American Ins. Co. v. Scheufler

• Decision Date: 10 July 1942
• Docket Number: No. 12092.,12092.
• Parties: AMERICAN INS. CO. v. SCHEUFLER, Successor, Superintendent of Insurance, et al.
• Court: U.S. Court of Appeals — Eighth Circuit

129 F.2d 143 (1942)

AMERICAN INS. CO. v. SCHEUFLER, Successor, Superintendent of Insurance, et al.

No. 12092.

Circuit Court of Appeals, Eighth Circuit.

July 10, 1942.

William Marshall Bullitt, of Louisville, Ky., and D. A. Murphy, of Kansas City, Mo. (E. R. Morrison and Homer H. Berger, both of Kansas City, Mo., on the brief), for appellants.

Charles L. Henson, of Jefferson City, Mo. (Lawrence Presley, of St. Louis, Mo., and Preston Estep, of Monett, Mo., on the brief), for appellees.

C. C. Madison, of Kansas City, Mo., James T. Blair, of St. Louis, Mo., and P. L. Edwards, of Kansas City, Mo., amicus curiae.

Before GARDNER, WOODROUGH, and JOHNSEN, Circuit Judges.

GARDNER, Circuit Judge.

There are here 137 suits consolidated for the purpose of appeal and presented on one consolidated record. The decrees appealed from are identical in form except as to the names of the parties. They modify earlier decrees entered on stipulation of the parties in the same suits on February 1, 1936, and they direct a distribution to plaintiffs' policyholders of certain impounded funds. Some statement of the underlying facts is essential to an understanding of the issues here presented. In 1930, 139 insurance companies filed 137 separate injunction suits against the Superintendent of Insurance and the Attorney General of Missouri to protect a proposed increase in insurance premium rates. On motions, interlocutory injunctions were granted upon condition that the companies might collect the increased rates pendente lite, but must deposit the amount of the increase so collected with a custodian of the court to await the ultimate outcome of the suits. It was pursuant to these injunctional orders that the funds were impounded, and at the time of the entry of the decrees complained of these funds had reached the aggregate amount of approximately $10,000,000. See O'Malley v. United States of America, 8 Cir., 128 F.2d 676, opinion filed June 1, 1942.

Following the entry of these decrees, the custodian distributed a substantial part of the funds as directed. On May 29, 1939, the then Superintendent of Insurance presented to the court motions for citations against each of the insurance companies, directing plaintiffs "to show cause, if any they have, why said decrees of this court made February 1, 1936, should not be set aside to the extent of the distribution thereof, and that such decrees be so modified as to assure an ultimate distribution to policyholders of the entire fund unlawfully collected from them * * *." The motions charged that the stipulation and agreement for settlement of the pending suits had been procured by bribery, and that the decrees entered thereon had been obtained by fraud upon the court, and that the orders for the distribution of the funds were the direct result of fraud practiced upon the court. On presentation of these motions for citation, all the insurance companies appeared by counsel and indicated their willingness to return to the custodian all funds distributed to them, disclaiming any right or desire for fruit or advantage from the decrees so challenged, but reserving the right to litigate what further action the court should take after their return of the funds to the custodian. Thereupon the court entered orders directing the plaintiffs to restore to the court's custodian all of the impoundings paid to the insurance companies and their representatives under the decrees of February 1, 1936. At the same time the court entered orders to show cause directing the insurance companies to show cause why all impoundings should not be distributed to the proper policyholders and the causes dismissed at the cost of the companies. The companies complied with the orders of restitution. They filed answers to the orders to show cause, in which they in effect disclaimed all advantage in anywise arising from the decrees and settlement of February 1, 1936; alleged that they had either restored all benefits derived under the decrees, or would do so within the time limited by the court's orders, and offered to consent to a vacation of the decrees and a nullification of the settlement and the rate orders; pleaded that they were entitled to a decree investing them with all monies impounded; that if the defendants refused to nullify the decrees then they should be held not to be aggrieved thereby nor by the acts upon which the same rest, in which event the decrees should remain in full force and effect, and all sums adjudged to the respective parties by the decrees should be distributed and paid as so provided. They asked that defendants show cause why the court should not proceed with the determination of the merits of the controversies between plaintiffs and defendants. The Superintendent of Insurance filed a motion to strike the answers. The court then referred the matter to a special master to take testimony and to analyze and summarize the testimony as to the conduct of the parties in the suits leading up to the action of the court ordering distribution of the impounded funds, and as to any connection therewith of any agent of plaintiffs authorized to act, and as to the knowledge of any authoritative officer or officers of the plaintiffs as to the acts of any such agent. On this reference the master took some 1,600 printed pages of testimony which he filed with his report. The cases were then elaborately briefed and orally argued, and, as stated by counsel for appellants in their brief, "submitted on final hearing regarding the retention or disposition of the $8,000,000.00 impoundings in the court's custody."

