Aetna Ins. Co. v. O'Malley

• Decision Date: 17 June 1938
• Docket Number: No. 35234.,No. 35231.,No. 35232.,No. 35233.,35231.,35232.,35233.,35234.
• Citation: 118 S.W.2d 3
• Parties: AETNA INSURANCE COMPANY, a Corporation, ET AL., Plaintiffs, v. R.E. O'MALLEY, Substituted for JOSEPH B. THOMPSON, who was in turn substituted for BEN C. HYDE, Superintendent of the Insurance Department of the State, Appellant, H.P. LAUF, L.H. COOK and GILBERT LAMB, Commissioners and Custodians and their counsel.
• Court: Missouri Supreme Court

118 S.W.2d 3

AETNA INSURANCE COMPANY, a Corporation, ET AL., Plaintiffs, v. R.E. O'MALLEY, Substituted for JOSEPH B. THOMPSON, who was in turn substituted for BEN C. HYDE, Superintendent of the Insurance Department of the State, Appellant, H.P. LAUF, L.H. COOK and GILBERT LAMB, Commissioners and Custodians and their counsel.

No. 35231.

No. 35232.

No. 35233.

No. 35234.

Supreme Court of Missouri.

Court en Banc, June 17, 1938.^*

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

REVERSED.

Roy McKittrick, Attorney General, Drake Watson and Harry G. Waltner, Jr., Assistant Attorneys General, for appellant; J.F. Allebach and Julian O'Malley of counsel.

