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jurisdiction over the attorneys in so far as it sought to compel them to turn
over files. Thus, the insurer's remedy was to file in a Michigan court to have its
rights in the disputed files determined instead of relying on the liquidation
court order. The court did find the Magistrate's Order to be clearly erroneous
to the extent that it imposed any liens in favor of the attorneys since the
proper forum for the attorneys to present their claim is the Ohio liquidation
court.
Missouri
Bensinger v. Pacific States Life Ins. Co., 25 F. Supp. 295 (E.D. Mo. 1938). A
Colorado life insurance company was placed in liquidation in Colorado with
ancillary receivers appointed in Missouri and Illinois, with an Indiana claimant
as assignee of an Illinois claimant filing a claim in the Missouri ancillary
proceeding for the attachment of certain land in Missouri. In rejecting this
effort to attach Missouri assets, the court noted that liquidation of an insolvent
insurance company is designed to be prompt, fair and equitable so that the
closing of the estate is for the benefit of all creditors. This would appear to be
even more appropriate when the creditor is from Indiana attempting to take
preference over creditors residing in Missouri.
Fry v. Charter Oak Life Ins. Co., 31 F. 197 (Cir. Mo. 1887) and Weingarter v.
Charter Oak Life Ins. Co., 32 F. 314 (Cir. Mo. 1887). An insolvent mutual life
insurance company from Connecticut, licensed in Missouri, was insolvent and
the Connecticut insurance commissioner was appointed as liquidator. As a
result, Missouri policyholders were not permitted to attach Missouri property
in order to recover the reserve value of their life insurance policies.
McDonald v. Pacific States Life Ins. Co., 344 Mo. 1, 124 S.W.2d 1157 (1939). The
court held that the filing of a proof of claim in the domiciliary proceeding by
the claimant, bound the claimant to the decree entered in Colorado enjoining
all attachments and garnishment proceedings.
Strubinger v. Mid‐Union Indemnity Co., 352 S.W.2d 397 (Mo. App. 1961). In
upholding dismissal of a Missouri attorney's garnishment petition on assets of
an insolvent Illinois insurance company, the court reviewed the order of
rehabilitation which stayed all proceedings against the company, and
distinguished the case of Morris v. Jones, 329 U.S. 545. The Illinois order of
rehabilitation was entered prior to the institution of the attorney's
garnishment proceeding and the assertion of a lien resulting from the
successful recovery of a settlement on a subrogation claim belonging to the
insolvent insurer. It appears the attorney was retained by the insolvent insurer
prior to the rehabilitation order. The court held that the dismissal of the
garnishment proceeding was proper since the Illinois court's order had
enjoined and restrained people from pursuing the insolvent insurer and that
the attorney's claim would need to be presented in the liquidation proceeding
since the asset belonged to the Illinois rehabilitation and thus was not subject
to attachment or garnishment in Missouri.
Nebraska State ex rel. Sorenson v. State Bank of Omaha, 287 N.W. 762, 136 Neb. 880
(1939). The court held that the public policy of Nebraska did not permit a
judgment creditor to seize by garnishment dividends on deposits of an
insolvent New York insurance company with an insolvent Nebraska state bank,
after title thereto had vested in the liquidator of the insurance company by
virtue of the insurance laws of New York, in disregard of the liquidator's prior
demand for such funds for the benefit of all creditors and a previous order of a
Nebraska court to turn them over to the New York liquidator.
New Jersey
Matter of Mutual Benefit Life Insurance Co., 258 N.J. Super. 356 (App. Div.
1992). A New Jersey state court presiding over the Mutual Benefit Life
Insurance Company rehabilitation proceeding had the authority to enjoin out‐