Source: https://supreme.justia.com/cases/federal/us/262/346/
Timestamp: 2019-04-24 20:42:47+00:00

Document:
Stockholders of a corporation equitably owning the stock of an insurance company brought suit against the two companies and their managers in the district court for the purpose of protecting the assets of the insurance company through a receiver, against mismanagement; other like stocltholders, and holders of annuity certificates issued by the insurance company intervening, proposed a plan for reorganizing that company which provided, inter alia, that holders of such annuity certificates should pay a stated amount on each certificate, surrender their certificates for cancellation, and receive stock of the insurance company in exchange, and that all who failed to avail themselves of this privilege within 20 days, should be barred and estopped from any claim against the company, and their certificates be deemed cancelled, etc. Held that, as to certificate holders who were not parties and did not appear in the suit, and against whom no relief was prayed, the attempt to bar their rights and cancel their certificates was plainly void, and that the contention that a judgment of a state court in so holding failed to give full faith and credit to the district court's decree, as required by the Constitution and acts of Congress, was frivolous. P. 262 U. S. 351.
Writ of error to review 291 Mo. 139 dismissed; certiorari denied.
Error to a judgment of the Supreme Court of Missouri affirming a judgment against the insurance company on annuity certificates issued by its predecessor.
This is an action brought by the defendant in error in the Circuit Court of Jackson county, Missouri, for money paid by his assignors for annuity certificates issued by the Great Western Life Insurance Company, the predecessor of plaintiff in error. Judgment for $47,463.90, with interest and costs, was affirmed in the state supreme court. That court allowed writ of error bringing the case here. A petition for writ of certiorari also has been presented. The federal question asserted is that the state court, in violation of the Constitution and acts of Congress defining the jurisdiction of federal courts, failed to give full faith and credit to certain provisions of a decree of the United States Circuit (now District) Court for the Western District of Missouri, set up in the answer, purporting to cancel and annul the annuity certificates. The defendant in error moves to dismiss the writ of error and opposes the granting of certiorari on the grounds, among others, that the United States court was without jurisdiction to decree the cancellation of the certificates assigned to defendant in error, and that the provisions of the decree relied on by plaintiff in error are void.
"F. M. Pearl and other stockholders of the Great Western Agency Company and other annuity certificate holders of the Great Western Life Insurance Company who are similarly situated, appearing by B. P. Waggoner and James W. Orr, . . ."
"Now, on this 27th day of August, 1908, . . . came on further to be heard the objections and exceptions of F. M. Pearl and other stockholders of the Great Western Agency Company and annuity certificate holders of the Great Western Life Insurance Company to the confirmation of the sale of the assets. . . . A. F. Sherman appearing for himself, and certain other annuity certificate holders, . . . and all parties being before the court and being heard, and the court being fully nformed and advised, it is considered, ordered, and decreed: . . . "
"barred and estopped from making any claim of any kind whatsoever against said life insurance company or officers or stockholder thereof, or against any assets of said company, and such annuity certificates will then and thereby be fully cancelled in law and in equity, and such annuity certificate holders will have no further rights, claims, or demands against said company, its officers, stockholders, assets, or property on account thereof."
". . . that the jurisdiction of this court is fully retained, extended, and continued from time to time until this cause is finally concluded over all subjects matter covered by any pleading now on file or that later on may be filed, and over all parties whose names are now on the record and such other party or parties as may later on be brought into court, or who may come into court by any pleading. And all such parties now to the record, including the said the Great Western Life Insurance Company, and all parties who may later on be made parties herein, shall be bound by such further orders and decrees as to the court may seem necessary and proper."
No further proceedings were had, and on November 29, 1912, an order was filed relinquishing jurisdiction and discontinuing the case.
against them by any party to the suit, and that the only relief sought by stockholders and annuity certificate holders, who proposed and supported the plan of rehabilitation, was to have the property returned to the insurance company upon payment of its debts. These findings are sustained by the evidence. The stockholders and certificate holders who did appear in that suit for the purpose of reorganizing the company had no authority or power to represent certificate holders who did not appear. There is nothing in the record to support the jurisdiction of the court of deal with or cancel the annuity certificates assigned to defendant in error. The assignors were denied a hearing upon the matters decre & against them.
Missouri Pacific R. Co. v. Clarendon Co., 257 U. S. 533; Piedmont Power & Light Co. v. Town of Graham, 253 U. S. 193; Toop v. Ulysses Land Co., 237 U. S. 580, 237 U. S. 583; Fay v. Crozier, 217 U. S. 455; Goodrich v. Ferris, 214 U. S. 71, 214 U. S. 79; Farrell v. O'Brien, 199 U. S. 89, 199 U. S. 100. See also decisions per curiam: Nesmith v. Ohio, 257 U.S. 622; Pueblo of Laguna v. Candelaria, 257 U.S. 623; Harvey v. Union Traction Co., 257 U.S. 624; Winehill & Rosenthal v. Louisiana, 258 U.S. 605; Hartford Life Insurance Co. v. Johnson, 258 U.S. 612; Lindsey v. Allen, 258 U.S. 613.
Cf. Reynolds v. Stockton, 140 U. S. 254, 140 U. S. 264; Equity Rules 47 and 48, in force in 1908.

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