Lucas v. Lamb

• Decision Date: 08 July 1941
• Docket Number: No. 37448.,37448.
• Citation: 156 S.W.2d 634
• Parties: RAY B. LUCAS, Superintendent of the Insurance Department of the State of Missouri, Appellant, v. GILBERT LAMB.
• Court: Missouri Supreme Court

156 S.W.2d 634

RAY B. LUCAS, Superintendent of the Insurance Department of the State of Missouri, Appellant, v. GILBERT LAMB.

No. 37448.

Supreme Court of Missouri.

Division One, July 8, 1941.

Rehearing Denied, October 30, 1941.

Motion to Transfer to Banc Overruled, December 12, 1941.

Appeal from Osage Circuit Court. — Hon. R.A. Breuer, Judge.

REVERSED AND REMANDED (with directions).

Roy McKittrick, Attorney General, Covell R. Hewitt and Harry H. Kay, Assistant Attorneys General, for appellant; Charles L. Henson of counsel.

(1) The Circuit Court of Osage County had original jurisdiction of this cause. 2 R.C.L. 297; Aetna Ins. Co. v. Hyde, 34 S.W. (2d) 85, 327 Mo. 115; Ex parte Morris & Johnson, 9 Wall. 605, 19 L. Ed. 799; Nodaway County v. Kidder, 129 S.W. (2d) 857, 344 Mo. 795; Third Natl. Bank v. St. Charles Savs. Bank, 149 S.W. 495, 244 Mo. 554. (2) The money sought to be recovered by this action is money which was illegally collected from policyholders by certain fire insurance companies. Aetna Ins. Co. v. Hyde, 285 S.W. 65, 315 Mo. 113; Aetna Ins. Co. v. Hyde, 48 Sup. Ct. 174; Aetna Ins. Co. v. O'Malley, 118 S.W. (2d) 3, 342 Mo. 800. (3) The plaintiff, Superintendent of Insurance, is the legal custodian of the money herein sued for and is trustee of same for the policyholders. Sec. 5874, R.S. 1929; State ex rel. Lucas v. Blair, 346 Mo. 1017; State ex rel. Abeille Fire Ins. Co. v. Sevier, 73 S.W. (2d) 361, 335 Mo. 269; State ex rel. Carwood Realty Co. v. Dinwiddie, 122 S.W. (2d) 912, 343 Mo. 592. (4). As trustee of an express trust, plaintiff has the right to maintain this action. Sec. 699, R.S. 1929; Bogert, Trusts & Trustees, sec. 954; State ex rel. Abeille Fire Ins. Co. v. Sevier, 73 S.W. (2d) 361, 335 Mo. 269; Restatement of the Law, Trusts, sec. 280. (5) The money sued for in the case at bar is money which was paid to defendant Lamb, respondent herein, upon void orders of the Circuit Court of Cole County out of policyholders' funds accumulated in the rate review litigation. Aetna Ins. Co. v. O'Malley, 118 S.W. (2d) 3, 342 Mo. 800. (6) The orders by virtue of which defendant Lamb received the money sued for herein having been void, the defendant acquired no right or title to said money and thus now holds same illegally. 34 C.J. 509; Freeman, Judgments (4 Ed.), sec. 117; State ex rel. Abeille Fire Ins. Co. v. Sevier, 73 S.W. (2d) 361, 335 Mo. 269; Ralph v. Annuity Realty Co., 28 S.W. (2d) 662, 325 Mo. 410; West St. Louis Trust Co. v. Brokaw, 102 S.W. (2d) 792, 232 Mo. App. 209. (7) Plaintiff being legally entitled to the money which defendant received, and defendant having shown no equal or better title than plaintiff's, the judgment should have been for plaintiff. Johnson-Brinkman Co. v. Central Bank, 116 Mo. 558, 22 S.W. 813; Pile v. Bank, 187 Mo. App. 61, 173 S.W. 50; Bisesi v. Farm & Home S. & L. Assn., 78 S.W. (2d) 871, 231 Mo. App. 897; Bank v. Investment Co., 160 Mo. App. 369, 140 S.W. 921. (8) Plaintiff is entitled to interest on the money sued for from the date of its receipt by defendant. (a) Where one receives money which rightfully belongs to another, the law implies a promise on the part of the receiver to repay it and thus creates a debt. Bisesi v. Farm & Home S. & L. Assn., 78 S.W. (2d) 871, 231 Mo. App. 897; Cotton Co. v. Dry Goods Co., 217 S.W. 323, 203 Mo. App. 25; Harrington v. Gilchrist, 99 N.W. 909; 33 C.J. 203. (b) Interest is owed by debtor upon all sums after they become due and payable. Sec. 2839, R.S. 1929; Jefferson City Savs. Assn. v. Morrison, 48 Mo. 273; Great Northern Ry. Co. v. Erie Ry. Co., 58 Fed. (2d) 414. (9) The court should reverse and remand the case with directions to lower court to enter judgment for plaintiff on each count of the petition. (a) Defendant's equitable answer praying affirmative relief converted the case into an equity case. Liberty Mut. Ins. Co. v. Jones, 130 S.W. (2d) 945, 344 Mo. 932. (b) Where the trial court's finding and decree, in an equity case, is not sustained by law and the evidence, the Supreme Court will proceed to make its own findings and enter such judgment as equity and justice require. Smith v. Holdoway Const. Co., 129 S.W. (2d) 894, 344 Mo. 862.