(1) The orders and judgment appointing Messrs. Cook and Lauf as custodians, and Mr. Lamb as their counsel are illegal and void because contrary to and in conflict with Section 5874, Revised Statutes 1929, which section designates the Superintendent of Insurance as custodian of any fund created by virtue of a rate reduction order. Secs. 5679, 5874, R.S. 1929; Aetna Ins. Co. v. Hyde, 285 S.W. 65, 315 Mo. 113; State ex rel. Barlow v. Holtcamp, 14 S.W. (2d) 646, 322 Mo. 258; 25 C.J. 220; Kaene v. Strodtman, 18 S.W. (2d) 896, 323 Mo. 161. Such orders and judgments being void as contrary to statute and established public policy, they are subject to collateral attack. Gray v. Clement, 227 S.W. 111, 286 Mo. 100; State ex rel. Abeille Fire Ins. Co. v. Sevier, 73 S.W. (2d) 361, 335 Mo. 269; White v. McCoy Land Co., 101 S.W. (2d) 763; Roberts v. Criss, 266 Fed. 296, 11 A.L.R. 698. Section 5874, Revised Statutes 1929, being a procedural statute, controlled the action of the trial court in the instant case. Aetna Ins. Co. v. Hyde, 285 S.W. 65, 315 Mo. 113; Clark v. Railroad, 118 S.W. 40, 219 Mo. 524; Endlich on Interpretation of Statutes, sec. 287. The orders and judgments appointing Messrs. Cook, Lauf and Lamb as custodians and counsel being illegal and void and without justification, it follows that no compensation can be allowed them out of the fund for their services. State ex inf. v. Peoples' United States Bank, 95 S.W. 867, 197 Mo. 605. (2) The appointment of Messrs. Lauf and Cook as referees or commissioners is controlled by the reference statutes and as such commissioners their compensation is limited to ten dollars per day. Sec. 996, R.S. 1929; Thompson v. Thompson, 6 S.C. 279, 6 Rich. 279. (3) Any compensation to which Messrs. Cook, Lauf and Lamb may be entitled are costs of the restitution proceeding and as such should be taxed against and paid by the losing party, the insurance companies. Sec. 1242, R.S. 1929; Huggins v. Hill, 236 S.W. 1054; Newton v. Olson-Schmidt Const. Co., 248 S.W. 929; Getz v. Johnson, 125 Atl. 689; In re Protestant Episcopal Public School, 86 N.Y. 396. (4) The order of March 3, 1936, allowing fees to Messrs. Cook, Lauf and Lamb was unlawful, illegal and beyond the jurisdiction of the court for the reason that it was made during the February Term, 1936, which term was subsequent to that at which the final judgment in the restitution proceeding was entered. State ex rel. Williams v. Daues, 66 S.W. (2d) 137, 334 Mo. 91; Burton v. Railroad Co., 204 S.W. 501, 275 Mo. 185; Niedringhaus v. Niedringhaus Inv. Co., 54 S.W. (2d) 79. (5) The court erred in making and entering its order of February 18, 1936, releasing and discharging plaintiff insurance companies and the sureties on their bonds from any and all liability in connection with the restitution proceeding because such order had the effect of releasing the losing party from the payment of the costs of the restitution proceeding which under the law they were required to pay. Because such order constituted a modification of the final judgment of December 7, 1935, which modification could not be made after the term expired. Aetna Ins. Co. v. Hyde, 34 S.W. (2d) 85, 327 Mo. 115. (6) The court erred in making and entering the orders of February 18, 1936, and March 3, 1936, for the reason that no notice was given to the appellant as to either of said orders. Secs. 758, 760, 761, 1273, R.S. 1929; 46 C.J. 557, secs. 64, 65; Roberts v. St. Louis Merchants' Land Imp. Co., 29 S.W. 584, 126 Mo. 460; State ex rel. Ross v. Sevier, 69 S.W. (2d) 662, 334, Mo. 977; St. Louis v. Realty Co., 168 S.W. 721, 259 Mo. 126. The purported notice of hearing on fees to Messrs. Cook, Lauf and Lamb is insufficient to constitute any notice and therefore void. State ex rel. Anderson v. Becker, 34 S.W. (2d) 27, 326 Mo. 1193. The allowances therefore constituted the taking of property without due process of law. State ex rel. v. North, 264 S.W. 678, 304 Mo. 607. Accordingly, the court erred in overruling appellant's motion to quash the notice of the hearing on the allowance of fees to Messrs. Cook, Lauf and Lamb. The entry of the order of February 18, 1936, was unlawful, illegal and void because made without notice to the appellant and the purported notice was wholly insufficient. (7) The order of allowance of fees to respondents Messrs. Cook, Lauf and Lamb out of the fund is illegal and void for the reason that it expends that part of the fund due one policyholder to pay the expenses of returning excess premium collections to other policyholders, violating the due process clause of the Constitutions of Missouri and the United States, and Section 20 of Article II of the Constitution of Missouri, in that the property of such policyholders who have not been paid is being taken from them without a hearing and such property is being used to pay the expenses of returning to the other policyholders money due them — a private use. Secs. 20, 30, Art. II, Mo. Const.; Sec. 1, Art. IV, U.S. Const.; Fifth Amendment, U.S. Const.; Attorney General v. North Am. Life Ins. Co., 91 N.Y. 57. (8) The court erred in refusing to permit appellant to introduce evidence in support of the motion to vacate and set aside the order of March 3, 1936, allowing fees to Messrs. Cook, Lauf and Lamb, and in denying to appellant the right to make an order of such proof. 46 C.J. 123, sec. 139; Ehrhardt v. Stevenson, 106 S.W. 1118, 128 Mo. App. 476. (9) For all of the foregoing reasons the court erred in overruling appellant's motion to vacate and set aside the order of March 3, 1936, and allowing fees and compensation to Messrs. Cook, Lauf and Lamb.

H.P. Lauf, L.H. Cook and Gilbert Lamb, per se.

