This case comes here on certiorari, 293 U.S. 547, 55 S.Ct. 126, 79 L.Ed. --, directed to the Supreme Court of Pennsylvania, to resolve questions of public importance growing out of the conflicting claims of the federal District Court and of the insurance commissioner of the commonwealth of Pennsylvania, to jurisdiction over the liquidation of the business and affairs of appellant, an insolvent Pennsylvania insurance corporation.
The case was heard in the state Supreme Court upon an agreed statement of facts, deemed 'necessary to a determination of the question involved in the appeal,' which was filed in the state trial court. It purports to outline the substance of proceedings had in that court and in the federal District Court. The question is stated to be whether the state court, 'in view of the prior pendency of the suit * * * in the Federal court, had jurisdiction to enter the decree from which this appeal is taken.' The records of the pleadings and proceedings in those courts are not included in the record and are not before us.
Appellant was organized under the Insurance Company Law of May 17, 1921, P.L. 682. On September 14, 1933, appellant's officers and directors appeared at a hearing before the insurance commissioner at which the president of the company was ordered to return to it assets which he had improperly withdrawn from the company, with consequent serious impairment of its financial condition. On October 14, 1933, a further hearing was held before the Attorney General of the state, at which it appeared that the company was in an unsafe and unsound condition.
On November 17, 1933, a shareholder of the insurance company filed his bill of complaint against the company in the District Court for Eastern Pennsylvania. At this time negotiations, conducted by the commissioner with the stockholders of the company, for its rehabilitation were pending. The complaint alleged that the stockholder was a resident of West Virginia; that the requisite jurisdictional amount was involved; that officers of the company had misappropriated and wasted its assets; that the company was involvent and in a financially unsafe and unsound condition. The bill prayed the appointment of receivers, the liquidation of its property and business, and the usual injunction. Upon the filing of the bill, subpoena was issued and was served on the corporation on November 22, 1933.
On December 8, 1933, while the suit in the District Court was pending, the Attorney General of the state, acting pursuant to section 502, art. 5, of the Insurance Department Act of May 17, 1921, P.L. 789 (40 PS Pa. § 202), filed a suggestion with the court of common pleas of Dauphin county, alleging that the company was in a financially unsound condition; that the conduct of its business would be detrimental and hazardous to its policy-holders, creditors, and the public; that certain officers of the company had made illegal investments of the funds of the company and had appropriated to their own use other assets of the company. He prayed for an order that the defendant show cause why the business of the company should not be closed, its charter vacated, and its assets taken into possession of the insurance commissioner for liquidation under his direction, and for an injunction. On the same day the court of common pleas granted the order to show cause and enjoined the company from transacting any business and from disposing of its property until further order of the court. The order to show cause was served upon the company on December 11, 1933.
On December 14, 1933, the company filed an answer in the suit pending before the federal District Court, substantially admitting the alleged withdrawal of assets and illegal investment, and denying the other allegations of the complaint, and alleging the pendency of the proceedings in the court of common pleas.
On the same day the court of common pleas entered a further order restraining the company and its officers or agents from transacting any business and from disposing of its property and restraining all persons other than the insurance commissioner and his agents from taking possession of it. On the following day the federal District Court entered an order which recited the pendency of the proceedings in the court of common pleas and restrained the company and its officers or agents from permitting any one to receive or take possession of its property and enjoining all persons from interfering with it in any way. On that day both the last-mentioned restraining order of the court of common pleas and that of the federal District Court were served on the company.