Moss v. Kansas City Life Ins. Co.

• Citation: 96 F.2d 108
• Decision Date: 09 April 1938
• Docket Number: No. 10881.,10881.
• Parties: MOSS et al. v. KANSAS CITY LIFE INS. CO. et al.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

96 F.2d 108 (1938)

MOSS et al. v. KANSAS CITY LIFE INS. CO. et al.

No. 10881.

Circuit Court of Appeals, Eighth Circuit.

April 9, 1938.

Kent V. Gay, of St. Louis, Mo., for appellants.

Fred L. English, of St. Louis, Mo. (Frank W. McAllister and Stanley Bassett, both of Kansas City, Mo., and Fred L. Williams and Earl F. Nelson, both of St. Louis, Mo., on the brief), for appellee Kansas City Life Ins. Co.

Frank P. Aschemeyer, of St. Louis, Mo. (James P. Aylward, of Kansas City, Mo., and James A. Waechter, of St. Louis, Mo., on the brief), for appellee R. Emmet O'Malley.

Before STONE, WOODROUGH, and VAN VALKENBURGH, Circuit Judges.

STONE, Circuit Judge.

This is an action in equity brought by various nonresident policyholders of the Continental Life Insurance Company (a Missouri corporation) against that company, the Kansas City Life Insurance Company, R. Emmet O'Malley, superintendent of the insurance department of the state of Missouri, and the officers and directors of the Continental Life Insurance Company. An outline of the petition is as follows: That defendant R. Emmet O'Malley heretofore petitioned the circuit court for the city of St. Louis, Mo., for authority to take over the assets and business of said Continental Life Insurance Company for the reason that said company was insolvent; that to substantiate his allegations of insolvency and to secure control of and possession of the business and assets of the Continental Life Insurance Company, said O'Malley, as such superintendent, knowingly and willfully represented to the circuit court for the city of St. Louis that the value of the assets of said company was much less than their true value, and knowingly and willfully represented to said court that the liabilities of that company were much greater than its actual liabilities; that such misrepresentation was for the purpose of retaining possession of and control of the assets and business of said Continental Life Insurance Company and for the further purpose of assigning and transferring said assets and business to defendant Kansas City Life Insurance Company; that defendant Kansas City Life Insurance Company had knowledge of above misrepresentations; and that thereafter defendant O'Malley transferred and assigned all of the assets and business of said Continental Life Insurance Company to defendant Kansas City Life Insurance Company, except the sum of $225,000, which sum was retained by said O'Malley. The prayer was for a receiver, an accounting, and that upon final determination of the cause the assets and business of the Continental Life Insurance Company be returned to it, and that that company be reorganized under the orders of the court.

Upon motion of plaintiffs, dismissal was had as to the officers and directors of the Continental. The three remaining defendants, specially appearing, filed separate motions to quash service. A common ground stated in each motion was lack of venue because the only named resident defendant was the Continental and it had been dissolved by a decree in the state court before this action was brought. Another ground stated in the motion by O'Malley was that the suit against him was purely in his capacity as a state official and, therefore, was a suit against the state of Missouri without its consent.

The trial court sustained the motions to quash, and, plaintiffs standing upon the service, the cause was dismissed without prejudice. From that decree, plaintiffs appeal.

Motion to Dismiss Appeal.

Before we can enter upon consideration of the merits of this appeal, we must determine a joint motion of O'Malley and the Kansas City Life Insurance Company to dismiss the appeal as being out of time. The record upon this matter is as follows. Appellees O'Malley and Kansas City Life Insurance Company filed their separate motions to quash which were sustained on October 28, 1936. On November 24, 1936, the Continental filed a motion to quash service upon it on the ground that it had been dissolved. This motion was sustained on January 6, 1937. On February 9, 1937, the cause was dismissed. On February 10, 1937, this appeal was allowed from the order of dismissal.

The ground stated in the motion is that the order of October 28, 1936, sustaining the motions of these two appellees was a final appealable order and no appeal therefrom was allowed within three months thereafter.

In Rosenberg Bros. & Co., Inc., v. Curtis Brown Co., 260 U.S. 516, 517, 43 S.Ct. 170, 67 L.Ed. 372, it was squarely held that an order quashing service on the defendant was a final appealable order. Also see Goldey v. Morning News, 156 U.S. 518, 15 S.Ct. 559, 39 L.Ed. 517.¹ In The Pesaro, 255 U.S. 216, 217, 41 S.Ct. 308, 65 L.Ed. 592, is a similar holding in an admiralty case involving libel of a vessel where it was held that an order for the release of the vessel because the property of a foreign nation was appealable. Apparently, the basis of these rulings is that the jurisdiction to render judgment against the defendant is a character of question which possesses finality for appeal purposes.

