The majority opinion ignores the fact that, conformably to the decree of August 22, 1934, approving a reinsurance agreement proposal by the Alliance Life Insurance Company to the Peoria Life Insurance Company, it was adjudged that the former contracts of insurance with policyholders of Peoria "are hereby revived and renewed," and that policies of those former policyholders who assented to the reinsurance agreement were assumed and reinsured by Alliance. Appellants' claims for commissions on renewal premiums are only for commissions on contracts of policyholders who assented to the reinsurance agreement. It is true that the contracts of Peoria with its former policyholders were destroyed by the receivership, but it is equally true that the decree of August 22, 1934, and the reinsurance agreement of October 4, 1934, revived and renewed such contracts. The admitted fact that during the period from November 15, 1933, the day Peoria was placed in receivership, to October 4, 1934, these former policyholders had no insurance with Peoria or with its receiver, is, hence, not controlling. Contractual relations between Alliance and the assenting policyholders came into existence when they failed to file claims against the receiver for the amount *Page 526 of their credit on the day of his appointment, thereby accepting the reinsurance agreement and, in addition, assigning unconditionally to Alliance their claims against Peoria and its assets for the benefit of the Peoria Life Fund. Both parties, namely, Alliance and the former policyholders, were then bound as of November 15, 1933.
Since the reinsurance agreement became effective, former policyholders have paid precisely the same premiums to Alliance as they previously paid to Peoria and, later, to its receiver. Included in these premium payments is an additional amount, technically called a "loading charge," covering the original and renewal commissions of the agents who procured the policies. In short, uninterrupted regular payments of premiums have been made by assenting policyholders, first, to Peoria, next to its receiver and, presently, to Alliance, and the premiums so paid have included the amounts allocable to agents as renewal commissions. New policies with Alliance, as insurer, have not been issued. Instead, Alliance's "Certificate of Assumption," issued to assenting policyholders, has been attached to the old Peoria policies. With complete knowledge of appellants' property rights, Alliance has thus collected premiums included in which were renewal commissions long since earned by appellants.
The appellants completely performed all obligations and duties devolving upon them under their contracts prior to the receivership. In the light of the circumstances present in this case, the decree appointing a receiver, the decree of August 22, 1934, approving the reinsurance agreement, and the agreement itself, do not constitute a bar to appellants' claim for renewal commissions earned by them as agents of Peoria prior to November 15, 1933. The right of an insurance agent to his renewal commissions has long been recognized as a substantial property right. (General American Life Ins. Co. v. Roach, 179 Okla. 301,65 P.2d 458; Hercules Mutual Life Assurance Society v.Brinker, *Page 527 77 N.Y. 435; Schrimplin v. Farmers' Life Ass'n, 123 Iowa, 102,98 N.W. 613; Michigan Mutual Life Ins. Co. v. Coleman, 118 Tenn. 215, 100 S.W. 122.) An agent does not lose his right to renewal commissions, it has been held, by receivership of the issuing company or the transfer of its policies to a successor company.(General American Life Ins. Co. v. Roach, supra; Schrimplin v.Farmers' Life Ass'n, supra.) The mere fact that a reinsurance agreement or a judicial decree purports to deprive the agent of his property right in the renewal commissions is not decisive.(General American Life Ins. Co. v. Roach, supra.) Application of the foregoing principles leads to the conclusion that when the receiver of Peoria and, later, Alliance received renewal premiums on policies of insurance written by former agents of Peoria, a constructive trust was created, and, the receiver and Alliance, in succession, became trustees for the agents to the extent of their renewal commission interest in such premiums. (3 Bogert on Trusts and Trustees, sec. 471, 472; General Life Ins. Co. v.Roach, supra.) Indeed, if the renewal commissions are not paid to the agents it may well be that Alliance will receive a windfall contrary to the familiar principle that equity will not tolerate an unjust enrichment. General American Life Ins. Co. v. Roach,supra; Schrimplin v. Farmers' Life Ass'n, supra.
