, 1874-03-10
The National Life Insurance Com
pany.
Arguments, on tho Motion for q Now
Trial.
The Cheney Case Gradually Drawing to
a Close.
bankruptcy acknowledgements.

caHs OF tho National Lilo Insurance Company,
Which had boon found guilty Of acts Of bank
fdptcy BY Jury Friday.
Tho tnain question turns on tho construction
pf tho following amendment to tho Bankruptcy
Act. which n1nonlulont was passed In April, 1879:
ID i enacted, etc., That whenever corporation.
carried wholly within tho State creating ho sa,o,
n sm also my ins,r"nce company 50 ereatsd whcther
corporation or cornrary before the eourta Of such
@ eef f Raos ddng s ia1s IT asses q
ra,nly among isa creditors ai lawfully among those
l aaust u such C. cororao er conpany % Ual n
der lilo bankrupt lava Of tho United statcs, my
ag1ecaly to tho stato law for o raalls istribuiion
payment Of my dyilo Of asacta to tto creditors
Of such corporation Or company while snch State Court
sha re,aa actually construetlvcly in possession
control Of tho asscs Of such corporation or company
s1 no sss yaa a Ii
Iscnling hgainst such corporation or company.
hFr. George 9. Campbell, for tho Company
contenAod tint This act Of Congress- was amend
atory. Of tic Bankruptcy act, aud contemplated
State ECoarts phnll not ho superseded by the
Bankruptcy Court. Congress- had right
TO ,paaa Bankrupt law, whIel.
should be exclusive IN i!s operatioae. bnt
1usolvont laws, prov ided they did not discharge
n dohtor, enact provisions dcrogatory tn tho
validity Of contracts, or conflict with the Banl1-
rurt ut, bet: i: .o t., ..,o ..., =. o,.
with tho bankrupt act, but, Oh the contrary
were expressly recognized by 1t. as the Bunk
rupt net expressly provided that no discharge
shonld ho issued to corporation, It was thore-
fore, i'll 10 far, IN 1usolyent act... Much trouble
had arisen M to tho right OF tho Bankruptcy
Court to stiporsedo tho proceedings in the State
Courts wAon Receivers Ind boon appointed, and
there woro q number Of decisions oaeh way.
A1nGrf0fNru Hcf troa ayfr1 npt1 1V Eon1 10
show that the Intention Of Congress was to malso
tho 1nsolveut laws auxiliary to tho Bankrupt
net, 30 fur as corporations wcro concerned. Tho
Stnto Courts Ind, therefore,, a concurrent juria-
dletion in regard to corporations, and tho law
was, in caues Of concurrent jurisdiction, tat tho
tribunal first acquiring Jurisdiction should retain
it. ;[t,a It. %as objected that tAe proceeding wss
1oh section of tho Act of March II,
visions Of tho uct should extend to ali
insurance companies heretofore organized, and
Int the state law Of 1872, OF corporations, tie
last clauso Of tho 25th section, allowed any cred
itor to file bill for the winlingup of the afrars
OF ~ insurance company. Thore was, therefore,
u tho present instance, q case Of concurrent
Jurisdiction, and tho State Court having first OBJ
taincd jurisdiction, should retain it.
hIr. Clark in reslating the motion. claimod and
argued that, in order to onnblo the Receiver Of
the Company to avail himself Of tho provisions
OF tue net OF Congress- Of Feb. 10, 1878, it must
appear TINT proceedings against said Company il
tho State Court ind boon duly commenced for the
purpose Of winding up ltH affairs and dividing
Its assota under some Inv Of the State Of 1linos,
nnd that the ordors made in the proceedings III
tue State Court had boon mado asreoably to
st,ch Stato law.