However, in each of these three cases the orders covered the only defendant or the only libeled vessel, so that the result was that there could never be any recovery against anyone if the order quashing service stood. Here, the order quashing service as to O'Malley and the Kansas City Life Insurance Company did not dispose of all of the defendants but left the Continental Life Insurance Company — its motion not being filed until later and not sustained until January 6, 1937. Were it not for this situation, the above cases would govern and this appeal would be dismissed. It remains to consider whether these cases govern in this situation.

The broad general rule as to finality of orders, decrees, or judgments (absent specific statutory provisions, such as section 227, title 28, U.S.C.A.) is that a case cannot be reviewed "in fragments" but that the order, decree, or judgment must be "not only final, but complete." Collins v. Miller, 252 U.S. 364, 370, 40 S.Ct. 347, 349, 64 L.Ed. 616; Arnold v. United States, 263 U.S. 427, 434, 44 S.Ct. 144, 147, 68 L.Ed. 371; and see Berman v. United States, 302 U.S. 211, 58 S.Ct. 164, 82 L. Ed. ___, decided December 6, 1937. This means that such order, decree, or judgment "should be final not only as to all the parties, but as to the whole subject-matter and as to all the causes of action involved." 252 U.S. 364, at page 370, 40 S.Ct. 347, 349, 64 L.Ed. 616. As to finality in so far as it affects the parties to an action — as distinguished from subject matter — the just stated rule has been applied where a demurrer was sustained as to one of several defendants (Mendenhall v. Hall, 134 U.S. 559, 10 S.Ct. 616, 33 L. Ed. 1012; Electric Protection Co. v. American Bank Protection Co., 8 Cir., 184 F. 916, 924; Lockhart v. New York Life Ins. Co., 4 Cir., 71 F.2d 684; Bush v. Leach, 2 Cir., 22 F.2d 296; Hewitt v. Chas. R. McCormick Lumber Co., 2 Cir., 22 F.2d 925; Herrup v. Stoneham, 2 Cir., 15 F.2d 49), and where there has been involuntary dismissal as to one of several parties (Hohorst v. Hamburg-American Packet Co., 148 U.S. 262, 13 S.Ct. 590, 37 L.Ed. 443, and see Oneida Navigation Corporation v. W. & S. Job & Co., 252 U.S. 521, 40 S.Ct. 357, 64 L.Ed. 697).

A case somewhat analogous to the one here is Shaw v. Quincy Mining Co., 145 U.S. 444, 12 S.Ct. 935, 36 L.Ed. 768, as explained in Hohorst v. Hamburg-American Packet Co., 148 U.S. 262, at page 266, 13 S.Ct. 590, 37 L.Ed. 443. The Shaw Case was a mandamus proceeding to direct the Circuit Court to take jurisdiction over the Quincy Mining Company after the Circuit Court had set aside the service on that company. The company was one of several defendants in the suit. The Supreme Court retained jurisdiction and determined the question, which was whether the company was a resident within the district where the action was brought so as to be subject to service therein. In the Hohorst Case (at page 266 of 148 U.S., 13 S.Ct. 590, 591, 37 L.Ed. 443), speaking of the Shaw Case, the court said: "The ground on which our jurisdiction was invoked was the inadequacy of any other remedy, and it was argued that, as the cause could proceed as to the other defendants, no final judgment could be entered upon the order of the circuit court, and no appeal taken therefrom."

Considering the rules announced in the above cases, it would seem that the application of the above rule announced in the Rosenberg, Pesaro and Goldey Cases should be limited to cases in which the void service of process attaches to all of the defendants. So construed, the rule is harmonious with the broad general rule that for an order, decree, or judgment to be final for appeal purposes such must completely dispose of the action. Berman v. United States, 302 U.S. 211, 58 S.Ct. 164, 82 L.Ed. ___, decided December 6, 1937.¹

It is true here that the quashing of service as to O'Malley and the Kansas City Life Insurance Company upon the ground stated in the opinion sustaining the motions would naturally result in a similar ruling as to the Continental, but no such ruling had been made as to that company and it was still a party defendant in court. Until the case was disposed of as to it there was lacking that "complete" disposition as to all parties required to present an appealable order. In Heike v. United States, 217 U.S. 423, 430, 30 S.Ct. 539, 541, 54 L.Ed. 821, the court said: "It is true that, in a certain sense, an order concerning a controlling question of law made in a case is, as to that question, final. Many interlocutory rulings and orders effectually dispose of some matters in controversy, but that is not the test of finality for the purposes of appeal or writ of error. The purpose of the statute is to give a review in one proceeding after final judgment of matters in controversy in any given case. Any contrary construction of the court of appeals act may involve...