Equitable Life Assur. Society v. Hardin

• Decision Date: 06 October 1915
• Parties: EQUITABLE LIFE ASSUR. SOCIETY v. HARDIN ET AL.
• Court: Kentucky Court of Appeals

178 S.W. 1155

166 Ky. 51

EQUITABLE LIFE ASSUR. SOCIETY v. HARDIN ET AL.

Court of Appeals of Kentucky.

October 6, 1915

Prohibition by the Equitable Life Assurance Society against Charles A Hardin and others. Petition granted in part, and in part denied.

Alexander & Green, of New York City, Alex. P. Humphrey and Wm. Marshall Bullitt, both of Louisville, and Lewis L. Walker, of Lancaster, for petitioner.

O'Rear & Williams and J. P. Hobson & Son, all of Frankfort, for respondents.

HURT J.

On the 15th day of November, 1869, the Equitable Life Assurance Society, of New York, issued to James Robinson, in Lincoln county, Ky. a policy of life insurance. by which it agreed in consideration of the payment of an annual premium of $364.60 during the life of the insured, to pay to his children, upon his death, the sum of $10,000. The contract of insurance embraced in the policy also provided that the policy should participate in the profits of the society. The premiums were paid each year until the death of the insured in the year 1912. Notice and proof of the death of the insured were duly furnished to the society. Thereafter the children of the insured filed their petition in equity in the circuit court for Lincoln county against the society, in which they alleged, in substance, the failure of the society to pay to them the principal sum of $10,000, and that the profits during the life of the policy were at least $71,984,621.57, and that the portion of profits which should be set apart to the policy of Robinson was not less than $200,000, and that the premiums collected by the society upon the policy were a sum in excess of the net cost of insurance of the life of the insured and the policies paid and of the necessary and actual expenses in conducting the business of the society during the life of the policy, of not less than $10,000, and prayed a recovery against the society of the principal sum of $10,000, and $200,000 because of alleged profits, and $10,000 because of alleged excessive premiums. Allegations were also made that the society had kept and then had in its possession books, papers, and documents relating to its business and the policy sued on which would prove the averments of the petition; that plaintiffs did not know the number of policy holders entitled to participate in the profits, nor the premiums collected, nor the assets of the society, nor the expenses nor profits of it, nor its reserve nor the other data necessary to be known by which it could be determined the profits to which the policy sued on was entitled to have apportioned to it and the amount they were entitled to recover because of the collection of excessive premiums, but that the society had in its possession and had kept books, papers, and documents which would show all the necessary facts, and sought for an accounting; and they alleged that by reason of the accounting requiring the production and examination of many books, papers, and accounts, and the service of expert accountants, it would be impracticable to try and determine the matters in issue in a court of law, and they could not have an adequate remedy, except upon an accounting in equity.

The society, by answer, denied that the society had accumulated any profits which were due to be apportioned to the policy sued on, except what had been paid to the insured during his lifetime, or that any excessive premiums had been collected, and also set out and tendered what it alleged was a true, complete, and accurate accounting of all its transactions, earnings, accumulations, expenses, dividends, receipts from and payments to or on account of the policy sued on, and in respect to the policy sued on, the premium paid, the apportioned share of the expenses each year, the interest earned on its invested funds, the mortality cost, the reserve, and its share of the profits for each year from 1869 to 1911, the premiums collected, death claims paid, the expenses, losses, and profits which were apportioned to, the interest earnings of the funds of, the funds contributed by, and the amount paid out as endowments, annuities, surrender values, and dividends to policy holders of the class to which the policy sued on belonged, and also the same information as to all other classes of policies in the society.

The plaintiffs replied, and controverted all the material averments of the answer, and denied the truthfulness, completeness, or accuracy of the settlement tendered, and the various allegations of the correctness of the data upon which the tendered settlement was based.

