Source: https://supreme.justia.com/cases/federal/us/299/152/
Timestamp: 2019-04-21 04:12:19+00:00

Document:
The Southern Surety Company, an insurance company organized under the laws of New York and doing business there and in other States, is being liquidated by the state superintendent of insurance. In the course of its business, the company acted as an insurance carrier for employers in relation to claims under the compensation laws of New York and other States. Upon his first report, the liquidator sought the direction of the state court to pay in full, as preferred under § 34 of the Workmen's Compensation Law of New York, all compensation claimants who had filed preferred claims under the New York law and whose claims the liquidator had allowed.
previously entered and directed the entry of a new judgment which, after a further amendment of the remittitur, was entered on April 1, 1936, and from which this appeal was taken within the time allowed by law.
It appears from the record that the business had its origin with the Southern Surety Company of Oklahoma, which was incorporated in that State in 1907; that the Oklahoma company took over the business of other companies in Missouri, Michigan, Indiana, and New Mexico; that, in 1918, the Southern Surety Company of Iowa was organized and took over the business of the Oklahoma company; that, in 1928, the Southern Surety Company of New York was incorporated, assuming the liabilities and receiving most of the assets of the Iowa company; that the business of the New York company grew rapidly, but that, in March, 1932, it was found to be insolvent, and the liquidator took charge.
"In this case, the New York assets are concededly more than sufficient for the payment of the preferences allowed. (See Clark v. Williard, 294 U. S. 211.) We pass on no other situation."
"was sufficient to pay the New York compensation claims in full without resorting to any assets received by the liquidator thereafter from sources outside the New York,"
"but that the assets so taken over 'had been derived from the general conduct of the insurance business during the preceding years throughout the United States.'"
contends that, while the preference does not apply to assets from other States brought to New York after the liquidation proceeding was instituted, it does apply to all the assets, however derived, which were in the New York at the time of the liquidation order, aside from the statutory deposit held in trust for the policyholders under § 71 of the state insurance law.
The condensed statement in the record leaves doubt as to the determination of the state court upon points bearing upon the federal question which that court has decided in upholding the preference. It does not clearly appear whether the court has determined that, upon a segregation of assets, there would be sufficient assets derived from the business done within the New York to pay the preferred claims, or whether that preference is to be satisfied out of assets resulting from operations in other States. Nor does it appear whether assets derived from business in Minnesota will be sufficient to discharge appellants' claims.
court may be advised. See Gulf, C. & S.F. R. Co. v. Dennis, 224 U. S. 503, 224 U. S. 506-509; Watts, Watts & Co. v. Unione Austriaca, 248 U. S. 9, 248 U. S. 21; Dorchy v. Kansas, 264 U. S. 286, 264 U. S. 289; Missouri ex rel. Wabash R. Co. v. Public Service Comm'n, 273 U. S. 126, 273 U. S. 131; Patterson v. Alabama, 294 U. S. 600, 294 U. S. 607. To afford this opportunity, we vacate the judgment and remand the cause for further proceedings.

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