That the Iaw Of the State Of Illinois rolled upon,
and ulldor which tho proceedings were had in
tho Stnto Court resulting in tho appointment Of
The Rcceiyor. was the twcnty-thirl section Of
tho net Of the General Assembly Of the State Of
Illinois, approved March II. 1869. And TINT
HUT, being An net to incorporate nud to govern
hro, marine, and inland navigation insurance
companies doing business in tho state Of ILL
nois," Ind 10 application to this Company,
being life insurance company. The pro-
2eedingA in tho State Court wero not, therefore,
authorized by any law OF tho Stato Of Illinois,
nor was its order mndo ngrocably to State law,
and tho Company was not in position to ask
the construction of tho act Of Feb. 49, 1873.
But, oven assuming TINT tho proceedings had
beon duly commenced. and tho order made in
tho State Court agreeably to the State law, it
Of Congress- Of Fob. 13 1873, which IN any way
prevented the District Court from atliudicating
The Company bankrupt. The net itsolf cear-
y established tho right Of tho District Court to
Take Jurisdiction Of the nso!vent corporation or
insurance company, and to adjudieato it Q bnnIs-
supt, although proceedings had been commenced
agaibt it III tho Snto Court prior to the instltu-
ton Of proceedings undor tho Bankrupt laws of
tlio United statos. So far from tllero boiug any,
Thing in tile net OF Congress OF Fob. 10, 1878, to
deprive the District Court Of its jurisdiction
anJer the Bankrupt act, it expressly in terms
ai sff1a 5 aa of q bq mso sy
Court agrceably. to tho State law for tho
ra:ablo distribution or payment Of any diyi-
dend Of asaetb whilo tho Stnto Court should re-
nHin actually or constructiyoly in possession or
control of it's assets, should be doomed valid.
fn other words, TINT the Federal Court would,
it proper cure was mnde. adjndicato tho Com
pany BANKRUPT. without regard to previous
proceedings in tue State Court but, ut the same
time, 1t would allow and enforce, us Wild, any
order which should lnyo been luado by tho
state Court for tho payment Of q dividend ho-
fore tho District Court bud, by an adjudication
Of bankruptcy, become constrnctiyoly possessed
Or in control Of the assets OF tho bankrupt Com
pany.
Iii this caec, no order had boon made in tho
1t State Court for tho payment Of any dividend.
Tho order and decree of tho State Court set up
II the atswcr wore for tho appointment of the
Necciver, aud ordered md directed him to tuke
puaAesslon Of tl!e assets of tho Company, to
fDesoft fe omemsi o into IN money ana to qsroutc
al order as this wore contemplated by tho
yet, it would virtually deprlyo tho District
t;o',l.,', Conrt Of powcr oyor tho assets of tho
a orsr III Of t'a6uptsy o S|.e 1'ssso 1a if such
he dsomed Wild, and to bo held valid md en-
forced by lAe Bankrupt Court, tllon lilo Assignee
Of Tie Bankrupt Court, its officer, could hayo
he takcn, held, nnd distributed by tlio Rccoiyor.
This construction Of tho act would, in effect,
render idle and nugatory the e1prcHs provisions
IN the act itself, that tho District Court ailull
take juriEd,ction of tho Company in Bankruptcy.
although the stato Court might hayo previously
made order. III proceedings duly commenced bc.
fore it, Under the State law. But Mr., q. claimed
there WINS no difficulty in arriving at tho true
construction Of the act, and that was that, no
matter what orders might have been made by
the State Court prior to tho proceed
inyn in bankruptcy being commenced, tho Uniiol
Suites Cou,t would uoyertl1eosa nd judicato lho
Conil'anya bankrupt. il cause Of bankruptcy
were Shown, at was in this caso tho jury having
found it guilty OF the act of bankruptcy charged
iu the petition, and tho Court would upon such
adjudication proceed, as in atl other cARos, TO
tako pusAcsBion OF, coltrol, count, and distribute
lts ashotn under the Bankrupt aot, through its
own officer, an Assignee. but, in 10 dung, ii it
appeared that, prior to tho timo whom the asaots
OF such Company became constrnctiyely or
actually In tlle control Of the bankrupt Court,
had hna,,