Liverpool & London & Globe Ins. Co. v. Clunie

• Decision Date: 27 June 1898
• Docket Number: 12,557,12,563,12,566,,12,564,12,567.
• Citation: 88 F. 160
• Court: U.S. District Court — Northern District of California
• Parties: LIVERPOOL & LONDON & GLOBE INS. CO. et al. v. CLUNIE. HARTFORD FIRE INS. CO. et al. v. SAME. HANOVER FIRE INS. CO. et al. v. SAME. AMERICAN FIRE INS. CO. et al. v. SAME. SPRINGFIELD FIRE & MARINE INS. CO. et al. v. SAME.

88 F. 160

LIVERPOOL & LONDON & GLOBE INS. CO. et al. v. CLUNIE.

HARTFORD FIRE INS. CO. et al. v. SAME.

HANOVER FIRE INS. CO. et al. v. SAME.

AMERICAN FIRE INS. CO. et al. v. SAME.

SPRINGFIELD FIRE & MARINE INS. CO. et al. v. SAME.

Nos. 12,557, 12,563, 12,564, 12,566,, 12,567.

United States Circuit Court, N.D. California.

June 27, 1898

T. C Coogan (Wilson & Wilson, W. S. Goodfellow, and John Garber of counsel), for complainants.

Bridgford & Clunie and Andrew J. Clunie in pro. per. (George D. Collins and Eugene F. Bert, of counsel), for defendant.

MORROW Circuit Judge.

Five bills in equity have been filed by 62 fire insurance companies, doing business in the state of California, against Andrew J. Clunie, insurance commissioner of the state of California, to restrain him from doing certain acts which, it is alleged, will cause the complainants irreparable injury. In bill No. 12,557 the complainants are 34 foreign corporations, viz. 21 incorporated under the laws of Great Britain and Ireland, 2 under the laws of the dominion of Canada, 7 under the laws of the empire of Germany, 2 under the laws of the republic of Switzerland, 1 under the laws of the colony of New Zealand, and 1 under the laws of the kingdom of Sweden. In bill No. 12,563 the complainants are 6 corporations incorporated under the laws of the state of Connecticut. In bill No. 12,564 the complainants are 10 companies incorporated under the laws of the state of New York. In bill No. 12,566 the complainants are 5 companies incorporated under the laws of the state of Pennsylvania. In bill No. 12,567 the complainants are 7 companies incorporated under the laws of the states of Massachusetts, New Jersey Missouri, Minnesota, Wisconsin, Rhode Island, and Louisiana. The questions presented for determination in these several bills are substantially the same, and will therefore be considered together.

