O'Malley v. Wilson

• Decision Date: 11 March 1936
• Docket Number: 10703,10865,10906.
• Citation: 185 S.E. 109,182 Ga. 97
• Parties: O'MALLEY, Superintendent, et al. v. WILSON et al.
• Court: Georgia Supreme Court

185 S.E. 109

182 Ga. 97

O'MALLEY, Superintendent, et al. v. WILSON et al.

Nos. 10703, 10865, 10906.

Supreme Court of Georgia

March 11, 1936

Rehearings Denied March 27 and March 31, 1936.

Syllabus by the Court.

1. In equitable proceedings a judge of the superior court is empowered to consolidate two or more cases, in order to avoid useless consumption of the time of the court and needless expense to the taxpayers. The issuance of an order of consolidation is a matter within the sound legal discretion of the judge, and the exercise of this discretion will not be disturbed, unless manifestly abused. The court's order of consolidation may be so restricted as to confine the joint trial to such matters only as may be referred to the jury and as to which separate and distinct verdicts must be rendered. However, if neither party in the cases to be consolidated offers timely objections to the consolidation it must be assumed that the litigants consented thereto, and they are bound thereby. In these circumstances, the order of the court constitutes a final consolidation, and not a temporary consolidation "for the trial." Unless the judge in his order of consolidation expressly restricts the joinder to a particular purpose specified in his order which requires the rendition of separate verdicts and separate decrees, the consolidation is complete, and the causes involved in the litigation become only one case. Under the principles here announced, the contention urged in the motions to dismiss the three writs of error, on the ground that there should be six, is without merit.

2. The court erred in not sustaining the general demurrers to the petitions of the plaintiffs, and in not dismissing them.

(a) The petitions in case 10703 do not allege that any application was made to the insurance commissioner, or that the same was referred to the insurance commission, or that there was any failure or refusal on the part of these state officers to perform their duty; and since it is provided in the Code 1933, § 56-223, that no suit for receiver can be brought against an insurance company except by the insurance commissioner, the petitions are subject to general demurrer upon the ground that "no cause of action is stated."

(b) The ground of demurrer, which alleges that "the plaintiffs are without judgment lien or title, and have no right to maintain the bill so far as it prays any extraordinary equitable relief," should have been sustained. It appears from paragraph 5 of the petition of the plaintiff Bond, that, "On the 26th day of August, 1933, in the county of the domicile of the defendant, and in the circuit court of said county, there was filed by the Hon. R. E O'Malley, the Insurance Commissioner of the State of Missouri, a bill for receiver and for the dissolution and winding up of the business of the company." In paragraph 6 the petitioner "asks leave to amend this petition by attaching a copy of the proceedings in Missouri, and making same a part of this proceeding." In paragraph 5 of the petition of the plaintiff Wilson it is alleged that: "On or about August 26, 1933, the said Missouri State Life Insurance, defendant herein, being insolvent, was upon the petition of R. E. O'Malley, Insurance Commissioner of the State of Missouri, placed in charge of the said insurance commissioner in an action brought in the circuit court of the State of Missouri in St. Louis, Mo. That the effect of the aforesaid proceeding is that the Missouri State Life Insurance Company has been placed in the hands of the insurance commissioner of the State of Missouri under proceedings provided by the statutes of the State of Missouri for the winding up of insolvent insurance companies." Under the laws of Missouri in the proceeding stated in the petition, the insurance commissioner is vested with full title in fee simple to all the assets of the insurance company which is dissolved. Under the laws of Missouri there is no such office as that of "ancillary receiver" for an insolvent life insurance company. For this reason both grounds 1 and 4 of the general demurrer should have been sustained, though the sustaining of either would have resulted in a dismissal of the action. The court erred in not dismissing the petitions upon general demurrer. This disposes of the questions presented by writ of error No. 10703. It follows that the court erred in rendering the judgments complained of in writs of error 10865 and 10906.

Error from Superior Court, Fulton County; Virlyn B. Moore, Judge.

