Wilcox v. Continental Life Insurance

Beardsley, J. This is an action by complainant dated [474] the 22d day of August, 1887, to recover a sum due upon a policy of life insurance issued by the defendant company. The suit was commenced by attachment of the defendant’s property. John R. Buck and Loren A. Cooke, Esqrs., receivers of the defendant company, appeared and pleaded in abatement of the suit in substance as follows:—That upon the petition of the insurance commissioner of the state, dated November 30th, 1887, praying for the appointment of a receiver of the defendant company, and that its charter might be annulled, they were on the 23d day of December, 1887, appointed receivers of the company, and that on the same day its charter was annulled; and praying that the suit might be dismissed and the lien created by the attachment declared vacated and set aside. The plaintiff demurred to the plea upon the following grounds:— 1. The attachment made in this suit of the property of the defendant was made more than sixty days prior to the appointment of the receivers and the commencement of the proceedings under which they were appointed, and is there.fore a valid and subsisting lien against the receivers upon the attached propertj^, and to enforce said lien it may be necessary for the plaintiff to proceed to a judgment and execution in this action. 2. To dismiss this action for the reasons suggested by the receivers would deprive the plaintiff of the benefit of the lien which she has upon the propertj* attached herein. 3. The plaintiff has the right, notwithstanding the appointment of the receivers, to proceed to a judgment in this suit against the defendant, and to take out and levy an execution to satisfy the judgment on the property herein attached. 4. If the lien created by the attachment in this suit is still a subsisting lien upon the property as against the receivers, the plaintiff has the right to keep the lien alive and to enforce it by proceeding to a judgment and execution in this action, or by having the action continued until such time as [475] the receivers shall remove the lien by satisfying the plaintiff’s claim. The statute under which the proceeding referred to was instituted provides, in substance, that if it shall appear to the insurance commissioner that the assets of any life .insurance company are less than three fourths of its liabilities, he shall bring his petition to the Superior Court, if in session, and if not, to any judge of the Supreme Court of Errors, praying for the appointment of a receiver, and that the charter of the company may be annulled; and if it shall be found upon the hearing of such petition that the assets of the company are less than its liabilities, the court or judge may, and if it shall be found that the assets are less than three fourths of its liabilities, shall, appoint a receiver or receivers of the company, and annul the charter and decree the dissolution of the company. Gen Statutes, § 2869. In the present case a decree annulling the charter of the company was made by a judge of the Supreme Court of Errors. It will hardly be questioned that at common law “ the absolute and unqualified dissolution of a corporation by a decree'of forfeiture or legislative repeal extinguishes all debts to or from it, and puts an end to all its rights of action and property, and it can no longer sue or be sued or do any lawful act.” Such is the language of this court in the case of Pahquioque Bank v. Bethel Bank, 36 Conn., 334. But the plaintiff claims that the case is rescued from the operation of this rule, and survives the dissolution of the defendant corporation, by force of the following statute— “ Receivers of corporations appointed by judicial authority shall have * * * power in their own names, or in its name, to commence and prosecute suits for and on behalf of said corporation, to defend all suits brought against it or them * * * ; and to do .and execute in its name, or in their names as such receivers, all other acts or things which shall be necessary or proper in the execution of their trust, and shall have all the powers for any such purpose possessed by the corporation.” Gen. Statutes, § 1322. The plaintiff’s argument is, that this statute is a legislative recognition of the [476] capacity of the corporation to sue and be sued notwithstanding the decree of its dissolution, and therefore that to that extent it limits and modifies that decree. We do not think that this statute affords any foundation for the plaintiff’s claim. The act under which the proceedings against this corporation were instituted was passed in 1875. Prior to that time and while the statute which we have just quoted was in force, the only provision for the dissolution of corporations by judicial decree related solely to banks and insurance companies. That provision was that the Superior Court or a judge of the Supreme Court of Errors in vacation should, for certain specified causes, appoint a receiver or receivers of such companies, and might, at a subsequent term of the court, upon a full hearing of all the parties, annul the charter of the company. Rev. Statutes, 1875, p. 288. By the act of 1875, which is applicable to life insurance companies only, and under which the defendant company was proceeded against, the appointment of receivers and the dissolution of the corporation may be simultaneous, and were so in the present case, but the construction to be given to the statute in question was not thereby varied. There is no legal connection between the appointment of receivers and the dissolution of the corporation. The appointment of receivers does not affect the life of the company, nor the status of suits pending against it, nor liens acquired by attachment of its property, except that it is provided that in a certain event attachment liens upon the property of banks shall be dissolved upon the appointment of receivers. Gen. Statutes, § 1831. While a corporation exists, and is in the hands of a receiver, it is liable to.be sued, and the receiver is liable to be sued, both before and after its dissolution, upon claims made upon the assets in his hands. The authority given by the statute to the receiver to appear and answer in such cases, fully satisfies its language and apparent intent, leaving no occasion for an inference that it contemplated suits to be brought against a corporation after its dissolution. The provision in the same statute, giving the receiver an [477] election to sue and. do other acts in his own name or the name of the corporation, does not, so far as the right to sue in the name of the corporation is concerned, apply to those which have gone out of existence, and hence does not apply to this case. Doubtless the legislature might arbitrarily provide that a suit might be brought in the name of a defunct corporation or a deceased individual, but it is improbable that it would do so, especially in a case where no reason existed for such a provision. If it should do so, the corporation would not thereby be necessarily revived. But the object of the statute is apparent. Its language as before quoted is, the receiver “ shall have all the powers for any of said purposes possessed by said corporation.” A receiver of a corporation is not by virtue of his appointment invested with the legal title to its assets, and at common law must sue in its name during its existence. The whole intent of the statute manifestly is to enable the receiver to act in his own name in cases where but for it he must have acted in the name of the corporation. If the legislature had intended to provide for the survival of- actions pending against corporations at the time of their dissolution, they would have undoubtedly done so in positive and distinct terms. The fact stated as one of the grounds of demurrer to the plea, that the attachment lien was created more than sixty days before the commencement of the proceedings by the insurance commissioner, is immaterial. Judgment is advised for the defendant. In this opinion the other judges concurred.