Court Opinion

ID: 6885366
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:27:05.882621+00
Date Added: 2024-06-11T16:05:42.121995
License: Public Domain

On Petition for Rehearing.
JOHNSEN, Circuit Judge.
A petition for rehearing has been filed by the Texas receiver, arguing that, by our decision, “the orderly administration of the insolvent company’s affairs in Texas has been inadvertently cast into chaos”.
Our opinion declares that, as a matter of Iowa law and policy, the securities deposited with the Iowa Insurance Commissioner, and in his possession, were charged with protective lien or trust rights in favor of the policyholders of the old Iowa company, and that, on June 17, 1938, legal title to these securities became vested in the State of Iowa, for the benefit of such policyholders, with the right, from that time on, in the Iowa Insurance Commissioner, in his official capacity or in his facilitating status as receiver, to receive and collect payments of interest, dividends and principal, as inherent incidents of his primary right of title and possession. Insofar as such property is capable of being ad*649ministered by the Iowa courts, the rights existing under Iowa law are clearly primary and independent, and, as we expressed it in our opinion, they are without “any subordinacy to the Michigan receivership here” or to “any one claiming ancillary or derivative rights, such as the Texas receiver, or the Indiana company which has made a reinsurance agreement with the Michigan receiver.”
Since we were assuming to define only the rights of the Iowa Commissioner under Iowa law, as they might be capable of enforcement in the Iowa courts—for which the District Court in this proceeding was in effect substituting—it did not seem necessary to us to point out, what is, of course, clearly settled by Clark v. Williard, 294 U.S. 211, 55 S.Ct. 356, 357, 79 L.Ed. 865, 98 A.L.R. 347, that, if the Iowa Commissioner, in his official capacity or in his facilitating status as receiver, found it necessary to resort to the courts of another state, he obviously would subject himself to the public policy of that state. “He must submit * * * to the mandate of the sovereignty that has the physical control of what he would reduce to his possession.” 294 U.S. at page 214, 55 S.Ct. at page 357. Such other state in turn, as a matter of full faith and credit, would be required to recognize the status and rights created by Iowa law, “with whatever rights and privileges accompany such recognition according to [its own] law”. 294 U.S. at page 215, 55 S.Ct. at page 358.
With this implication necessarily inhering in our original opinion, the petition for rehearing will be denied.