Sims v. Homeseekers Fire Ins. Co, 8783.

• Citation: 199 S.E. 69
• Decision Date: 04 October 1938
• Docket Number: No. 8783.,8783.
• Court: Supreme Court of West Virginia
• Parties: SIMS, Auditor. v. HOMESEEKERS FIRE INS. CO.

199 S.E. 69

SIMS, Auditor.
v.
HOMESEEKERS FIRE INS. CO.

No. 8783.

Supreme Court of Appeals of West Virginia.

Oct. 4, 1938.

[199 S.E. 69]Syllabus by the Court.

Attorney's fees and expenses incurred in resisting, on the part of a corporation, an application for the appointment of a special receiver therefor, or in seeking his discharge, may be paid out of funds in the hands of the receiver only where contracted for in the interest of the stockholders or creditors of the corporation affected, and in good faith on the part of those who employ counsel for the purposes mentioned. The payment of such fees and expenses in a particular case rests in the sound discretion of the trial court, upon the entire record of the cause in which payment is sought, and its ruling will not be disturbed unless there is a clear showing that such discretion has been abused.

Appeal from Circuit Court, Ohio County.

Suit by Edgar B. Sims, Auditor, against the Homeseekers Fire Insurance Company to secure the appointment of a special receiver for the insurance company, wherein E. L. Hogsett, an attorney, filed a petition for the allowance of attorney's fees and expenses out of the funds in hands of the special receiver. From an order denying the petition, the attorney appeals.

Affirmed.

William J. Gompers and Austin V. Wood, both of Wheeling, for appellant.

Hogsett & Smith, of Huntington, for appellee.

FOX, Judge.

In December, 1934, the insurance commissioner of this state caused an audit to be made of the affairs of the Homeseekers Fire Insurance Company, whose principal place of business was in Ohio County, and found a condition of affairs which, in his judgment, called for certain corrections. Joseph H. Reass was a director of and active in the management of the insurance company, as well as the Wheeling Savings & Loan Association and the Real Estate Finance Company, whose affairs were inextricably mixed with those of the insurance company, in that there were deposited with the loan association funds of the insurance company to the amount of approximately $116,000; and real estate loans were held by the finance company for the insurance company to a face amount of approximately $111,000, neither of which investments were liquid, and by reason whereof the insurant company did not, in the opinion of the insurance commissioner, have sufficient cash or liquid assets available to make certain the payment of its expected outstanding policy losses as they matured. In this situation certain demands were made by the insurance commissioner with respect to creating a liquid fund of $25,000 and the re-insurance of all new...