(1) Appellant has no appealable interest. The appeals should be dismissed for that reason. Sec. 1018, R.S. 1929; State ex rel. Fischer v. Vories, 62 S.W. (2d) 457; Miller v. Transit Co., 216 Mo. 99; Thomas v. Elliott, 215 Mo. 598; Hopkins v. Cooper, 235 Mo. 461; State ex rel. v. Sevier, 73 S.W. (2d) 372; State ex rel. Barker v. Railroad Co., 265 Mo. 686; State ex rel. v. Talty, 139 Mo. 391; 3 C.J., pp. 629, 659, secs. 489, 490; High v. State, 30 Ohio C.C. 462; State v. McDonald, 128 Pac. 835; Northern Union Gas Co. v. Mayer, 174 Fed. 817; Adams v. Wood, 8 Cal. 315; Swackhamer v. Kline's Admr., 25 N.J. Eq. 503; Chicago v. Transit Co., 284 U.S. 577. (2) The appeals should be dismissed for want of a sufficient statement of the facts. Sec. 1060, R.S. 1929; Rule 15, Sup. Ct.; Lamb v. Bush, 49 Mo. App. 342; Crockett v. Rys. Co., 243 S.W. 905; Euler v. Highway Comm., 55 S.W. (2d) 722; State ex rel. Highway Comm. v. Shain, 62 S.W. (2d) 711. (3) The appeals should be dismissed for want of a sufficient abstract of the record. Rule 13, Sup. Ct.; Myrick v. Hamilton, 26 S.W. (2d) 1011; Wallace v. Libby, 231 Mo. 341; Barham v. Shelton, 221 Mo. 66; Pippert v. Cook, 203 S.W. 236; Ford v. Brokerage Co., 197 S.W. 339; St. Louis v. Young, 248 Mo. 347. (4) The case before the lower court was an equity case. The court had inherent power to appoint commissioners and custodians a counsel for them. It had jurisdiction of the fund with power to pay them for their services out of such fund. State ex rel. Thompson v. American Colony Ins. Co., 80 S.W. (2d) 876; Atlantic Coast Line v. Florida, 295 U.S. 310; Ex parte Lincoln Gas Co., 256 S.W. 517; State ex rel. Abeille Ins. Co. v. Sevier, 335 Mo. 269; McCune v. Goodwillie, 204 Mo. 333; State ex rel. v. Consolidated School Dist., 209 S.W. 942; State ex rel. v. Muench, 230 Mo. 253; 16 Cyc. 795; Hereford v. Natl. Bank, 53 Mo. 330; State ex rel. v. McQuillin, 252 Mo. 339; Fenno v. Primrose, 119 Fed. 801; Hibernia Sav. & Loan Assn. v. Boyd, 100 Pac. 239; 53 C.J. 703, sec. 68; 10 R.C.L. 508, sec. 290; Porter's Appeal, 30 Pa. 496; 53 C.J. 816, sec. 369; People v. Bank of Staten Island, 116 N.Y. Supp. 827; Dollard v. Koronsky, 113 N.Y. Supp. 793; Berry v. Rood, 209 Mo. 667; Weltner v. Thurmond, 98 Pac. 590; Colehour v. Bass, 143 Ill. App. 530; McIntosh v. Ward, 159 Fed. 66; Pickett & Sexton v. School Dist., 193 Mo. App. 528; Railroad v. Railroad Co., 126 Mo. App. 275; Supreme Council Legion of Honor v. Renick, 85 Mo. App. 283; Hemm v. Juede, 153 Mo. App. 259; County Court Clay County v. Baker, 210 Mo. App. 74; Rookery Realty Co. v. Johnson, 251 S.W. 741; Eichberg v. U.S. Shipping Board, 273 Fed. 886; Pullis v. Pullis, 90 Mo. App. 250; 53 C.J., pp. 170, 171, sec. 220; Haynie, Parks & Westfall v. Camden Gas Corp., 56 S.W. (2d) 419; Board of Education v. Lonoke Co., 29 S.W. (2d) 268; Johnson v. United Rys., 247 Mo. 350; Buell v. Kanahwa Lbr. Co., 201 Fed. 769; 17 C.J. 439; Buckley v. Harrison, 10 Misc. 690, 31 N.Y. Supp. 999; State v. Taylor, 7 S.D. 544, 64 N.W. 548; 53 C.J., pp. 135, 139, secs. 163, 164, 168. (5) The fees paid to respondents are not costs within the meaning of Section 1242, Revised Statutes 1929. They are not litigation costs. They are administrative costs. (6) Appellant is precluded by the judgment of December 7, 1935, taxing costs. No objection was made and no appeal taken from that order. The taxing of costs other than costs fixed by statute require judicial investigation and determination. After that judgment the fund still remained with the court for administration. State ex rel. v. Railroad Co., 176 Mo. 450; Beecham v....