Carl L. Mauser and Joseph M. Walker v. United Security Life

Two policyholders of United Security Life, a stock life insurance company, brought this diversity action against certain of the company’s incorporators, directors, and principal stockholders. The original complaint is not in the record before us. Other record references, however, indicate that the suit was intended as a secondary action on behalf of the life insurance company. The purpose of the suit was apparently to obtain repayment to that company of sums asserted to have been fraudulently and wrongfully converted.

Defendants moved to dismiss the original complaint upon the ground that only a stockholder may institute a secondary action on behalf of a stock life insurance company. This motion was granted with leave to amend. An amended complaint was filed. Since the original complaint is not before us, we are unable to determine the difference between the two pleadings. It is conceded by the parties, however, that in the amended complaint plaintiffs for the first time alleged that the life insurance company was rendered insolvent by the alleged acts of defendants.

The amended complaint was dismissed on the same ground that led to dismissal of the original complaint.…