Lothrop v. Stedman

42 Conn. 583
CourtSupreme Court of Connecticut
DecidedSeptember 15, 1875
StatusPublished
Cited by21 cases

This text of 42 Conn. 583 (Lothrop v. Stedman) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lothrop v. Stedman, 42 Conn. 583 (Colo. 1875).

Opinion

Shipman, J.

The American National Life & Trust Company was incorporated by the General Assembly of the State of Connecticut in the year 1866, under the name of the American National Life Insurance Company. (The eighth section of the charter is as follows: “ This resolution * * * may be altered, amended or repealed at the pleasure of the General Assembly.^

A statute of the state passed in 1871, relating in part to life insurance companies, and creating the office of insurance commissioner, provided in substance, that if it should appear to the commissioner from any report, valuation or examination of any life insurance company, that the assets of any such company incorporated by this state were less than its liabilities, the commissioner should, at his discretion, bring a petition to the proper court of probate, praying for the appointment of a trustee to take possession of the property [585]*585of such company for the benefit of its creditors; and, if it should appear that the assets were less in amount than three-fourths of the liabilities of such company, the act made it imperative upon the commissioner to bring such petition without delay.

On November 23d, 1874, the respondent, then and now insurance commissioner of this state, preferred his petition to the proper probate court, alleging that the result of an examination of the financial condition of the American National Life & Trust Company, and a valuation of its policies and assets, disclosed that the assets of the company were less than its liabilities, and less than three-fourths of its liabilities, and praying for the appointment of a trustee. After a full hearing, the probate court having called to its assistance a judge of the Superior Court, in pursuance of a statute of the state, found that “the allegation that such assets are less than three-fourths of the liabilities is untrue, that the allegation that the assets of said company are less than its liabilities is true, and the court further finds that the deficiency is not such that the prayer of the petition should be granted,” and dismissed the petition. The insurance commissioner presented to the General Assembly, at its May session, 1875, a special report upon the affairs of this company, and at the same session the legislature passed the following joint resolution:—

“Whereas the American Mutual Life ‘Insurance Company of New Haven has transferred its assets to the American National Life & Trust Company of New Haven, and has ceased business, said last-named company assuming the liabilities of said American Mutual Life Insurance Company; and whereas it appears from the report of the insurance commissioner relating to the affairs of said American National Life & Trust Company, that the liabilities of said company exceed its assets more than 1400,000; and whereas said company has neglected and refused to render to the insurance commissioner a report of its condition and affairs as required by law:—therefore,

Resolved by this Assembly, That the charter of said American Mutual Life Insurance Company and the charter of [586]*586said American National Life & Trust Company shall, on the 1st day of September, 1875, be and become wholly and absolutely repealed and annulled; Provided however, that if said American National Life & Trust Company shall, before said 1st day of September, 1875, supply the deficiency existing ■in its assets, and receive from the insurance commissioner a certificate showing that the assets of said company are sufficient to satisfy all outstanding and unpaid debts and claims, and to provide a full reinsurance reserve upon its policies in force, to be ascertained as now required by law, then the charter of said companies shall remain in full force, and shall not, by this resolution, be repealed or annulled; Provided further, if there shall be any disagreement between the insurance commissioner and said American National Life & Trust Company as to the amount of assets, their value and their sufficiency, the Chief Justice of the Supreme Court of Errors shall, upon the application of either the insurance commissioner or said company, designate one of the judges of the Superior Court to sit with him, and they shall fully hear the parties and determine the amount of such assets, their value and sufficiency, and their determination shall be conclusive; and they shall thereupon issue their certificate of the amount of the deficiency, if any, tó be paid in; and if said company shall, within thirty days after the delivery of said certificate to the secretary of said company, pay in the deficiency therein stated, this resolution shall become inoperative and void. The decision of said judges shall be made, and said certificate shall be delivered to said secretary, before November 1st, 1875. And provided further, that in case of a disagreement between the said company and the insurance commissioner as to the value or sufficiency of its assets, and said company does not supply the deficiency in its assets on or before the 1st day of September, 1875, the insurance commissioner shall then and thereupon, on said 1st day of September, 1875, take possession of all the assets, books and papers of said company, and hold the same subject to the order of said Chief Justice, and to be disposed of as provided by law.”

At the same session the legislature passed a statute in [587]*587regard to the disposition of the assets of life insurance companies upon the repeal of their charters, providing, in substance, that the title of the assets of any such corporation should vest absolutely, and in fee simple, in the insurance commissioner, who should hold and dispose of the same for the use and benefit of policy holders of such company, and such other persons as may be interested in such assets, and divide the avails in a specified order, and be subject to the direction and control of the Superior Court for the county within which the corporation should be situated.

The American National Life & Trust Company did not, prior to September 1st, 1875, supply to the satisfaction of the commissioner the alleged deficiency in its assets, and disagreed with that officer in regard to the amount, value and sufficiency thereof. He made preparations to take possession of the property of the company on September 1st, 1875, and prior to the investigation by the Chief Justice and his associate. The company thereafter brought a petition before the Superior Court for New Haven county, to enjoin the commissioner against his proposed action; a temporary ex parte injunction was granted, which was dissolved by Judge Beardsley, on motion of the insurance commissioner, and after a hearing of the parties, A temporary and ex parte injunction has also been granted by Judge Robinson, of the Court of Common Pleas, upon the petition of the insurance commissioner, to restrain the directors and executive officers of the company from disposing of its assets.

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Bluebook (online)
42 Conn. 583, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lothrop-v-stedman-conn-1875.