Nugent v. Robertson

• Decision Date: 20 June 1921
• Docket Number: 21912
• Citation: Nugent v. Robertson, 88 So. 895, 126 Miss. 419 (Miss. 1921)
• Parties: NUGENT & PULLEN v. ROBERTSON, State Revenue Agent
• Court: Mississippi Supreme Court

88 So. 895

126 Miss. 419

NUGENT & PULLEN v. ROBERTSON, State Revenue Agent

No. 21912

Supreme Court of Mississippi

June 20, 1921

1. LIMITATION OF ACTION. Monopolies. State revenue agent's suit for penalties for violating Anti-Trust Statutes not barred by one-year statute of limitations; suits for penalties for violating Anti-Trust Statutes are "civil suits."

A suit by the State Revenue Agent for the use of the state for penalties for violating the Anti-Trust Statutes is not barred by the one-year statute for the recovery of penalties provided by section 3101, Code 1906 (section 2465 Hemingway's Code), since by section 104 of the Constitution the statutes of limitation in civil actions do not run against the state, nor subdivisions, or municipal corporations thereof. The right of action is in the state and not in the officer suing for the state, and suits for penalties in such cases are civil suits.

2. CONSTITUTIONAL LAW. Monopolies. Anti-Trust Law not suspended by Lever Act; enforcement held not to deprive insurance companies of equal protection of law nor of property without due process.

The provisions of chapter 145, Code of 1906, and amendments thereto (chapter 69, Hemingway's Code), are not suspended by Act Cong. Aug. 10, 1917, commonly called the Lever Act (U S. Comp. St. 1918, U.S. Comp. St. Ann. Supp. 1919, sections 3115$1/8e-3115$1/8kk, 3115$1/8$1-3115$1/8r), even if this act is valid, and the enforcement of the provisions of the said Anti-Trust Act against insurance companies does not deprive them of the equal protection of the law, nor deprive them of property without due process of law.

3 MONOPOLIES. Insurance agents held not entitled to retain funds of principals against state.

Where an attachment in chancery is sued out by the state under the provisions of section 536, Code of 1906 (section 293, Hemingway's Code), against certain insurance companies for penalties for violating the Anti-Trust Statutes, in which the agents resident in the state are made defendants, and effects in their hands impounded by the suit, such agents cannot defend the suit on the ground that they have been injured in their business by the acts of their principal, and that they are entitled to retain the said effects by way of recoupment, where their answer denies, on information and belief, that the insurance companies have violated such law, and where no demand or suit is pending against their principals, and where the answer is not made a cross-bill against the insurance companies, nor any relief sought by cross-bill against such insurance companies.

4. CORPORATIONS. Monopolies. Funds of nonresident corporations violating Anti-Trust Law are subject to attachment in hands of resident agents.

Where a suit is filed by the state against nonresident corporations for penalties for violating the Anti-Trust Statutes and resident agents of such companies are made defendants, and have effects of the nonresidents in their possession or under their control, they cannot defend on the ground that such funds are trust funds, and not debts due their principals. If the funds which they hold belong to the nonresidents, they are subject to attachment and garnishment.

ANDERSON and SYKES, JJ., dissenting.

HON. V. J. STRICKLER, Chancellor.

APPEAL from chancery court of Hinds county, HON. V. J. STRICKLER, Chancellor.

Proceedings by Stokes V. Robertson, State Revenue Agent, against Nugent & Pullen. Judgment for plaintiff, and defendant appeals. Affirmed.

Judgment affirmed.

Green & Green, for appellant.

Clayton D. Potter and Chalmers Potter, for appellee.

ETHRIDGE J. ANDERSON and SYKES, JJ., dissent.

OPINION

ETHRIDGE, J.

The appellant was one of the resident defendants, being an agent of some of the insurance companies in the suit of Aetna Insurance Co. v. Stokes V. Robertson, State Revenue Agent, 88 So. 883, this day decided, and was made a defendant for the purpose principally of subjecting moneys, debts and effects of the insurance companies for which it was agent to the demand of the state in that suit. The pleadings on the part of the revenue agent and the insurance companies are sufficiently set forth in the suit just decided, Aetna Insurance Co. v. Stokes V. Robertson, State Revenue Agent, and will be referred to here as to the pleading on the part of the revenue agent and of the insurance companies.

