American Constitution Fire Assur. Co. v. O'Malley

Citation113 S.W.2d 795,342 Mo. 139
Decision Date25 February 1938
Docket Number34629
PartiesThe American Constitution Fire Assurance Company et al., Appellants, v. R. E. O'Malley, Superintendent of Insurance
CourtUnited States State Supreme Court of Missouri

[Copyrighted Material Omitted]

Appeal from Cole Circuit Court; Hon. Nike G. Sevier, Judge.

Affirmed and remanded (with directions).

Robert J. Folonie, E. R. Morrison, Homer H. Berger, Ragland, Otto & Potter and Igoe, Carroll & Keefe for appellants.

(1) Upon the record presented here the only question of jurisdiction which may be considered is whether the subject matter of the action is of a class with which the court may deal by virtue either of its general or of its statutory powers. Whether the pleading by which the case is presented justifies the relief prayed (or any relief, for that matter) is not the test. State ex rel. Leake v. Harris, 334 Mo. 713, 67 S.W.2d 981; State ex rel. Union Depot Ry. Co v. Valliant, 100 Mo. 61, 13 S.W. 398; Schubach v. McDonald, 179 Mo. 182, 78 S.W. 1020; State ex rel. Term. Railroad Assn. v. Tracy, 237 Mo. 121, 140 S.W. 888; State ex rel. McNamee v. Stobie, 194 Mo. 14, 92 S.W. 191; State ex rel. Delmar Jockey Club v. Zachritz, 166 Mo. 307, 65 S.W. 999; State ex rel. Hofmann v. Scarritt, 128 Mo. 340, 30 S.W. 1026; Winningham v. Trublood, 149 Mo. 580, 51 S.W. 399. (2) This action is addressed both (a) To the court's jurisdiction, conferred by statute, to review "orders and directions" (without restriction) of the Superintendent of Insurance "together with his findings or determinations of facts upon which such orders or determinations are founded" and to "set aside or modify" the orders or directions reviewed. Sec. 5874, R. S. 1929, and (b) To the general equity jurisdiction which the court is authorized to exercise in such a proceeding. State ex inf. McKittrick, Atty. Gen., v. American Colony Ins. Co., 336 Mo. 406, 80 S.W.2d 882. And the pleaded facts and complaints disclose a subject matter of the kind contemplated by the statute. (3) In invoking that jurisdiction to review the superintendent's order "together with his findings or determinations of facts" upon which the order was founded (Sec. 5874), the plaintiffs properly based their claims as to profits and losses during the test period upon the "aggregate experience" of the stock fire insurance companies of Missouri. (4) However, the pleaded case is one of which the court below had jurisdiction independently of and notwithstanding the claims made in the pleading as to aggregate experience. Each of the following pleaded complaints sufficed of itself to invoke jurisdiction: (a) That the superintendent failed to deal separately with separate classes of insurance involved, basing his order as to each of these separate classes upon total profit and loss figures for all classes, although a substantial part of the experience reflected in those figures was unrelated to the two separate classes (fire insurance and windstorm insurance) involved. This was arbitrary and of itself invalidated the order. Northern Pac. Ry. Co. v. Dept. of Public Works, 268 U.S. 39, 45 S.Ct. 414. (b) That the findings upon which the superintendent based his order were false in fact -- were unsupported by any evidence whatever -- therefore totally invalid. Chicago Junction Case, 264 U.S. 263, 44 S.Ct. 317; Interstate Commerce Comm. v. Union Pac. Railroad Co., 222 U.S. 547, 32 S.Ct. 108. (5) The plaintiffs, each complaining of the same wrong and having a community of interest in each of the questions of law and fact presented, properly joined in one action to prevent a multiplicity of suits. 1 Pomeroy's Eq. Jur. (4 Ed.), sec. 269, pp. 500-504; Newmeyer v. Railroad Co., 52 Mo. 81; Ranney v. Bader, 67 Mo. 480; Dennison v. City of Kansas, 95 Mo. 416, 8 S.W. 429; Castilo v. State Highway Comm., 312 Mo. 244, 279 S.W. 673; Breimeyer v. Star Bottling Co., 136 Mo.App. 84, 117 S.W. 119; Liverpool & London & Globe Ins. Co. v. Clunie, 88 F. 167; International Organization United Mine Workers of America v. Red Jacket Consolidated Coal & Coke Co., 18 F.2d 839; Alliance Ins. Co. of Philadelphia v. Jamerson, 12 F.Supp. 957. (6) The Superintendent of Insurance had the power to compromise and settle the rate controversy. In re Englehard & Sons Co., 231 U.S. 646; State ex rel. Abeille Fire Ins. Co. v. Sevier, 335 Mo. 286; O'Connell v. Pac. Gas & Elec. Co., 19 F.2d 460; Agnew v. Brall, 124 Ill. 312; Oakman v. City of Eveleth, 163 Minn. 100, 203 N.W. 514; St. Louis, I. M. & S. Ry. Co. v. Anthony, 73 Mo. 434; United States ex rel. Louisiana v. Jack, 244 U.S. 397; Pacific Coast Elevator Co. v. Department of Public Works, 130 Wash. 620, 228 P. 1022; Boston & Worcester Railroad Corp. v. Western Railroad Corp., 14 Gray, 253; Matthews v. State, 149 So. 648. Under Missouri laws, the Superintendent of the Insurance Department is an entity distinct from the State, with power to sue and be sued. R. S. 1929, secs. 5678, 5942, 5947, 5948, 5985, 5987; State v. Homesteaders Life Assn., 90 F.2d 543. When a municipality, county or other governmental subdivision, or a public officer are by law empowered to sue or be sued, such power to sue or be sued carries with it the incident to settle or compromise all such matters respecting which they may sue or be sued. Farnham v. Lincoln, 75 Neb. 502, 106 N.W. 666; Petersburg v. Mappin, 14 Ill. 193; New Orleans County v. Bowen, 4 Lans. 24; St. Louis, etc., Railroad Co. v. Anthony, 73 Mo. 431; Prout v. Pittsfield Fire Dist., 154 Mass. 450, 28 N.E. 679; McKennie v. Railroad Co., 110 Va. 70; Grimes v. Hamilton County, 37 Ia. 298; Mills County v. Railroad Co., 47 Iowa 66; Washburn County v. Thompson, 99 Wis. 585, 75 N.W. 309; Wadsworth v. Livingston County, 124 N.Y.S. 334. (7) The court may not take any action that will render the compromise settlement ineffectual. State ex rel. Waterworth v. Harty, 278 Mo. 685; Wright v. Central Ky. Nat. Gas Co., 297 U.S. 537; Terminal Railroad Assn. v. United States, 266 U.S. 17; Prentis v. A. Coast Line Co., 211 U.S. 210; State ex rel. v. Pub. Serv. Comm., 275 Mo. 201; State ex inf. McKittrick v. American Colony Ins. Co., 336 Mo. 406; State ex rel. Pa. Fire Ins. Co. v. Sevier, 102 S.W.2d 882. (8) If the circuit court was without jurisdiction of this cause, this court is also without jurisdiction, and the impounded fund must be returned to appellants, who deposited it. Sec. 5874, R. S. 1929; State ex rel. v. Thompson, 330 Mo. 1146; Gay v. Hudson River Elec. Power Co., 190 F. 805; In re School Dist. of Borough of Wilkinsburg, 93 A. 489; Coombes v. Bush, 15 S.W.2d 602; Winn v. Krow, 289 P. 756; Quinn v. Phipps, 93 Fla. 805, 54 A. L. R. 1186; Ketchum v. Prevost, 142 N.Y.S. 711.