Gilbert Lamb, pro se.

(1) The review suit of Aetna v. Hyde was an equity case. State ex inf. v. Old Colony Ins. Co., 80 S.W. (2d) 876. The restitution proceeding, under the motion and judgment thereon, was in equity. Atlantic Coast Line v. Florida, 295 U.S. 301. The plea to the jurisdiction was properly pleaded as a part of the answer. Little v. Harrington, 71 Mo. 390. Jurisdiction of the trial court over the subject matter of the action may be raised for the first time in the appellate court or on its own motion. State ex rel. v. Vories, 62 S.W. (2d) 457. The Circuit Court of Osage County did not have original jurisdiction over the subject matter involved in the case at bar. Gregory v. Bank, 50 N.E. 520; In re Antigo Screen Door Co., 123 Fed. 249; Carbitt v. Bank, 114 Fed. 602; Barry v. Rood, 209 Mo. 662; State ex rel. v. Reynolds, 209 Mo. 161; State ex rel. v. Foard, 268 Mo. 300; State ex rel. v. Landis, 173 Mo. App. 198; State v. Davis, 190 S.W. 964; Railroad v. Herndon, 33 S.W. 377. This court and even if the parties were the same, will not piece out the record in a case before it by referring to the record of a previously decided case. Rigely v. Prior, 233 S.W. 831; Banks v. Burnans, 61 Mo. 76; Sparlock v. Ry. Co., 76 Mo. 67; Sheets v. Railroad, 152 Mo. App. 376; Domer v. Board, etc., Commissioners, 278 Ill. 189; Huchins v. George, 101 Atl. 108; Oliver v. Euriquez, 117 Pac. 884; Pacific, etc., Works v. Goerig, 104 Pac. 151; Allison v. Ins. Co., 104 N.W. 753. In action for money had and received no surprises can be sprung on defendant. 37 Cyc. 880 -G-2; Bank v. Scott, 1 Mo. 744. (2) As construed by this court in State ex inf. v. Old Colony Ins. Co., 80 S.W. (2d) 876; American Const. Fire Assur. Co. v. O'Malley, 133 S.W. (2d) 795; State ex rel. Robertson v. Sevier, 115 S.W. (2d) 810; State ex rel. v. Dinwiddie, 122 S.W. (2d) 912, and Aetna Ins. Co. v. O'Malley, 118 S.W. (2d) 3, Section 5874 is void in that it is sought by such decisions to invest the superintendent with final judicial power over said fund and thereby denying due process and equal protection of the law. Mo. Const., Art. 6, Sec. 1; Sec. 1, 14th Amendment, U.S. Constitution. The superintendent is not a court. State ex inf. v. Old Colony Ins. Co., 80 S.W. (2d) 876. (3) The Circuit Court of Cole County had jurisdiction to make the class of appointments he made in Aetna Ins. Co. v. O'Malley, and he had the same jurisdiction to be wrong as right. His act could, at most, be error. 