The People v. Peoria Life Ins. Co. , 376 Ill. 517 ( 1941 )

I concur in the dissenting opinion of Mr. Justice Wilson, but, in addition, desire to point out that the majority opinion fails to dispose of the constitutional question raised in the briefs. The proceeding involved is dual in its nature. In the first instance it was for the appointment of a receiver under applicable statutory provisions of the State of Illinois. That matter was litigated and the appointment of a receiver confirmed. It then became the duty of the receiver to administer the property of the Peoria Life Insurance Company. This involved, among other things, the power to continue the insurance wholly or partially in force by reorganization or sale to another company, or a distribution of its assets among its creditors, or a combination of both. The plan finally evolved provided that the policyholders could elect to continue their policies in the Alliance Life Insurance Company on a basis proposed by the latter, or they could elect not to receive reduced insurance, but have a claim for paid-up value. And the plan also required creditors to file their claims by a given time with the receiver.

Appellants being agents, who, in addition to a part of the initial premium, were under a contract to receive commissions on premiums paid in future years, did file their claims with the receiver in proper time. The contracts of appellants, or at least some of them, contained provisions where, under certain contingencies, the receipt of future commissions became vested without further work or services upon the part of the agent, some of which, the record shows, were in that condition at the time the receiver was appointed. If there had been a sale of all of the assets of the Peoria Life Insurance Company the distribution thereof among the creditors would have presented slight difficulties. Here, however, a large majority of the policyholders elected to continue their insurance with the Alliance Life Insurance Company, and substantially all of the assets of the Peoria Life Insurance Company were made available under certain contract provisions for such purpose, and what was deemed sufficient to discharge other liabilities of the Peoria Life Insurance Company was retained by the receiver. The purchasing company and the receiver attempted to anticipate all possible claims, but provided that if the receiver should become liable for claims not anticipated, the Alliance Life Insurance Company would pay the receiver from a trust fund, which was to be kept intact until 1949.

Appellants claimed the Peoria Life Insurance Company owed them money for services rendered, and that, under several of the contracts, only the time of payment was deferred — not the right to payment. Appellees, on the other hand, contend that the termination of the agency contracts of the several appellants terminated all of their rights under such contracts. The claims of appellants, as amended, presented a suit for an accounting.

If any of appellants had performed under their agency contract all that they were required to perform to be entitled to the benefit of their payments, and such contingency had occurred before the appointment of a receiver, they would have a vested right to the amount agreed to be paid for the term specified, or its present value. (Lowell v. St. Louis Mutual Life Ins. Co.111 U.S. 264; Central Trust Co. v. Chicago Auditorium Assn.240 U.S. 581.) The insolvency of the insurance company would create an anticipatory breach of the agent's contract. (Kinnan v. Hurst Co.317 Ill. 251.) In Roehn v. Hurst, 178 U.S. 1, it was held that the anticipatory breach of an executory contract might properly be the subject matter for damages; and inPeople v. West Town State Bank, 373 Ill. 106, this court held that while future rent could not be collected from a property in the hands of a receiver, on the other hand, if the contract fixed a measure of damages for the breach of such lease the latter was recoverable from the receivership. In this case it appears that, at least as to some of appellants, contingencies had arisen which entitled them to payments from succeeding years' premiums without rendering any further services, which would make their claim one accrued at the date of the receivership, and subject to having its present value fixed in such proceeding. That is one of the objects sought in this proceeding, to ascertain whether these several appellants have claims which accrued prior to the appointment of a receiver, and which require an accounting to determine their relative priority and value compared with the distribution awarded other creditors.

The view of the majority seems to support the proposition that the termination of the appellants' rights to act as agents has terminated all of the rights they have accrued under such contracts. To this I cannot accede, as I believe to so hold would authorize the taking of property without due process of law in the class of cases above specified. I see no difficulty in retaining the Alliance Life Insurance Company in the case. They have agreed with the receiver that in case liabilities not anticipated accrue to the receiver that the latter will be reimbursed out of a fund which will ultimately go to the Alliance Life Insurance Company. To settle the controversy without a multiplicity of suits is one of the provinces of a court of equity.

I believe the cause should be reversed for the purpose of taking an accounting.