John T. Barker and Floyd E. Jacobs for respondent.

(1) This is a moot case, because in May, 1930, the Insurance Department under Section 5864, Revised Statutes 1929, denied an application for an increase of rates, and thereafter, in May, 1935, while the matter was in litigation, set aside such denial and granted a partial increase; these insurance companies accepted such increase and have since put it in effect. This ends the litigation. United States ex rel Norwegian Nitrogen Co. v. Tariff Comm., 274 U.S. 106; Brownlow, Commr., District of Columbia, v. Schwartz, 261 U.S. 216, 43 S.Ct. 263; Alejandrino v. Quezon, 271 U.S. 528; 2 R. C. L. 169; 27 R. C. L. 82; 1 R. C. L. 317. (2) The Supreme Court of Missouri has held twice that the impounded money in this case was wrongfully and illegally collected by the insurance companies absent an injunction in the circuit court, and absent the approval of the superintendent, and the insurance companies can never acquire title to this impounded money, but it must be returned to the policyholders. Aetna Insurance Co. v. Hyde, 275 U.S. 440; State ex inf. McKittrick, Atty. Gen. v. American Colony Ins. Co., 336 Mo. 406; North British & Merc. Ins. Co. v. Thompson, 52 S.W.2d 472; Alejandrino v. Quezon, 271 U.S. 528. (3) This joint suit for an increase of rates cannot be maintained. Each insurance company must show that the rates complained of were confiscatory as to it. It cannot rely upon the experience of any other company and cannot secure relief on account of such experience. Aetna Ins. Co. v. Hyde, 275 U.S. 440, 48 S.Ct. 174; Mo. Rate Cases, 230 U.S. 474, 33 S.Ct. 975. (4) This suit cannot be maintained on the merits because these insurance companies only had a four months test period after putting the reduced rates in effect, before applying for an increase. No actual test of the reduced rates was ever made. State of Missouri v. Burlington Railroad Co., 241 U.S. 533; Minneapolis, St. P. & S. S. M. Ry. Co. v. Merrick Co., 254 U.S. 376, 41 S.Ct. 142; Ex parte Lincoln G. & E. L. Co., 256 U.S. 512, 41 S.Ct. 560; Northern Pac. Ry. Co. v. North Dakota, 236 U.S. 585, 35 S.Ct. 429; Mo. Rate Cases, 230 U.S. 474; Knoxville v. Knoxville Water Co., 212 U.S. 1, 29 S.Ct. 154; Willcox v. Consolidated Gas Co., 212 U.S. 19; Des Moines Gas Co. v. Des Moines, 238 U.S. 153, 35 S.Ct. 811; Brush Electric Co. v. Galveston, 262 U.S. 443, 43 S.Ct. 607; Louisville v. Cumberland T. & T. Co., 225 U.S. 430, 32 S.Ct. 740; Galveston Electric Co. v. Galveston, 258 U.S. 388, 42 S.Ct. 351; Lincoln Gas Cases, 250 U.S. 256, 39 S.Ct. 455; Wichita Gas Co. v. Pub. Serv. Comm., 2 F.Supp. 814; Chicago & G.T. Ry. Co. v. Wellman, 143 U.S. 339, 12 S.Ct. 402; Lincoln Gas Case, 182 F. 929; Galveston Electric Co. v. Galveston, 272 F. 150; Darnell v. Edwards, 244 U.S. 564, 37 S.Ct. 703; Hammond Lumber Co. v. Pub. Serv. Comm. of Oregon, 189 P. 639, 9 A. L. R. 1232; Jones v. Montpelier & Barre L. & P. Co., P. U. R. 1921D, 148; Chesapeake & Potomac Tel. Co. of Virginia v. Commonwealth, 136 S.E. 588; Denver Union Stockyards Co. v. United States, 57 F.2d 753. (5) This action was premature and...

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