Upon motion of the plaintiffs, and over the objection of the defendant, the cause was then referred to commissioners to hear proof and to make and report a true and complete settlement of the accounts between the litigants arising from the policy sued on. The order of reference to the commissioners provided that they should hold their sittings at Stanford, Ky. and, among other things, to accumulate such data and to report such findings as will necessarily involve all the accounts kept by the society in the conduct of its business from the year 1869 until the year 1911. A portion of the order of reference is as follows:

"The defendant society and its officers and agents are ordered to appear before the aforesaid commissioners at their sittings at Stanford, Ky. at such reasonable times and occasions as the said commissioners may require, and shall bring with them for the examination and use of the said commissioners such books, papers, documents, and records of the said society as may enable the said commissioners to comply with this order of reference, and the said defendant society is ordered to leave with the said commissioners copies of such entries upon such books as the said commissioners may require, so as to enable them to make the settlement herein directed. But said commissioners, in ordering production of said books and papers, will so regulate the proceedings as to not interfere unduly with the other business of the defendant."

Another clause in said order provides as follows:

"All the proof is ordered to be taken by and before said commissioners."

The defendant society moved the court to enter an order in connection with the order of reference, which provided that the parties might have the right to take proof in accordance with the provisions of the Code governing such cases, but this motion was overruled.

The Equitable Assurance Society then filed its petition in this court against the judge of the Lincoln circuit court and the commissioners, in which it alleged, in substance, that the judge did not have jurisdiction to appoint the commissioners, nor to require all the proof to be taken at Stanford, nor to require the production of the books, papers, and documents of the society, nor to have them brought to Stanford to be inspected and used, nor to refer the case to commissioners without giving them directions or principles to guide them in the performance of their duties, all of which things it was alleged that the judge had erroneously done without jurisdiction so to do, and against which alleged errors it did not have an adequate remedy by appeal, and prayed for a writ of prohibition against the judge requiring the setting aside the order of reference, and restraining the commissioners from carrying out the order until the further order of this court.

Under section 110 of the Constitution, which provides that this "court shall have power to issue such writs as may be necessary to give it a general control of inferior jurisdiction," it has been frequently determined what power this court has in regard to the issual of a writ of prohibition and when it will interfere with inferior jurisdictions by the issual of such a writ. The well-established doctrine is that this court has the power to issue such a writ when the inferior court is proceeding out of its jurisdiction, or is proceeding erroneously within its jurisdiction, and the remedy for the error by appeal is not adequate. Hindman v. Toney, 97 Ky. 413, 30 S.W. 1006, 17 Ky. Law Rep. 286; Shackelford v. Patteson, 110 Ky. 863, 62 S.W. 1040, 23 Ky. Law Rep. 316; L. & N. R. R. Co. v. Miller, 112 Ky. 464, 66 S.W. 5, 23 Ky. Law Rep. 1714; Campbellsville Telephone Co. v. Patteson, 114 Ky. 52, 69 S.W. 1070, 24 Ky. Law Rep. 832; Jenkins v. Berry, 119 Ky. 350, 83 S.W. 594, 26 Ky. Law Rep. 1141; Hargis v. Parker, 85 S.W. 704, 27 Ky. Law Rep. 441, 69 L.R.A. 270; Jenkins v. Berry, 122 Ky. 311, 92 S.W. 10, 28 Ky. Law Rep. 1224; Com. v. Berry, 92 S.W. 936, 29 Ky. Law Rep. 234; Boone v. Riddle, 86 S.W. 978, 27 Ky. Law Rep. 828; Morgan v. Clements, 153 Ky. 33, 154 S.W. 370; Carey v. Sampson, 150 Ky. 460, 150 S.W. 531; Rush v. Denhart, 138 Ky. 238, 127 S.W. 785, Ann.Cas. 1912A, 1199; Fish v. Benton, 138 Ky. 644, 128 S.W. 1067; White v. Kirby, 147 Ky. 496, 144 S.W. 369; Weaver v. Toney, 107 Ky. 419, 54 S.W. 732, 21 Ky. Law Rep. 1157, 50 L.R.A. 105.

No writ of prohibition will be issued against ministerial officers, such as commissioners of courts, because section 110 of the Constitution confines the powers of this court to issuing writs of prohibition against judicial tribunals. Morgan v. Clements, 153 Ky. 33, 154 S.W. 370.

Of the matters complained of in the petition, they all seem to be such of which the Lincoln circuit court has jurisdiction, and this court ought not to interfere by granting the writ prayed for, unless the judge of that court is proceeding erroneously, and the remedy by appeal does not afford an adequate remedy. Of the matters complained of,...