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the agent was under no obligation to refund the unearned premiums to the
policyholders, this action by the agent created no liability on the part of the
insurer to him. The court also held that the policyholders' claims for refund of
unearned premiums were general claims against the receivership, to be
adjusted along with other general creditors.
English Freight Co. v. Knox, 180 S.W.2d 633 (Tex. Civ. App. 1944) writ ref.
w.o.m. This was an action by the receiver of an insolvent casualty company to
recover against a policyholder for additional premiums and debts due on three
policies. The policies had been issued to the defendant as the sole proprietor
of a business prior to the incorporation of the business. The defendant denied
that the corporation had assumed the liabilities of the sole proprietorship. The
court found that there is presumption, in the absence of an express
undertaking, that the takeover of the assets of the predecessor also includes
the assumptions of its liabilities. The defendant was found liable to the
receiver for the amounts due on the earlier policies.
Guardian Consumer Finance Corp. v. Langdeau, 329 S.W.2d 926 (Tex. Civ. App.
1959). Receiver of insurer filed suit against sixteen small loan corporations and
their parent and management organizations to recover commissions
amounting to 85% of the premiums charged on credit life, health and accident
insurance which named the various loan corporations as beneficiaries. The
court held that the receiver's powers exist only for the protection of claimants,
other creditors and policyholders and in this case the receiver needed to
recover no further funds in order to protect them. The retained commissions
were in compliance with the agreement between the insurer and the
corporations so they were not illegally retaining the commissions because the
code allows a corporation in the loan business to become a lender agent and
have an employee life insurance agent. Furthermore, if the retention of
commissions was unlawful, insurer could not recover the commissions because
the insurer's stockholders had approved the division of premiums, and the
receiver, who has no greater powers than the insurer cannot recover the
premiums either unless the receiver is acting as trustee to protect innocent
creditors of the insolvent corporation.
Knox v. Damascus Corporation, 200 S.W.2d 656 (Tex. Civ. App. 1947). When
the receiver sought to recover against policyholder on a balance due for
several workers' compensation policies, the defendant claimed that it had
been released by a compromise agreement regarding these policies. Several
policies were involved and the court found that the release in question only
covered policies issued in the name of Damascus Corporation. The corporation
earlier had been organized under another corporate name, and there was still
an outstanding liability for an advanced deposit due from that corporation.
The receiver only had authority to compromise claims with court approval. It
would have been an abuse of discretion for the receiver to have compromised
a claim which was neither bad nor doubtful. No harm was alleged by the
policyholder because it was contractually obligated pursuant to the
subscriber's agreement for an advance deposit to pay on all policies issued to
the corporation or its predecessor.
Langdeau v. Bouknight, 162 Tex. 42, 344, S.W.2d 435 (1961). The Texas
Supreme Court found the receiver entitled to all unearned premiums and
unearned commissions. The court also denied the award of attorney's fees
and found no error in receiving into evidence documents certified by the
receiver, and found that Art. 21.28 was not local or special legislation but a just
and reasonable classification in light of the situation of liquidation of insurance
companies confronting the legislature. At issue was an agents rights to
commissions and unearned premiums on cancelled policies and noted that the
Texas law prohibits allowance of claims based on obligations transferred