State ex Inf. McKittrick v. American Colony Ins.

• Decision Date: 07 February 1935
• Docket Number: No. 32771.,32771.
• Parties: STATE OF MISSOURI on information of ROY McKITTRICK, Attorney General, Relator, v. AMERICAN COLONY INSURANCE COMPANY ET AL.
• Court: Missouri Supreme Court

80 S.W.2d 876

STATE OF MISSOURI on information of ROY McKITTRICK, Attorney General, Relator, v. AMERICAN COLONY INSURANCE COMPANY ET AL.

No. 32771.

Supreme Court of Missouri, in Banc.

February 7, 1935.

Quo Warranto.

IT IS ORDERED THAT THE INSURANCE COMPANIES, SEVENTY-ONE IN NUMBER, WHO HAD COLLECTED THE INCREASED RATE BE OUSTED FROM THE PRIVILEGE OF COLLECTING THE INCREASE FILED WITH THE SUPERINTENDENT OF INSURANCE AND THAT THEY PAY THE COSTS OF THE PROCEEDING.

Roy McKittrick, Attorney General, and Gilbert Lamb, Assistant Attorney General, for relator.

(1) Respondents were properly joined in one action. State ex inf. v. Standard Oil Co., 218 Mo. 362; State ex inf. v. Armour Packing Co., 265 Mo. 149; 51 C.J., sec. 49, p. 340, sec. 50, p. 341; Secs. 702, 703, R.S. 1929; Aetna Fire Ins. Co. v. Shanks, 14 Fed. (2d) 694; State ex inf. v. Arkansas Lumber Co., 260 Mo. 283. (2) The right of the respondents to transact insurance business in this State, under their licenses, is subject to all of the laws of this State that have heretofore or may hereafter be enacted and quo warranto will lie for abuse of their rights thereunder. The respondents transact their business in this State by grace and not by right. Clark v. Ry. Co., 319 Mo. 874; State ex rel. v. Blake, 241 Mo. 106; Chicago, M. & St. P. Railroad Co. v. State of Minnesota, 134 U.S. 455, 33 L. Ed. 979; State ex inf. v. Firemen's Fund Ins. Co., 152 Mo. 1; State v. American Can Co., 4 S.W. (2d) 455; State v. Bank, 297 Mo. 397, 249 S.W. 624; State ex inf. v. Standard Oil Co., 218 Mo. 352; State ex inf. v. Delmar Jockey Club, 200 Mo. 70. (3) The fact that respondents may be amenable to certain statutory penalties such as fines, revocation of licenses, etc., for violation of the insurance laws is no defense to this case. State ex inf. v. Delmar Jockey Club, 200 Mo. 51; Capital City Dairy Co. v. Ohio, 183 U.S. 238, 51 L.R.A. (N.S.) 1126. (4) The abuse of rights and privileges by respondents is sufficiently grave to justify quo warranto. (5) This action brought by the State of Missouri is not barred by the alleged laches of any state official, nor is the State estopped on account of the acts or conduct of any of its officers. Marion County v. Moffett, 15 Mo. 405; State ex inf. Atty. General v. School District, 314 Mo. 329; People v. Palace Car Co., 51 N.E. 664; Hecker v. Bleish, 319 Mo. 173; Buck v. Kuykendall, 267 U.S. 307. (6) The review suit pending in the Circuit Court of Cole County, Missouri, filed June 5, 1930, is not a bar to the prosecution of this action by quo warranto. Long v. Coal & Iron Co., 233 Mo. 735; Rookery v. Loan & Inv. Co., 294 Mo. 461; Pocoke v. Peterson, 256 Mo. 501; State ex inf. v. Arkansas Lumber Co., 260 Mo. 270; State ex rel. v. Social Club, 169 Mo. App. 137; Sec. 5873, R.S. 1929; Aetna Ins. Co. v. Hyde, 315 Mo. 113, 275 U.S. 440, 281 U.S. 331. (7) Respondents must disclaim or justify the acts charged against them. State ex inf. v. Standard Oil Co., 218 Mo. 364; State ex rel. v. Road Co., 37 Mo. App. 504; State ex inf. v. Ry. Co., 206 Mo. 40. (8) The order of the superintendent as of May 28, 1930, was not a reduction order. State ex rel. Hyde v. Westhues, 316 Mo. 470, 290 S.W. 443; Secs. 5860, 5864, 5873, 5874, R.S. 1929; State ex rel. v. Clark, 275 Mo. 103. (9) The Circuit Court of Cole County did not have the authority, inherent or otherwise, to make the impounding order of June 5, 1930, and the order was and is void. Secs. 5864, 5874, R.S. 1929; North British & Mercantile Ins. Co. v. Thompson, 52 S.W. (2d) 476; State ex rel. v. Becker, 233 S.W. 645; International Ry. v. Prendergast, 52 Fed. (2d) 298; Gilchrist v. Interborough Co., 279 U.S. 207; Galveston Elec. Co. v. Galveston, 258 U.S. 403; United Gas Co. v. Railroad Comm., 278 U.S. 300; Railroad v. Garrett, 231 U.S. 310, 58 L. Ed. 241. (10) Respondents transact their business in this State by grace and cannot question the statutory rules laid down for their regulation. State ex rel. Waterworth and Terry v. Harty, 213 S.W. 446; German Alliance Ins. Co. v. Kansas, 233 U.S. 389, 58 L. Ed. 1011; State v. Pub. Serv. Comm., 204 S.W. 499. (11) Due process; constitutionality of the rating act and right to evidence of confiscation. State ex inf. v. Firemen's Fund Ins. Co., 152 Mo. 38; State ex rel. Waterworth and Terry v. Harty, 278 Mo. 694; Horton v. Clark, 293 S.W. 365; Railroad v. Transbarger, 238 U.S. 78; Pierce Oil Co. v. Refining Co., 190 Pac. 857; Trenton v. Trenton, 227 Fed. 505; Watson v. Ry. Co., 169 Fed. 948, 223 U.S. 745; Telegraph & Telephone Co. v. Railroad Co., 287 Fed. 406; Munn v. Illinois, 94 U.S. 132; Backtel v. Wilson, 204 U.S. 36; Railroad v. Garrett, 231 U.S. 310, 58 L. Ed. 241; State ex rel. v. Harty, 275 Mo. 59.

