Commonwealth v. Guarantors' Finance Co.

Citations

• 35 Pa. Super. 547
• 1908 Pa. Super. LEXIS 81

Syllabus

<p>Insurance — Employer’s indemnity — Securities deposited with state— Rights of policy holders — Contract—Street railway.</p> <p>Mi insurance company engaged in business of insuring employers against liability for the negligent acts of their servants, became insolvent, and the securities deposited with the insurance commissioner for the protection of policy holders, were sold. A street railway company claimed a portion of the proceeds on the theory that it was in the position of a policy holder, although it did not produce or prove any policies. It was shown that at one time the insurance company had issued policies to the railway company, and had become liable for the payment of large sums under these policies. The railway company becoming dissatisfied with the arrangement with the insurance company entered into an agreement with the latter about two years before it went into the hands of a receiver, by which the railway company took over the management of its accident claims. A definite sum was fixed, as the amount due from the insurance company, and the latter gave its bond to the railway company secured by a large number of bonds and mortgages which it had in its treasury. It was provided that if the mortgages were not as warranted, and the insurance company did not within ten days after notice substitute cash or other satisfactory security, the liquidation of the liability should be null and void. The railway company held the mortgages and did not down to the date of the receivership make any complaint that any of them were unsatisfactory. Held, that the railway company was not in the position of a policy holder entitled to share in the fund for distribution, but was merely a general creditor.</p>