1 Pomeroy's Eq. Juris., sec. 129. Estoppel is an outgrowth of equity to mitigate the rigors of the law and is to be administered alone by courts of equity. Penn Oil Co. v. Calf Creek, etc., Co., 140 Fed. 507, 514. The superintendent was and is estopped to question the validity of the appointments of Cook, Lauf and respondent. Randolph v. Hunting Clubs, 15 S.W. (2d) 834, affirmed by this court in Randolph v. Fricke, 35 S.W. (2d) 912. Moreover, respondent was entitled to compensation. Dissenting opinion and cases cited in Aetna Ins. Co. v. O'Malley, 118 S.W. (2d) 13. (4) Sec. 5874 controlled the impoundment of premiums from its effective date only, to-wit, June 25, 1923. Aetna Ins. Co. v. O'Malley, 118 S.W. (2d) 3. Therefore the excess premiums collected from Nov. 15, 1922, to June 25, 1923, in the sum of $268,342.41 (249) paid Cook and Lauf was not subject to the provisions of Section 5874, and the money sued for was and is, in equity, entitled to be charged against said sum. Laws 1923, pp. 234, 235; Bobb v. Taylor, 184 S.W. 1028. (5) If the appointments of Cook, Lauf and respondent were void, which we deny, then likewise the payments by the companies to Cook and Lauf, under the same order, were void; did not discharge their judgment obligations and, in equity, the appellant should be required to compel payment by the companies of the monies sued for herein. 21 C.J. 172, 193, sec. 179; 1 Pomeroy's Eq. Juris., sec. 687; Schradski v. Albright, 93 Mo. 42; Romer Const. Co. v. Aurora, 81 Mo. App. 572. (6) $200,000 of the monies paid Cook and Lauf by the companies, under the final judgment, was not a part of and did not represent unrefunded excess premium collections and therefore was not subject to the provisions of Section 5874 (72). The superintendent is not entitled to possession of same and said sum was entitled to be administered by the Circuit Court of Cole County, through Cook and Lauf and the moneys paid respondent were entitled to be paid out of or, in equity, charged to said sum, otherwise respondent would be denied due process and equal protection of the law. Sec. 5874, R.S. 1929; Sec. 1, 14th Amendment, U.S. Constitution. The superintendent acts only by virtue of the statutes. State ex rel. v. Dinwiddie, 122 S.W. (2d) 914; State ex rel. v. Hall, 52 S.W. (2d) 174. (7) This court has strictly construed Section 5874. The $857,688.09 interest paid Cook and Lauf under the final judgment (71) is not provided for nor required to be paid the superintendent, and by him paid out, under the terms of Section 5874. That sum came in as the result of a general judgment against the companies and, in equity, is subject to be charged with the amounts paid respondent. To hold otherwise would be read into the statute and final decree what is not there; violate the equitable rights of respondent and deny him due process and equal protection of the law. Sec. 5874, R.S. 1929; Sec. 1, 14th Amendment, U.S. Constitution. The superintendent has no powers except those authorized by statute. State ex rel. v. Dinwiddie, 122 S.W. (2d) 914; State ex rel. v. Hall, 52 S.W. (2d) 174. (8) The evidence shows there is in the possession of appellant approximately $2,000,000 that cannot be returned to the policyholders and that a judgment against respondent would only...