Consolidated suits by George Harwell Bond and by John R. Wilson against the Missouri State Life Insurance Company, wherein R. E O'Malley, as superintendent of the insurance department, state of Missouri, was substituted as party defendant. To review the judgment, after his motion for a new trial was overruled, defendant brings error.

Reversed.

On August 26, 1933, R. E. O'Malley, as superintendent of the insurance department, state of Missouri, filed a petition in the circuit court of the Eighth judicial circuit of that state, against Missouri State Life Insurance Company, a corporation organized and existing under and by virtue of the laws of the state of Missouri, and alleged that through persons appointed by him, in accordance with the law of said state, to examine into the affairs of the defendant company, he became convinced that the defendant's liabilities exceeded its available assets, and that it was insolvent, rendering further proceedings by the company hazardous to the public and to those holding policies; and he prayed for a decree dissolving the company, and for the appointment of a suitable person to take charge of its affairs. The company admitted it was insolvent. Thereupon, the judge of the Missouri court, on August 28, 1933, rendered the following decree: "Wherefore the court renders and enters its judgment herein, declaring that the defendant company is insolvent and in a hazardous condition. It is further ordered, adjudged, and decreed that all of the assets of the defendant company are vested in fee simple and absolutely in the said R. Emmett O'Malley, as Superintendent of the Insurance Department of the State of Missouri, and his successors in office. The said superintendent shall immediately take possession of said assets, together with all books, papers and records of said company, and shall collect all debts and claims due it, and shall dispose of and sell all assets and settle all claims according to law and under order of the court, and shall settle and wind up the affairs of said defendant company under order of the court with all due and proper expedience, shall prosecute and defend actions in law or equity to protect and preserve the assets formerly held by or due the defendant company; and for all such shall employ counsel and necessary assistants. It is further ordered, adjudged, and decreed that the Missouri State Life Insurance Company, its officers, agents, servants, and employees, immediately deliver possession of all assets of said company, including its books, papers, and records to the said superintendent of insurance; and that said company, its officers, agents, servants, and employees are hereby permanently enjoined from the further prosecution of the business of said company, or from interfering with the possession, administration, and disposition of the assets of said company by the said superintendent of insurance."

On August 28, 1933, two petitions were filed in Fulton superior court against Missouri State Life Insurance Company, one by George Harwell Bond, the other by John R. Wilson; the cases being originally Nos. 99416 and 99417. Bond alleged that he was the owner of a designated policy of insurance for $2,000, issued by the defendant in April, 1923. Wilson alleged that he was the holder of a $3,000 policy, issued in 1909 by Empire Life Insurance Company, which by successive reinsurance was finally reinsured by Missouri State Life Insurance Company on August 25, 1928. While the allegations in the two petitions were not identical, petitioners being represented by separate counsel, in both petitions there were allegations to the effect that proceedings had been instituted in the courts of Missouri to have the affairs of the company wound up because of its insolvency; that the company's assets in this state, both personal and real property, were large; that the insurance policies issued to and held by citizens of this state would aggregate many millions of dollars; and petitioners prayed that the court appoint an ancillary receiver or receivers to take charge of and administer the assets of the defendant company in this state, for the benefit of all citizens of this state who may have claims of any kind against the company. The court, on the day these petitions were filed, passed an order consolidating the cases under the number 99416, and appointed receivers in accordance with the prayers of the petitioners. O'Malley filed a petition reciting the proceedings in the Missouri court, and asking that as superintendent of the insurance department he be substituted as defendant in the place of Missouri State Life Insurance Company. The court so ordered, on September 7, 1933. Later in the same month, O'Malley, as superintendent, etc., amended his petition by setting forth sections 7085 and 7086 of the Revised Statutes of the state of Missouri 1909 (Mo.St.Ann. §§ 5947, 5948, pp. 4534, 4535), which he claimed justified the order and judgment of the Missouri court vesting in him as superintendent of the insurance department of the state of Missouri title to all of the company's assets wherever situated and of whatever kind, and prayed that the receivers appointed in this state be discharged. The statutes thus pleaded are as follows:

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