State, Ex Rel., v. Crabbe
| Decision Date | 13 April 1926 |
| Docket Number | 19245 |
| Citation | 151 N.E. 755,114 Ohio St. 504 |
| Parties | The State, Ex Rel. Haavind, Receiver, v. Crabbe, Atty. Genl., Et Al. |
| Court | Ohio Supreme Court |
Receivers - Ohio courts not bound to recognize foreign receiver, when - Deposits by foreign insurance company with state insurance superintendent - Alien receiver cannot apply for distribution of fund, when - Section 641, General Code - Mandamus does not lie to compel attorney general to institute action, when - Foreign receiver not "person entitled to participate" in such deposit.
1. The standing in Ohio courts of a receiver appointed by a court in a foreign country depends upon comity only. As a matter of strict right, the courts of this state are not bound to recognize a receiver appointed in a foreign country.
2. While upon considerations of judicial comity the courts of this state may recognize a receiver appointed in another country, judicial comity does not require Ohio courts to recognize an alien receiver applying under Section 641 General Code, for distribution of a fund which is held in this state for the benefit and security of the policyholders of an alien insurance corporation doing business within this state, no policyholder nor creditor having applied to
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Insurance 32 C. J. § 28 (Anno.).
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the Attorney General, under Section 641 General Code, to bring an action for distribution.
3. A writ of mandamus will not issue to compel the Attorney General of the state of Ohio to bring an action under Section 641, General Code, until after some person entitled to participate in the deposit in question, or the proceeds arising therefrom, has applied to the Attorney General for the commencement of a civil action under such statute. Until all valid claims of domestic policyholders and creditors have been settled under the statute, a receiver appointed in a foreign country is not a "person entitled to participate in such deposit, or the proceeds arising therefrom," within the purview of Section 641, General Code.
IN MANDAMUS. ON REHEARING.
This is an original action in this court seeking a peremptory writ of mandamus. The petition avers that the Norske-Lloyd Insurance Company, Limited, is a Norwegian corporation, with its principal office in Christiana, Norway, carrying on the business of fire and marine insurance; that the company was licensed to transact its business in the state of Ohio, and in conformity with Section 9565, General Code, it deposited with the superintendent of insurance a United States Third Liberty Loan bond of the denomination of $100,000, which has been placed by the superintendent of insurance in the custody of the treasurer of the state of Ohio.
The petition also alleges that on the 17th day of November, 1922, the company was adjudged ______________
Insurance, 32 C. J. §28 (Anno.); Mandamus, 38 C. J. § 50. ______________ bankrupt under the laws of the kingdom of Norway by the Christiana bankruptcy court, and that the relator is the duly qualified and acting receiver in bankruptcy appointed by such bankruptcy court.
The petition further alleges that there are policyholders of the company in the United States whose claims have not been fully paid, and that there are policyholders and other creditors residing outside of the United States, and that the claims of all of such policyholders and creditors exceed all of the assets and property deposited in the United States of America, including the deposit in Ohio.
The petition also alleges that the relator made an application in writing to the defendant, Crabbe, as Attorney General, to institute an action in the state of Ohio to determine the rights of all parties claiming an interest in the deposit, to subject the same to the payment and satisfaction of all liabilities, and to distribute such fund among the persons entitled thereto; that the defendant Attorney General has failed and declined to bring the action; and that the defendant Conn, as superintendent of insurance, has declined to consent that the action be brought.
The petition prays that a peremptory writ of mandamus issue commanding the defendant Charles Crabbe, as Attorney General, to bring an action on behalf of Harry L. Conn, as superintendent of insurance, and commanding Harry L. Conn, as superintendent of insurance, to consent to the bringing of the action, to determine the rights of the parties claiming an interest in the deposit made under the State Insurance Law, and to subject the same to the payment and satisfaction of all liabilities, and to distribute it among the parties entitled thereto.
The answer admits the formal allegations of the petition, and admits that the defendant Harry L. Conn, as superintendent of insurance, has declined to consent that the action in question be brought on his behalf. Every other allegation in the petition is denied.
The answer further avers that at the time the application to bring the action was made the Attorney General communicated that fact to the superintendent of insurance, who, in writing, requested that action be deferred, for the reason, among others, that another action is pending in the court of common pleas of Franklin county, Ohio, to which the relator is a party, involving the control, custody, right of possession and ownership of the funds in question, and that the defendant Harry L. Conn is a garnishee in the said action.
The answer further avers that the superintendent of insurance has offered to reinvest the funds in securities of the same general character if all interested parties request in writing that this be done. No reply was filed to this answer. Further facts are stated in the opinion.
Mr. B. W. Gearheart, Messrs. Bonynge & Barker and Messrs. Haight, Smith, Griffin & Deming, for relator.
Mr. Charles C. Crabbe, attorney general, and Mr. C. S. Younger, for defendants.
In this case an alien receiver is asking that the Attorney General be compelled by mandamus to institute an action under Section 641 of the General Code; the ultimate prayer of the petition being for distribution of the fund in the custody of the state treasurer. That is, the alien receiver wishes an action brought so that he may lay claim to the balance which may be left of the sum deposited with the superintendent of insurance for the benefit of all of the policyholders of the company doing business within this state, after payment of creditors and policyholders. The deposit in question was made under the terms of Section 9565, General Code, which reads:
The action sought on behalf of the receiver Haavind is demanded under the provisions of Section 641, General Code, which reads:
"If any company, corporation, or association required by law to make a deposit with the superintendent of insurance or other state officer, to secure the contracts of such company, corporation, or association, or for any other purpose, fails to pay any of its liabilities upon such contracts, or other obligations, according to the terms thereof after the liability thereon has been determined, or if such company, corporation, or association, having ceased to do business within this state, leaves unpaid any such liability or has become insolvent, the attorney general of the state, on behalf of the superintendent of insurance, or such other officer, and upon the application of any person entitled to participate in such deposit, or the proceeds arising therefrom, shall commence a civil action in the court of common pleas of Franklin county, making the company, corporation, or association, a party defendant, to determine the rights of all parties claiming any interest in such deposit, to subject the deposit to the payment or satisfaction of all liabilities and to distribute such fund among the persons entitled thereto."
We are of the opinion that the action cannot be maintained, first because the standing in Ohio courts of a receiver appointed by a court in a foreign country depends upon comity only, and judicial comity does not require Ohio courts to recognize an alien receiver applying under Section 641, General Code, for distribution of a fund which is held in this state for the benefit and security of the policyholders of a foreign insurance corporation doing business within this state. We also make this holding for the reason that a writ of mandamus will not issue to compel the Attorney General of the state of Ohio to bring an action under Section 641, General Code, until after some person entitled to participate in the deposit in question, or the proceeds arising therefrom, has applied to the Attorney General for the commencement of a civil action under such statute, and the receiver is not within the purview of the statute a person entitled to participate...
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State ex rel. Haavind v. Crabbe
...114 Ohio St. 504151 N.E. 755STATE ex rel. HAAVINDv.CRABBE, Atty. Gen., et al.No. 19245.Supreme Court of Ohio.April 13, Original mandamus by the State, on the relation of Thor Haavind, as receiver in bankruptcy of the Norske-Lloyd Insurance Company, Limited, against Charles C. Crabbe, as Att......