Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1879-03-14
SOUTHERN LIFE INSURANCE co.
Judge Brown. of the United states
Court, Decides the Case In Favor or
the Creditors Ia Bankruptcy and
I'm Favor or the Assignee.

The following important decision by Judge
| Brown, Of the United States court, who
| heard the case in Memphis, was received
| yesterday from Detroit, Michigan The case
| involves the property formerly owned and
| occupied by the Carolina and Southern life
| insurance companies, on Madison street, and
| now occupied by the Memphis gashght com
pany. Judge Brown decides against the
| creditor who levied on the property before the
insurance company went into bankruptcy,
| and gives Judgment in favor of the assignee
| in bankruptcy and all creditors claiming
under him. The amount involved is some
| fifteen thousand dollars:
In the district court of the United States for the
western district OF Tennessee. In bankruptcy
Martha E. Owen u.s. Oscar woodbridge assignee of
the Southern Life Insurance company.
On petition of Mrs. Owen for an order
recognizing and establishing Judgment lien
upon certain real property in the city of
Memphis.
The facts of the case are substantially as
| follows: The Carolina and Southern life in
| surance companies had been, for several
years prior to 1873, engaged in a general life
insurance business under charters from the
State of Tennessee, with their home offices
in the city of Memphis. On April Is, 1873,
the Carolina borrowed OF Hill, Bruce, Will
kins and Fizer the sum OF ten thousand dol
lars, for the payment OF which note was
| given, secured by a trust deed upon the prop
ert, in question. The deed was signed by the
president and secretary without the corporate
seal.
On July 26th five thousand dollars was paid
on this note, as appears by an Endorsement
On the ninth Of August, 1873, the Carolina,
being then greatly embarrassed and wlthou
the means of paying its debts, transferred its
policies, and bills receivable, and other assets
to the Southern, under a contract between
the Two companies, 'for the purpose of rein
surfing the risks of the Carolina, for the pro-
lection of the policy holders and creditors,
and for procuring the means to discharge the
Indebtedness of such company" The con-
tract further provided for the transfer t. the
Southern of all the balance Of the assets of
the Carolina, to be administered by IL in the
payment OF its liabilities. On August 18th
a warranty d. ed of the property in question,
in the usual form, was made by the Carolina
to the Southern, for the nominal considera
ton of twenty seven thousand dollars. The
deed made no reference to the previous con-
tract. From the twenty-seven thousand dol
lars was deducted FIVE thousand dollars due
upon the note, and levy of forty-two hun
dred dollars made upon the property. Both
of these membranes were subsequently
paid off. On December p, 1873 Hill, Bruce
and Fzer, having been paid their money by the
Southern life, transferred to it their interest
in the note and on March Is, 1874, Wilkins,
the remaining payee. also transferred his in
fled 4 creditors oil against the Carolina,
upon which an Injunction was issued, which
did not, however, forbid the petitioner from
obtaining judgment.
Petitioner had brought sait IN the State
court, and recovered judgment on December
%, 1875, for somewhat over ten thousand
dollars, but no execution was issued thereon
until January 90, 1876, the day after the in
ia ,ction in the kirkpatrick suit was dis
solved. On January 81, 1876, new levy
was made IN the property IN question, 10y
virtue of this execution, and upon the same
day petition in bankruptcy was filed by the
Southern life insurance company. On jan
uary 18th a bill was fled by one Nelson
against the Southern life, and an Injunction
granted against the plaintiff S execution, out
1t seems the execution was issued by the
clerk, and levied by the sheriff IN ignorance
of this injunction. On July 20, 1876, an or.
der was made by Judge Tugg, enjoining all
parties from proceeding to assert their liens,
and sublecting the property OF the bankrupt
to the payment of theirs debts without
leave of the court. On August 29th
an assignee was appointed, and on December
22d Mrs Oven filed Is petition, by leave Of
the court, to set up her lien, and prayed that
the same might be established.
BROWN, Judge.
Clark & Meux for petitioners.
Myers & Sneed for the assignee.
By the Code of Tennessee, section $3.50,
Judgments and DEGREES obtained in any
court of record in the State, in the county
whsre the debtor resides at the time of rem.
dition shall be lien upon the debtors land
from the time the same were rendered"
Section 1882. The lien thus given will be
lost unless an execution Is taken ont aud the
land sold within twelve months after the rem
dtion Of the ju igment or decree"
~''Ssc. 1888. If the sale within the
twelve months Is prevented by injunction,
writ of error, appeal IN the nature of a writ
of error, or other adverse proceedings in
court, the lien will be continued, provided
the creditor shall issue execution aud sell the
land within one year after the Injunction is
dissolved, the JudmeEt or decree affirmed, or
other adverse legal proceeding dismissed"
Sec. 1884. A Judgment or decree shall not
bind the equitable interest of the debtor in
real estate or other properly, unless within
sixty days from It's rendition memorandum
OF the Judgment or decree, stating the
amount and date thereof, with the names of
the parties, is registered in the registers Of
fee of the county where the re.il estate is
situated
''Sec. 1886. And il both cases the lien
shall cease unless q bill in equity to subject
said interest is fled within thirty days IRON
the return Of the execution uns atis6ed."
As the proceedings Ia this case were taken
under the FIRST three sections above quoted,
and upon the hypothesis that the Southern
life insurance company had a legal estate in
this property, the first question to be con-
sidered is whether IT took such estate under
its deed Of August rs, 1873. from the Caro-
lIDa, or whether it held the same simply as
trustee to the Carolina, to be administered
by 1t In the interest If the debts Of the graDior
The proceedings eliminating IN this trans
fer were somewhat informal and peculiar, but
it seems to me there can be no doubt of the
real intention Of the parties.
n Of no IF 1a
linas he'd August Z, 1879, a committee was
appointed, as appears by the minutes, ''for
the purpose OF reinSurlng the risks of the
Carolina, for the protection of the policy
holders and creditors, and for procuring the
me3ns to discharge the Indebtedness of said |
company; dad to effect these objects the COM |
mittee vas authorized to use and dispose of !
the assets and properties of the Carolina to
the full extent that might be found necessa- |
~" On August 18Th. the committee re-
ported the following proposition.
Nv e Will turn over cur entire policy list |
actually IN force, at SIX per cent. reserve on |
the actuary S tables, this reserve to be made |
up:
'First-In loans on policies in force.
'Second-Deferred premiums on policies in |
force, less The actual cost of collecting; and, |
"Ihlrd-Premlums In course of collection |
upon policies In force. If these !
assets fail TO equal the reserve at six per |
cent, the deficit TO oe made good out OF the |
bills receivable, and If surplus, the Southern |
life is to hold the amount to the credit of the |
Carolina; then we hand over to the Southern |
lite al the balance of our a ,sets, to be admin
iStered By it IN the payment Of Ot,. liabilities
not enie9.e rGted ADORE, after the payment of
which any balance remaining is to be paid |
over to our stockholders pro rata, in cash or
stock at par IN the Southern life, as each
sto knolder may elect"
This proposition, with a slight immaterial
was accepted by both companies,
and the secretary was instructed at meeting
held August 9lh. to turn over to the secretary
of the Southern life, all the assets and proper