The appellant in this case filed an original answer, in which he denied the principal allegations of the bill along the lines of the denial of the Aetna Insurance Company et al., setting forth the various contentions as set forth in substance by the nonresident defendants, and then answered further as follows:

"And now further answering, this defendant says that at the time of the service of process on him in this case that he was not indebted to any of said nonresident defendant companies, but defendant says that upon the day of the service upon him he was acting as local agent for the following named nonresident companies:

Alliance Ins. Co., Philadelphia, Pa

$ 467.97

Connecticut Fire Ins. Co., Hartford, Conn

211,27

Federal Ins. Co., New Jersey

564.33

Fireman's Fund Ins. Co., San Francisco

619.26

New Zealand Ins. Co., New Zealand

110.21

Niagara Fire Ins. Co., New York

512.32

North British & Merc. Ins. Co., England

972.26

Phoenix Ins. Co., Hartford

527.18

Royal Ins. Co. (Ga. Fire Ins.), England

648.45

Star Ins. Co., America

201.84

Westchester Fire Ins. Co., New York

735.25

[126 Miss. 422] --and that he had in his custody the amount of premiums belonging to the said nonresident insurance companies as are given opposite the name of the companies above. This defendant says that said funds came into his possession and control as agent and employee of said defendants, and that he now holds the same in trust, and as trustee for the said defendants, in the amounts hereinbefore set out. This defendant denies that the funds that he holds as agent for such companies, and of which he is trustee and agent for said companies, are liable to garnishment in his hands in the suit of the complainant against the nonresident insurance companies. Defendant denies that he had in his hands at the time of the service of the writ in this suit any moneys, choses in action, property or effects of said companies, except some stationery and expiration books, and a few office supplies of little or no value."

This answer was sworn to, and after the answer was filed the application for receivers was made, as stated in the opinion in the case of Aetna Insurance Co. v. Stokes V. Robertson, State Revenue Agent, 88 So. 883, this day decided, and receivers were appointed, which said receivers accepted the trust and qualified. An application was made by the receivers for an order requiring the resident agents of the insurance companies to turn over immediately the funds in their possession to the said receivers, and to remit to the said receivers moneys thereafter collected. Thereupon the appellant amended his answer so as to deny any indebtedness to the several companies, and in the amended answer denied the general allegations of the bill as in the original answer as to the allegations that there was a conspiracy or agreement, in violation of the antitrust laws, made and entered into by the insurance companies; and also denied that the insurance companies had permitted the Mississippi Inspection and Advisory Rating Bureau to manage or control or fixe the rates, substantially in the same form as the principal defendants had answered. Then the appellant set up in this answer an allegation that on the 10th day of August, 1917, the United States, being at war with Germany, passed an act controlling the production and distribution of food products and fuel, commonly called the Lever Act, and that the effect of this act was to displace and annul the anti-trust laws of the state of Mississippi. The bill sets forth some of the general features of the act, and alleges that the president, acting thereunder, made divers proclamations, and that under the act and the president's proclamation the entire resources of the United States were marshaled and co-ordinated, and prices fixed by the government through supervision and in the manner and form required by the government and in the territory demanded by the general welfare as determined by the federal authorities. That by reason of the said Lever Act the said anti-trust laws were annulled and superseded, and, if the Lever Act did not totally displace the said statute, that it took from the said statute such businesses and elements as would make it a violation of the due process and equal protection clauses of the federal Constitution, and that to enforce the antitrust statute as to insurance against defendants would be to deny them the equal protection of law and take their property without due process of law.

It is further alleged in the amended answer that, if the averments of the bill are true, the defendants were engaged in the commission of a felony, and that under the terms of the statute the contract entered into between the agent and the insurance companies are void, and that the insurance companies cannot collect from the agent their effects, and that the state could not collect from the agents, because its right to collect from the agents is derived from the right of the insurance company to collect from the agents.

It is further alleged that it is in violation of the public policy to enforce the payment of such funds under such circumstances.

It is further averred that, if the allegations of the bill are true, the respondent would be discharged from its liability to pay; that there can exist no garnishable debt, because such debt is predicated upon a violation of law. The...