Board of Insurance Com'Rs v. Sproles M. Freight Lines

• Decision Date: 17 April 1936
• Docket Number: No. 13462.,13462.
• Citation: 94 S.W.2d 769
• Parties: BOARD OF INSURANCE COM'RS v. SPROLES MOTOR FREIGHT LINES, Inc., et al.
• Court: Texas Court of Appeals

Page 769

94 S.W.2d 769

BOARD OF INSURANCE COM'RS v. SPROLES MOTOR FREIGHT LINES, Inc., et al.

No. 13462.

Court of Civil Appeals of Texas. Fort Worth.

April 17, 1936.

Rehearing Denied May 22, 1936.

Appeal from District Court, Tarrant County; A. J. Power, Judge.

Suit by the Sproles Motor Freight Lines, Incorporated, against the Board of Insurance Commissioners and another, wherein other motor freight truck lines doing business in state filed a common plea of intervention, and wherein plaintiff as ancillary thereto asked for restraining order against defendants. From a judgment granting a temporary restraining order, named defendant appeals.

Reversed, and restraining order dissolved.

William McCraw, Atty. Gen., and W. W. Heath, Asst. Atty. Gen., for appellant.

Rawlings & Sayers, of Fort Worth, for appellees.

SPEER, Justice.

Sproles Motor Freight Lines, Incorporated, which, for convenience, we shall hereafter refer to as plaintiff, instituted this suit on November 7, 1935, against the Traders & General Insurance Company, which we shall hereafter refer to as defendant company, and against R. L. Davis, Raymond S. Mauk, and R. G. Waters, to whom we shall hereafter refer as board of commissioners.

Plaintiff alleged that it was a public carrier of freight over its motor lines, and that it had procured from the Railroad Commission a permit to do business as such, and that such permit, together with the business built up in the past, constituted a very valuable property right, and that this suit was instituted for the protection of that property right, and, ancillary thereto, asked for a restraining order against the defendant company and the defendant board of commissioners to prevent them from enforcing certain rules, regulations, and provisions alleged to be detrimental to the property rights of plaintiff.

There are several grounds urged by plaintiff why its rights were being jeopardized, and as many reasons why the defendants should be enjoined, pending the hearing of the cause on its merits. We shall refer briefly to those considered by us pertinent to a disposition of the case. They are:

That plaintiff had been engaged in the motor carrier business for a long time prior to 1927, and that, in the purchase of insurance guaranteeing its prompt payment of judgments obtained against it, it had been free to purchase such insurance from any company desiring to sell such policies, but that the Acts of the 40th Legislature (1927), c. 253, p. 373, now article 4682b of the Civil Statutes (Vernon's Ann.Civ.St.), purported to give to the commission of insurance of the state of Texas authority to set rates for premiums and make such rules, regulations, and provisions as the members of the commission thought expedient in the matters of insurance required by the act.

Plaintiff attacks the validity of the act upon the ground that it is in conflict with, and prohibited by, section 35, article 3, of the Constitution of this state, which inhibits a bill containing more than one subject, which shall be expressed in its title; that the said act was void and unenforceable for the reason it was in violation of the anti-trust laws of this state, particularly subdivision 2 and 5 of article 7426, Rev. Civ.Statutes of 1925, and creates a monopoly of certain companies and a discrimination against others.

Alternatively, that, if the act be held valid, then by its terms the only authority the board of commissioners had under the law was, within 90 days after the law became effective in 1927, to fix the rates, provisions, and classifications for insurance required by the act to be furnished by plaintiff and interveners; and that, when once fixed by the commissioners, as was done in 1927, the board of commissioners could not change or modify such rates, rules, conditions, and regulations, and that any subsequent attempt by the board of commissioners to do so was void.

That the board of commissioners did, in 1927, fix the rates for premiums of insurance and make certain classifications, rules, and regulations pertaining to the operation of motortruck lines as common carriers, and that plaintiff did in due season comply with all of said rules, regulations, and provisions, purchasing all insurance of the class and kind required, and in every way fully complied with said order.

