UNITED STATES SUPREME COURT DECISIONS ON-LINE

Four children of S. H. P., deceased, recovered judgment in the Circuit Court of the United States for the Western District of Tennessee against a life insurance company, a corporation of New York, on a policy insuring the life of the deceased, to which judgment a writ of error was sued out, but citation issued against only one of the plaintiffs. On this the company gave a supersedeas bond securing the sureties by pledging or mortgaging some of its property. Proceedings were then taken in the courts of New York, under direction of the attorney general of that state, which resulted in the dissolution of that corporation and the appointment of a receiver of its property, who, by directions of the court, appeared in this Court and prosecuted the writ of error in order to release the property pledged. After sundry proceedings, the judgment of the circuit court was eventually reversed, and the case was remanded to the circuit court. A new trial was had there, but without summoning in the receiver, who did not appear, and judgment was again obtained against the company. This judgment was filed in the proceedings in New York as a claim against the assets of the company in the hands of the receiver, and the claim was disallowed by the highest court of that state. Held that the appearance of the receiver in this Court for the purpose of securing a reversal of the judgment below and the release of the mortgaged property gave to the circuit court in Tennessee no jurisdiction over the case after the dissolution of the corporation which could bind the property of the company in the hands of the receiver or prevent the receiver from showing that the judgment was invalid because rendered against a corporation which had at the time no existence and possessed no property against which the judgment could be enforced.

The Court stated the case as follows:

The facts out of which the present case arises, briefly stated, are as follows: on the 14th of July, 1870, the Knickerbocker Life Insurance Company of New York, for a stipulated annual premium of $364.60, issued a policy for the sum of $10,000 on the life of Samuel H. Pendleton, payable to the claimants on his death. By its terms, the failure to pay the annual premium on the days designated or to pay at clubjuris

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maturity any note, obligation, or indebtedness given for the premium rendered the policy void. The first premium was paid. The second premium, falling due on the 14th of July, 1871, was not paid. For it the assured drew two drafts on parties in New Orleans, and gave them to the agent of the company -- one a sight draft, for $44.50, which was paid; the other, for $325, payable three months after date, which was presented to the drawees for acceptance and afterwards, on its maturity, for payment, but it was neither accepted nor paid.

The assured having died, an action was brought in September, 1875, by the claimants -- his children -- upon the policy against the insurance company in a state court of Tennessee to recover the amount of the insurance. On motion of the company, the action was transferred to the Circuit Court of the United States for the Western District of Tennessee. The cause was there tried, and in May, 1881, a judgment was recovered by the claimants for $15,175. To review the judgment, a writ of error from the Supreme Court of the United States was sued out by the company, and a supersedeas bond given in the sum of $20,000. To secure the sureties on that bond, the company mortgaged certain of its property situated in Brooklyn, New York, to the amount of $15,000, and assigned to them a mortgage for $6,000 on property in Jersey City. Upon the writ of error, a citation was issued, but by some oversight or inadvertence both the writ and citation were directed to and served only upon one of the four defendants in error. While the cause was pending in the Supreme Court of the United States upon this writ of error, an action was brought in the Supreme Court of New York by the attorney general of the state in the name of the people of New York against the insurance company to dissolve the corporation and forfeit its corporate rights, privileges, and franchises, and on the 29th of December, 1882, a judgment to that effect was rendered, dissolving the company, and forfeiting its corporate privileges, rights, and franchises and appointing Charles H. Russell receiver of the property of the corporation. Soon afterwards, the receiver ascertained the pendency of the cause in the clubjuris

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Supreme Court of the United States, and also the execution of the supersedeas bond, the mortgage of the property of the insurance company in Brooklyn, and the assignment of the mortgage on property in Jersey City by way of indemnity of the sureties for their liability upon the bond. He reported the facts to the court whose officer he was, and obtained authority to employ counsel to argue the cause upon the hearing on the writ of error in the Supreme Court of the United States. Counsel was accordingly retained for that purpose, and argument was had by him in 1884, and in January, 1885, that court rendered judgment reversing the judgment of the circuit court and awarding a new trial. 112 U. S. 112 U.S. 696. But, according to its customary practice, it retained the mandate until its adjournment. While thus retained, the claimants filed a petition for reargument, which was sent to the counsel employed by the receiver. Before the petition was disposed of, it was discovered that the writ of error and citation were issued to only one of the four parties who were plaintiffs below, and the supreme court, of its own motion, entered an order requiring the party to the writ of error to show cause why the decision should not, for that reason, be vacated, and the writ of error dismissed. Thereupon the receiver, by petition stating to the court his ignorance, until that time, of the proceedings in question, applied for an amendment, reciting the encumbrance upon the property, and the mortgage made, and the assignment of another as indemnity to the sureties, and thereupon the court made an order amending the writ of error and citation so as to include the names of the other three claimants, but not otherwise changing the record as to parties, upon condition that the other claimants have their day in court by the allowance of a reargument. This condition was accepted by counsel on both sides, and the case was reargued, after which the judgment was again reversed and a new trial ordered, and a mandate was issued pursuant to the original decision. 115 U. S. 115 U.S. 339.

With the exception of securing counsel for the argument in the supreme court, the receiver took no part in the conduct of the defense in this cause, or in any subsequent proceedings, clubjuris

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beyond directing that the mandate of the supreme court, issued upon its judgment of reversal, be sent to the lower court. He did not exercise any other control over the action than as mentioned. The mandate was filed with the Clerk of the Circuit Court for the Western District of Tennessee in December, 1885, and in pursuance of it, the former judgment was set aside, and thereupon the case was entered on the calendar for a new trial. The receiver was not substituted as a party to the action, nor was he served with any process whatever, and on January 25, 1886, the claimants took judgment by default against the insurance company for the sum of $17,560.12. They then filed a certified copy of the judgment with the receiver, basing a claim upon it for its amount, to share to that extent in the funds of the dissolved corporation in the custody of the receiver. The claim was rejected by the receiver, but, by the direction of the court, was sent to a referee, to determine its validity, and he reported substantially the facts stated above, upon which he found that the judgment was without jurisdiction, so far as the assets under the control of the court were concerned; that it had no binding force except as against property discoverable in Tennessee; that the claim presented was not a legal charge, and was not entitled to a distributive share of the assets of the company. The report of the referee was confirmed by the supreme court at special term, but its order to that effect was reversed by the general term of the supreme court, and an order made that the receiver allow the claim as valid against the assets of the company and pay the same in due course of administration of his trust. From that order the receiver appealed to the court of appeals of the state, and that court reversed the order of the supreme court at general term, and confirmed the order of the supreme court at special term, 106 N.Y. 619. Its judgment having been remanded to the supreme court of the state, it was there entered, and from this judgment, thus entered, the cause is brought to this Court on writ of error. clubjuris

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