In re Director of Insurance
| Decision Date | 22 May 1942 |
| Docket Number | 31284. |
| Citation | 3 N.W.2d 922,141 Neb. 488 |
| Parties | In re DIRECTOR OF INSURANCE et al. RISK v. DIRECTOR OF INSURANCE et al. [*] |
| Court | Nebraska Supreme Court |
Syllabus by the Court.
1. If the district court enters a judgment made in accordance with the agreement of the parties to the suit, the court does not inquire into the equities of the matter, and therefore such a judgment is not a judgment upon the merits, for it is not, strictly speaking, the act of the court.
2. A contract for reinsurance and merger of a mutual insurance company must be submitted to the members at an annual meeting, or a special meeting called for that purpose, with 30 days' notice to the members, which notice must contain all the required statements set out in section 44-414 Comp.St.1929, and said steps are jurisdictional requirements.
3. If an order made by the director of insurance lacks certain jurisdictional requirements set out in the statute, then such order is void.
Tyler & Frerichs, of Nebraska City, for appellant.
Peterson & Devoe and Chauncey E. Barney, all of Lincoln, for appellees.
Heard before SIMMONS, C. J., and ROSE, EBERLY, PAINE, CARTER, MESSMORE and YEAGER, JJ.
This action was originally a proceeding before the insurance commissioner of the state of Nebraska, attacking the validity of a reinsurance agreement between appellee companies. Objections were filed to the jurisdiction of the said commissioner over the subject matter. The objections were sustained and the petition dismissed. Appeal was taken to the district court where the objections to jurisdiction were again sustained and the appeal dismissed, from which ruling Norma R. Risk appeals.
The petition on appeal was filed in the district court for Lancaster county by Norma R. Risk, plaintiff, on August 3, 1939, and, while of considerable length, will be briefly summarized by stating that it alleged that on September 30, 1937, the American States Life Insurance Company, a mutual legal reserve insurance company, a Nebraska corporation, issued a $10,000 policy of insurance upon the life of plaintiff, Norma R. Risk. After the issuance of said policy, the name of the insurance company was changed to American Annuity Assurance Company.
It is further alleged that on June 1, 1938, there was submitted to the director of insurance of Nebraska, a reinsurance contract between said American Annuity Assurance Company and the Republic National Life Insurance Company, of Dallas, Texas, by the terms of which said American Annuity Assurance Company reinsured with the Republic National Life Insurance Company all of its outstanding policies and contracts of insurance, including "thrift policies," and said Republic National Life Insurance Company assumed the liability of said American Annuity Assurance Company upon every policy and contract of insurance, including "thrift policies," issued by said American Annuity Assurance Company and then in force.
In support of the application made to the commissioner of insurance of Nebraska, it is alleged there was submitted the purported reinsurance contract, together with the sworn certificate of the secretary of said American Annuity Assurance Company, setting out verbatim the purported minutes of the annual meeting of said company which was held on February 17, 1938, and of subsequent adjourned sessions of said annual meeting which were purported to have been held on March 28, 1938, and May 31, 1938; that the minutes of March 28, 1938, contained the following:
Plaintiff alleges that it was not announced at said adjourned meeting of March 28, 1938, that the American Annuity Assurance Company was negotiating with the Modern Life Insurance Company at St. Paul, Minnesota, or the Republic National Life Insurance Company of Dallas, Texas, and no adjournment was taken until May 31, 1938, for the purpose of approving and adopting a reinsurance contract with some reputable life insurance company, and that, on the contrary, there was presented at that meeting a reinsurance contract between the Modern Life Insurance Company of St. Paul, Minnesota, and said American Annuity Assurance Company, by the terms of which all of the outstanding policies and contracts of insurance of said American Annuity Assurance Company, including "thrift policies," would be reinsured by said Modern Life Insurance Company, and at said meeting on March 28 said proposed reinsurance contract was ratified and approved, subject to the approval of the department of commerce, division of insurance, of the state of Minnesota, and the approval and ratification of same by the board of directors of said Modern Life Insurance Company.
The plaintiff further alleges that on March 28, 1938, I. J. Good, secretary of the American Annuity Assurance Company, subscribed a written certificate, attached to the petition as exhibit A, certifying to the action taken at the annual meeting on said date, and that the department of insurance of Nebraska be notified of the ratification and approval of said reinsurance contract by the members of said company, and that the officers of said company be directed to enter into and consummate the contract for reinsurance and carry out the orders of the department of insurance relating thereto.
Plaintiff further alleges that, upon consideration of the application, the proposed reinsurance contract between said American Annuity Assurance Company and the Modern Life Insurance Company of St. Paul, Minnesota, was disapproved by the department of commerce, division of insurance, of Minnesota, and all proceedings to consummate the said reinsurance contract were thereupon discontinued.
It is further alleged that thereafter the officers of the American Annuity Assurance Company entered into negotiations with the Republic National Life Insurance Company of Dallas, Texas, and on June 1, 1938, entered into a reinsurance contract with said company, and presented the same to the director of insurance of Nebraska for approval, and that in support of its application it caused a record to be made as quoted in part above, and further caused the following record to be made:
Plaintiff alleges that, in truth and in fact, no meeting of the members was ever held at which said proposed reinsurance contract with the Republic National Life Insurance Company was presented, and that no vote of the members for approval or rejection of said reinsurance contract has ever been held, and that said reinsurance contract was made and entered into wholly without the authority of the members of said company.
Plaintiff further alleges that the director of insurance of Nebraska relying upon the sworn certificate of the purported proceedings at said purported meeting of May 31, 1938, and being misled thereby, and believing that all of said proceedings were regular, entered an order on June 1, 1938,...
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