The review of the Peoria receivership proceedings discloses a virtual abandonment of the idea of liquidating Peoria in the accepted sense of the term "liquidation" and, instead, the reinsurance of its policies with Alliance pursuant to a decree approving an agreement between the receiver and Alliance. The reinsurance agreement discloses that there has been no sale of assets and distribution to creditors, that Alliance assumed and reinsured the policies of "assenting policyholders" and, for all practical purposes, is the successor of Peoria, so far as such policyholders are concerned. Admittedly, Alliance has actually received all *Page 528 of the assets of Peoria except those necessary to pay receivership expenses and the claims of dissenting policyholders. So far as the record discloses, Alliance has received substantial sums of money and assets in kind but has not paid, and under the agreement is not compelled to pay, one cent for the property transferred to it. Alliance is not only a reinsurer but the reinsurance agreement plainly shows that it took over the bulk of business of Peoria, and assumed the latter's liability on all policies of insurance outstanding on November 15, 1933. Having accepted all the benefits attaching to the policies assumed and reinsured it cannot reject the burdens. Pioneer Life Ins. Co. v.Alliance Life Ins. Co. 374 Ill. 576.
General American Life Ins. Co. v. Roach, supra, closely parallels the present case. A comparison of the Roach case and the case at bar discloses neither contract of reinsurance recognized the right of agents to their previously stipulated renewal commissions and the court, in the Oklahoma case, required payment of the entire commissions owing because they were fixed liabilities, which could not be evaded. Here, the practical effect of the reinsurance agreement of October 4, 1934, is a transfer of the assets of Peoria to Alliance except sufficient cash to pay dissenting policyholders and general creditors. There is no substantial distinction between this situation and the complete acquisition by General American Life Insurance Company of all the assets of the Missouri State Life Insurance Company. The fact that the contract in the Roach case was made by the insolvent insurance company and not by its receiver, as here, is immaterial. The insurance commissioner of Missouri, under the law of the State, assumes complete charge of insolvent insurance companies and enjoys the authority and power of a receiver in this State.
Layton v. Illinois Life Ins. Co. 81 F.2d 600, cited in the majority opinion does not support the conclusion of *Page 529 the court. In an action by a former agent against the receiver of the Illinois Life Insurance Company, the Circuit Court of Appeals for the Seventh Circuit stated that the one question presented for determination was whether a life insurance agent under contract for post-agency renewal commissions was entitled, upon receivership of the company, and its consequent inability to continue in business, to recover the "present value" of such commissions upon renewal premiums which the company, had it continued in business, would have eventually received. The only relief sought in the Layton case was the present value of commissions. So far as the opinion discloses, the business was not reinsured and the successor company was not receiving renewal premiums with the ability to pay renewal commissions. The court's observation: "The very nature of the agency contract impels the conclusion that it must have been within the contemplation of the contracting parties that the company might some day become incapacitated from continuing in the insurance business," might, perhaps, be pertinent to the present inquiry if the relief sought was the present value of unpaid renewal commissions. Such is not, however, the case. Appellants' claims are not for damages resulting from the loss of the privilege of soliciting insurance after November 15, 1933, but are, instead, for compensation for services wholly performed prior to the day named.
By the decree of August 22, 1934, the agency contracts of appellants were disaffirmed as of November 15, 1933, and, accordingly, they were no longer authorized to act as agents, managers, or supervisors, or to sell contracts of insurance or collect premiums thereon due to Peoria. The agents were not before the court when this decree was entered and they were not parties to the reinsurance agreement. Manifestly, their claims to payment for services previously rendered in selling the original policies and compensation *Page 530 already earned cannot be destroyed by either the decree or the agreement executed pursuant thereto.
For the foregoing reasons, among others, I am constrained to dissent from the conclusion reached by, and the views expressed in, the majority opinion.