The court made findings of fact and conclusions of law in each suit in favor of the Superintendent of Insurance, representing the policyholders, and on such findings of fact and conclusions of law entered decrees adjudging that, "The decree heretofore entered in this action on February 1, 1936, is set aside and modified in so far and only in so far as it directs payments of 80 per centum of the impounded funds to the plaintiff * * *. In place of such direction the custodian is directed and ordered to pay promptly to the policyholders contributing thereto the respective contributed portions of the returned funds now in his custody with interest provided for therein." Motions for new trial having been interposed by plaintiffs and denied by the court, these appeals followed.

While appellants set out eleven points as being relied upon by them for reversal, they in fact in their brief discuss only the first eight of these points. Points 9, 10 and 11 are therefore abandoned and will be given no further consideration. Brown Sheet Iron & Steel Co. v. Maple Leaf Oil & Refining Co., 8 Cir., 68 F.2d 787.

Appellees have with their brief filed a motion to dismiss the appeal for failure to comply with the rules of this court. Appellants' brief was not filed within the time limited by the rules of this court, but it was filed before any motion was made to dismiss the appeal. The default was therefore cured before any attempt was made to take advantage of it. It is, however, urged that the brief does not comply with the rules of this court in that it does not set out a separate and particular statement of each point relied upon and intended to be urged, and that the first ten points allege error in the "holding of the court," which has reference only to the opinion of the court. Other criticisms are directed to the brief.

Each of the points relied upon for reversal charge that "the court erred in holding." They do not directly attack the findings of the court nor do they make any specific reference to the court's conclusions of law. Neither do they give any reference to the page of the record where any finding of fact, conclusion of law, or other ruling or action of the court complained of is to be found. They seem to be directed to the opinions of the court handed down in deciding the case on its merits and on denying motions for new trial. The brief seems likewise to be directed to these opinions, as it abounds in references to them. By way of example we quote the following references: "Nevertheless, the three-judge Court's 60-odd page Opinion on the Merits absolutely ignored, and never referred to, the Six Companies." Again, "In its 56-page Opinion Denying the Motions for a New trial, the three-judge Court devoted nine pages to the cases of the Six Companies; and denied the Six Companies a new trial upon two apparently independent grounds, etc." Again, "The three-judge Court devoted about four pages of its opinion denying a new trial to an attempt to prove that Street made the last payment ($10,000) to Pendergast after November 17. Our Parallel Column Comment (p. 133-144) is a critical demonstration that the three-judge Court is absolutely in error." Appellants' Brief, p. 57. Again, "That issue is a convenient one by which to test, once and for all, the accuracy of the three-judge Court's opinion on material matters of fact." Again, "In opposition to the three-judge Court's purely speculative argument about Street's psychology, custom, and supposed lack of funds, we submit the following indubitable evidence, which is more fully set forth in our Parallel Column Comment." Appellants' Brief, p. 58. Again, "These facts completely demolish that part of the three-judge Court's opinion against the Six Companies * * *. That opinion was based on the three-judge Court's `convinced' belief, etc." Appellants' Brief, p. 64. On page 69, appears the following heading, "Response to the three-judge Court's opinion re the Six Companies." Again, "The three-judge Court held that when on March 23-24, 1936, Mr. Erskine tendered the 11%, and requested 5% for expenses, `the obvious duty of these six companies was to refuse to contribute or to receive any proceeds (the 11% payments) from such transactions, to return all payments made under the decree, to disavow all benefits from the decrees and promptly to bring the matter to the...