U.S. v. Poe
| Decision Date | 21 February 1913 |
| Parties | UNITED STATES v. POE et al. |
| Court | Maryland Court of Appeals |
Appeal from Circuit Court of Baltimore City; Chas. W. Heuisler Judge.
Petition by Edwin W. Poe and others, receivers of the United Surety Company, against the United States of America. From an order denying a motion of ne recipiatur and refusing to permit defendant to answer the petition and from a preliminary order distributing assets, defendant appeals. Reversed and remanded for further proceedings.
John Philip Hill, of Baltimore, for appellant.
Joseph C. France and William L. Marbury, both of Baltimore, for appellees.
The present appeal is taken from a ruling of the circuit court of Baltimore city refusing a motion of ne recipiatur with respect to a petition presented by the receivers in this case and denying to the United States the opportunity to file an answer to such petition. There is also presented by the record for review in this court the order of the circuit court passed on the 10th of October, 1912, and which order is as follows:
The first of the orders appealed from does not come within any of the classes of orders from which an appeal is allowed to this court by the Code, and the matters included in the petition of the receivers, to which the motions referred to were filed, are entirely covered by the order of October 10th, also appealed from, and thus no discussion is necessary of the order denying the motion of ne recipiatur and refusing the opportunity to answer the petition. Stated in concise, untechnical terms, the effect of the order of October 10, 1912, above set forth, was to terminate all liability of the United Surety Company upon bonds issued by it as of the 13th day of January, 1913, and to exclude absolutely and for all time any claim which might thereafter arise, and to establish the 15th of February, 1913, as the date for filing all claims against the assets of the corporation in the hands of the receivers. The order, therefore, was in effect a preliminary order for the distribution of assets among creditors. The corporation never having been dissolved or adjudicated insolvent, the case presented is one for which this court has been referred by the diligence of counsel to no precedent, nor, so far as the court has been able to ascertain, does there a precedent exist for a case of this character. Any rule which may now be laid down must therefore be understood to be in the nature of a first impression under the facts and circumstances of this particular case, not necessarily binding upon it in a case arising under a different state of facts.
To avoid misapprehension, the facts as now presented to the court disclose the following situation: The United Surety Company is a corporation organized for the purpose of acting as surety upon bonds of various descriptions, such as public official bonds, bonds of executors and administrators, guardians, committees, trustees, and receivers, bonds to secure the issuance of attachments, injunctions, appeals, and others commonly designated as judicial bonds, bonds of contractors, for construction, maintenance, or the performance of work of various kinds. The business is in many respects similar to that conducted by insurance companies; but it is a character of insurance which has been in existence but a comparatively short time; most of the companies doing the business of this nature having been formed within 25 years. Companies formed for this kind of business have in some instances become insolvent or have been dissolved and their business wound up by the action or under the supervision of courts exercising an equity jurisdiction; but in this instance the corporation in question has not been dissolved, has not been decreed to be insolvent, and, while certain of the principles which are applied in the case of payment of or distribution among the creditors of insolvent corporations may be made applicable to the case of a corporation situate as is the United Surety Company, they cannot be so adapted or applied in their entirety.
The effect of a decree of dissolution or of an adjudication of insolvency is undoubtedly to determine the outstanding contracts of a company, operating between the company and its creditors, as does the death of an individual between himself and his creditors, and for the very manifest reason that there has been a judicial determination of the impossibility of the performance by the dissolved or insolvent corporation of its contracts and engagements. Union Trust Co. v. Belvedere Co., 105 Md. 529, 66 A. 450.
The order now appealed from in terms proposes the like cancellation, upon an absolute date named therein, of all existing obligations of the company. These obligations, from the nature and character of the business conducted by the corporation, are in some respects peculiar to corporations conducting a surety business. For purposes of illustration take a guardian's bond. The object and purpose of it...
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