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held not to apply to the rehabilitator, who, because of his statutory duties to
protect creditors, policyholders, and the insurer, does not stand precisely in
the shoes of the insolvent carrier. After reviewing Louisiana negotiable
instruments law and the Uniform Commercial Code as adopted in Louisiana,
the court applied a "subjective good faith" test to determine whether the
plaintiff note holder was a holder in due course of the note. Finding that
plaintiff was in good faith, the court granted the requested relief and denied
the injunction requested by the rehabilitator.
New York
G.C. Murphy Co. v. Reserve Ins. Co., 54 N.Y.2d 69, 444 N.Y.S.2d 592, 429 N.E.2d
111 (1981). The court held that the insurance code does not deal with how the
owner of a secured claim is to file that claim, but rather solely with the priority
of secured claims and whether its owner wishes either to surrender the
security and file the claim as a general creditor or proceed against the security
itself.
G.C. Murphy Co. v. Reserve Ins. Co., 101 Misc.2d 729, 421 N.Y.S.2d 1006 (1979).
The court held that the bond put up by the insurer as required by law, made
the insured the owner of a secured claim.
Hamberg v. Guaranteed Mortgage Co., of New York, 180 Misc. 276, 38 N.Y.S.2d
165 (1942). The court held that the term "secured creditor" as used in the
insurance code had a wider meaning than under the Federal Bankruptcy Law.
It is not limited only to those creditors who have corporate property as
security. It includes those who hold other security as well.
In re Empire State Surety Co., 115 Misc. 745, 190 N.Y.S. 209 (1920). The court
held that the insurance code was a restatement of the bankruptcy rule and
under this rule, secured creditors were allowed to prove the balance of their
claims above the value of their security. The insurance code was not a
statement of the "chancery rule", under which secured creditors were allowed
to prove their claims in full, without regard to their security.
In Re National Mortgage Corporation, 172 Misc. 419 15 N.Y.S.2d 545 (1939). A
motion by the secured creditor of an insolvent insurer was denied because it
was made after the final date fixed for the filing of claims. Then the creditor
made a motion to surrender the security to the insurance commissioner and to
be allowed the full amount of its claim without any deduction for security.
In re N.Y. Title & Mortgage Co., 160 Misc. 67, 289 N.Y.S. 771 (1936). The terms
"secured claimant" and "security" in the statute were not defined. Therefore,
it was up to the court to construe the words according to their commonly
understood meaning.
In re Southern Surety Co. of New York, 282 N.Y. 54, 24 N.E.2d 845, reargument
denied, 282 N.Y. 678, 26 N.E.2d 809 (1939). When a New York insurance
company deposited securities in Ohio with the insurance commissioner in trust
for the benefit of its policyholders, the court held that an Ohio policyholder
was a secured creditor and was therefore entitled to prove its claim for the
difference between the original debt and the amount realized from the Ohio
fund.
Oklahoma
Joplin Corp. v. State ex rel. Grimes, 570 P.2d 1161 (Okla. 1977). Where
delinquency proceedings against an insurer under the Uniform Insurers'
Liquidation Act were commenced by the insurance commissioner on April 4,
where a creditor took judgment against the insurer in Missouri on April 14,
where an order enjoining all persons from seeking or obtaining preferences or
attachments or other liens against the insurer was entered in Oklahoma on
April 16, and where the creditor's Missouri judgment was filed in Oklahoma on