; 8 C. J. S. 1837, sec. 870; 32 C. J. 1039, sec. 100; 13 Am. Jur. 1197, sec. 1352; Preston v. Jeffers, 200 S.W. 654; Coriell v. Morris White, Inc., 54 F.2d 255; 16 Fletcher Cyclopedia Corps., pp. 934-5.

Lawrence Presley and Preston Estep for Edward L. Scheufler, State Superintendent of Insurance, respondent.

(1) The Insurance Code was strictly followed by the Superintendent of the Insurance Department in respect to the dissolution and rehabilitation of Continental Life Insurance Company and the reinsurance of its business by the Kansas City Life Insurance Company. Secs. 5941, 5942, 5943, 5944, 5945, 5946, 5947, 5950, 5951, 5953, 5954, R. S. 1929; Secs. 6052, 6053, 6054, 6055, 6056, 6057, 6058, 6061, 6062, 6064, 6065, R. S. 1939. (2) The Two Hundred Twenty-five Thousand ($ 225,000) Dollar fund was transferred to the Kansas City Life Insurance Company, subject only to the payment of certain expenses, upon the order of the Court, and it was entirely proper for the Court to permit the Superintendent to withhold said fund for the payment of such expenses, and, after the payment of same, order the balance paid over to the Kansas City Life Insurance Company. Secs. 5951 and 5954, R. S. 1929 (now Secs. 6062 and 6065, R. S. 1939).

Stanley Bassett and Jos. R. Stewart for Kansas City Life Insurance Company, respondent.

(1) The order allowing the appeal is jurisdictional and the scope of appellate review is limited by the terms of the order entered below. Pence v. Kansas City Laundry Service Co., 332 Mo. 930, 59 S.W.2d 633; Allen v. Britton, 141 Mo 173, 42 S.W. 819; Peacock Productions, Inc., v. Paine, 221 Mo.App. 377, 289 S.W. 341. (2) No appeal was allowed from the order directing the Superintendent of Insurance to disburse funds to Kansas City Life Insurance Company and such judgment is not now before the court. Cases cited Point (1). (3) Kansas City Life Insurance Company became a party to the cause pending in the court below under the decrees of July 25, 1936, and, as such, its rights and interests in the proceedings must be fully recognized. Thomas v. Elliott, 215 Mo. 598, 114 S.W. 987; Rusk v. Thompson, 170 Mo.App. 76, 156 S.W. 64; State ex rel. v. Vories, 333 Mo. 197, 62 S.W.2d 457. (4) The decrees of July 25, 1936, are final and the stockholders are estopped thereby from any further action. The decrees entered contemporaneously must be considered together as comprising one final judgment. 34 C. J., sec. 794, p. 502, note 12 B; Schee v. Schee, 319 Mo. 542, 4 S.W.2d 760; Biedenstein v. Feltz, 156 S.W.2d 29; Hopkins v. Cofoid, 103 Ill.App. 167. (5) Even if viewed as a separate and distinct decree, the order adjudging the balance of the fund to Kansas City Life Insurance Company is a final judgment which cannot be vacated or amended. St. Louis v. Crow, 171 Mo. 272, 71 S.W. 132; Miller v. Connor, 177 Mo.App. 630, 160 S.W. 582; State ex rel. Maple v. Mulloy, 322 Mo. 281, 15 S.W.2d 809; Zappettini v. Buckles, 167 Cal. 27, 138 P. 696. (6) The stockholders are bound by their representation through the corporation and its chief stockholder in said proceeding. Davidson v. Davidson Real Estate & Inv. Co., 249 Mo. 474, 155 S.W. 1; Leahy v. Mercantile Trust Co., 296 Mo. 561, 247 S.W. 396; O'Malley v. Continental Life Ins. Co., 343 Mo. 382, 121 S.W.2d 834; 30 Am. Jur., p. 920, sec. 178; Crary v. Standard Inv. Co., 313 Mo. 448, 285 S.W. 459; State ex rel. v. Buckner, 207 Mo.App. 48, 229 S.W. 392; Johnson v. Lata, 84 Mo. 139. (7) Intervention cannot be allowed after the rendition of a final judgment. Morton v. Supreme Council of Royal League, 100 Mo.App. 76, 73 S.W. 259; Zeitinger v. Hargadine-McKittrick D.G. Co., 298 Mo. 461, 250 S.W. 913. (...