The bills allege that the complainants are corporations formed for the purpose of insuring against loss or damage by fire, and are engaged in carrying on the business of fire insurance in the state of California; that, before commencing the business, each of them, in accordance with the law of the state, procured from the insurance commissioner of the state, then in office, a certificate of authority, authorizing it to transact insurance business in the state, and paid to the commissioner therefor the sum of $20 for each certificate as required by law; that these certificates are still in force, and have not been canceled, revoked, surrendered, or in any wise impaired; that each of the complainants, at all the times mentioned in the complaint, was, and has continued to be, and is, fully solvent; that they have not at any time transferred or caused to be transferred to the United States circuit court any action commenced against them, or any of them, in a court of the state of California; and that they have at all times complied with the laws of the state. The bills allege, further, that in the year 1885 the legislature of the state of California passed an act entitled 'An act to require the payment of certain premiums to counties, and cities and counties, by fire insurance companies not organized under the laws of the state of California, but doing business therein, and providing for the disposition of such premiums'; that, by its terms, this act purported to require the agents of corporations to incorporated under the laws of this state, but carrying on the business of fire insurance therein, to pay to the county treasurer of every county, or city and county in this state, for the use and benefit of the firemen's fund of said county, or city and county, on the first Monday in December of each year, sum equal to 1 per cent. upon the amounts of all premiums which, during the year or part of a year ending on the last preceding Monday of September, should have been received by such agent or person, or any other person or agent, acting during such period for such corporation so engaged in such business, or should have been agreed to be paid to such corporation or its agents, for any insurance effected or agreed to be effected by such corporation within the limits of such county, or city and county; that this act is in violation of the constitution of the state of California, and is null and void, and has been so adjudged by the supreme court of the state of California; that, notwithstanding the invalidity of such act, the defendant, as insurance commissioner, claims and asserts that the act of the legislature is valid, and that all foreign corporations carrying on the business of fire insurance in this state are under obligations to pay said taxes, and claims and asserts that, in case of failure so to do, such foreign corporations may and should be prevented from carrying on the business of fire insurance in this state; that the defendant, as insurance commissioner, further claims and asserts that he has power and authority conferred upon him by the laws of the state, as such insurance commissioner, to enforce the payment by said foreign corporations of such taxes, or, failing in such payment, to exclude such corporations from carrying on the business of fire insurance in this state; that none of the complainants have paid any taxes or percentages required to be paid by the act of the legislature since the year 1885; that the amount of such taxes and percentages remaining unpaid, and which would be due and payable by the complainants if the said act of the legislature were valid, is the sum of $278,000 and upward; that the defendant, as insurance commissioner, demanded from each of the complainants, in respect to the business respectively transacted by them, the payment of said taxes accrued since the year 1885, and demanded that such payment be made, or that each of the complainants cease the transaction of insurance business in this state on or before the 1st day of February, 1898; that the defendant threatens and intends, in case said taxes be not paid as demanded, to revoke the certificates of authority held by the complainants, and forbid them from transacting the business of fire insurance in this state, and threatens and intends, after revoking said certificates of authority, to give notice to the public, by advertisements in newspapers, that said certificates have been revoked, and that complainants are forbidden to transact the business of fire insurance in this state, and that all policies of insurance and contracts made by them thereafter will be null and void; that complainants have been transacting the business of fire insurance in this state for a number of years; that each of them has established agencies throughout the state of California at divers places, and that each of them has expended large sums of money in establishing said agencies, and in advertising their business, and in providing supplies therefor; that each of the complainants has a large and valuable business in the state of California, of the value of $20,000 and upward; that if the defendant be permitted to carry his threats into execution, and revoke said certificates of authority, complainants, and each of them, will be obstructed in the conduct of their business, their customers and the public will be deterred from accepting their policies of insurance, and will insure their property with other insurance companies, and that the business of each of the complainants, at present large and valuable, will be utterly ruined and destroyed; that if the defendant be not restrained by injunction, and be permitted to carry his threats into execution, multiplicity of suits will result, in that each of the complainants will be compelled to commence an action for damages against the defendant, and in that the defendant will commence actions to recover penalties against the agents of each of the complainants continuing to transact business, pursuant to the provisions of section 596 of the Political Code of the state of California; that the complainants are without adequate remedy at law in the premises; that the injury threatened to them is irreparable; and that the damages which will be sustained by them are difficult or impossible for exact ascertainment. The prayer of the bill in case No. 12,557 is that it be adjudged by the decree of the court that the act of the legislature of 1885 is null and void, and that the complainants are not under any obligation to pay the taxes or percentages therein mentioned, either as a tax or as a condition of their doing the business of fire insurance in this state; that the defendant be enjoined and restrained from revoking the certificates of authority, or any of them, issued to the complainants, or from in any manner obstructing or interfering with the complainants, or any of them, or their agents, in the transaction of fire insurance business in the state of California, and for a writ of injunction pendente lite, restraining the defendant from doing any of the acts mentioned in the bill of complaint.

The bill of complaint in case No. 12,557 was filed January 27 1898, and on the same day an order was issued requiring the defendant to show cause, on February 7, 1898, why an injunction should not issue as prayed for in the bill of complaint, and in the meantime the defendant was restrained from doing any of the acts or things mentioned in the bill of complaint, and threatened by him, and from revoking any of the certificates of authority theretofore issued by the insurance commissioner of the state of California to the complainants, or any of them, and from interfering with or obstructing the complainants, or any of them, or their agents, in the transaction of fire insurance business in the state of California. After the filing of the bill, and after the order...