That by an order effective on the 12th day of August, 1935, the board of commissioners, without authority of law, arbitrarily modified and changed the rates of the premiums to be charged for insurance to be carried by the plaintiff, by the printing and approval of manuals to that effect, and entered an order that such documents contained all the rates, rules, and regulations governing the writing of such insurance, and that the defendant company which carried plaintiff's insurance had notified plaintiff that it could not rewrite or renew plaintiff's insurance at the expiration of the then existing policies except under the conditions contained in said revised rates, rules, and manuals; and that the rates for premiums set by the board of commissioners on August 12, 1935, were materially higher than those set by it in 1927, and that an enforcement of such order would be confiscatory of plaintiff's property rights, and that the defendant company had acquiesced in the wrongful acts of the board of commissioners in refusing to renew plaintiff's policy of insurance except at the higher rates of premiums and under the provisions of the new order by the board of commissioners.

There is a general allegation that the Act of the 40th Legislature (1927), c. 253, p. 373, now article 4682b, Vernon's Ann.Civ. St., is void and that it be so declared by the court, and that its enforcement be restrained until a hearing thereon can be had.

On the same day the petition was filed, the judge of the Ninety-Sixth district court of Tarrant county, Tex., entered his temporary restraining order, recited to be operative pending the hearing of said cause upon its merits, requiring plaintiff to execute a bond in the sum of $1,000. On the same day the bond was executed and filed, the writ of injunction, temporarily restraining the defendant from enforcing, or further attempting to enforce, the rules, rates, forms, and regulations of the board of commissioners, was seasonably served on the respective defendants.

On November 20, 1935, the board of commissioners filed their application with the court to modify the terms of its restraining order, to the extent that it should be effective as to plaintiff and all other persons, firms, or corporations engaged in a similar business to that of plaintiff who should become a party to this suit by intervention or otherwise before the application should be acted upon.

On the same day this application to modify was filed, eighty-three concerns, purporting to be motor freight truck lines doing business in Texas, filed a common plea of intervention, adopting the pleadings of the plaintiff as their own, and on the same day the court entered its order permitting the intervention and modifying its temporary restraining order theretofore entered on the 7th day of November, 1935, as prayed for in the motion filed. For the purpose of determining the questions involved, we deem it unnecessary to name the long list of interveners.

On the 12th day of December, 1935, defendant commissioners filed a plea to the jurisdiction of the court to hear the issues raised by the plaintiff's petition, alleging that the defendant company was a corporation having its main office and domicile in Dallas, Dallas county, Tex., and that the suit was for injunctive relief only, and that the respective domiciles of the defendant commissioners, as individuals and as commissioners, were in the city of Austin, Travis county, Tex., and that under the terms of articles 4643 and 4656, Rev.Civ.Statutes of 1925, the Ninety-Sixth district court of Tarrant county had no jurisdiction to hear said cause, but that only the district court of Dallas county or Travis county had jurisdiction to try the same. This plea to the jurisdiction was by the court overruled.

On the date of the filing of the plea to the jurisdiction, to wit, December 5, 1935, the board of commissioners filed their motion to dissolve the restraining order, which motion contained the clause: "Without waiving or invalidating any other pleadings herein filed and particularly the plea to the jurisdiction to hear and determine this cause."

On December 12, 1935, the defendant company filed an answer to plaintiff's petition, alleging a lack of jurisdiction in the Ninety-Sixth district court of Tarrant county, on substantially the same grounds set forth by the board of commissioners; a plea of misjoinder of parties defendant; and a general plea to the merits of plaintiff's petition.

On December 5, 1935, the court entered an order passing the hearing on plaintiff's petition until December 12, 1935, specially providing that the previously issued restraining order should remain in full force and effect. On December 12, 1935, the court entered an order that the application of plaintiff and interveners for a temporary injunction came on for hearing, and, with announcements of all parties, testimony was heard at intervals until December 20th, when the court found the law was for plaintiff and interveners and that a temporary injunction should issue. He thereupon ordered that a writ issue restraining and enjoining the defendants and each of them, pending the trial of the suit on its merits, from enforcing, or further attempting to enforce, the rules, rates, forms, and regulations set forth in the manuals and orders of the board of insurance commissioners of Texas, approved August 10, 1935, and to be effective after August 12, 1935, and ordered bond in the sum of $1,000. To which judgment the defendants excepted and gave sufficient notice of appeal. Only the board of insurance commissioners has perfected an appeal.

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