Robert J. Folonie, E.R. Morrison and Homer Berger for respondents; Ragland, Otto & Potter and Igoe, Carroll, Higgs & Keefe of counsel.

(1) The petition herein should be dismissed because it does not properly lie as a joint procedure. Aetna Fire Ins. Co. v. Shanks, 14 Fed. (2d) 690; King v. Warlow, 2 Maule & Selwyn's Rep. (1813-1814), 75. (2) The petition by the Attorney General in the guise of a public action does not lie respecting this controversy which involves only private rights. State ex inf. v. Ry. Co., 176 Mo. 709; State ex rel. Barker v. Railroad Co., 265 Mo. 646; Attorney General v. Salem, 103 Mass. 138; People v. Commissioners, 31 Ill. App. 219; People ex rel. v. Cooper, 139 Ill. 486. (3) It is conceded by relator that this court has no power to determine any issue of confiscation. As it is uncontradictedly shown that confiscation is an issue in the circuit court and that respondents are entitled to a determination of that issue the present proceeding must be dismissed. The granting of the writ will deprive respondents of their property without due process of law in violation of the Fourteenth Amendment of the Constitution of the United States. State ex rel. v. Harty, 275 Mo. 59; State ex inf. Crow v. Ry. Co., 176 Mo. 716; Augusta Ry. & Elec. Corp. v. Railroad Comm. of S.C., 281 Fed. 977; Porter v. Investors Syndicate, 286 U.S. 461; Oklahoma Natl. Gas Co. v. Russell, 261 U.S. 290, 67 L. Ed. 659; Pacific Teleph. & Teleg. Co. v. Kuykendall, 265 U.S. 196, 68 L. Ed. 975; Springfield Gas & Electric Co. v. Barker, 231 Fed. 331; Smith v. Illinois Bell Tel. Co., 270 U.S. 587, 70 L. Ed. 747; Love v. Ry. Co., 185 Fed. 321; Cumberland Tel. & Tel. Co. v. Railroad & Public Utilities Comm., 287 Fed. 406. (4) The acts of respondents are justified by law and by orders of the Circuit Court of Cole County. It had power to make such orders and justify the conduct of the respondents. R.S. 1929, sec. 645; Lindell v. McNair, 4 Mo. 380; Brandon v. Carter, 119 Mo. 572; State v. Rader, 262 Mo. 129; R.S. 1929, sec. 5874; State v. Westhues, 316 Mo. 457. (a) The circuit court had plenary power upon the filing of a review petition to modify or restrict the effect of the order of the superintendent pendente lite. Sec. 5874, R.S. 1929; State ex rel. v. Westhues, 316 Mo. 457; State ex rel. Waterworth v. Harty, 278 Mo. 685. (b) The statutory grant of an appeal to the circuit court, in the nature of a bill in equity to accomplish an appeal, vacated the order of the superintendent. 2 Encyclopaedia of Pleading & Practice, 327; Dutcher v. Culver, 23 Minn. 415; Rogers v. Hatch, 8 Nev. 39; Sherman v. Dilley, 3 Nev. 21; Curtis v. Beardsley, 15 Conn. 518; Campbell v. Howard, 5 Mass. 376. (c) The expression by the Legislature of an intent that the appeal would create a de novo hearing was operative upon filing of review suit to remove the entire controversy to the circuit court for any necessary or desirable action. 2 Encyclopaedia of Pleading & Practice, 31; Wiscart v. Dauchy, 3 Dall. 320; Hudson v. Smith, 9 Wis. 122; Hart v. The Mayor, 3 Paige, 381; Yeaton v. United States, 5 Cranch, 281; 3 C.J. 314. (d) Appeals in chancery are adopted from the civil law and have the attributes of creating a supersedeas or authorizing the granting of such relief on motion. Lockhart v. McElroy, 4 Ala. 572. (e) The practice corresponds to that in admiralty which is adopted from the civil law as is done in chancery practice. Yeaton v. United States, 5 Cranch, 281. (f) The order of the circuit court was justified by inherent powers of that court to accomplish equity. Polini v. Gray, 12 Law Rep. Ch. Div. 438; 3 C.J., sec. 1394, p. 1272; Parker v. Railroad Co., 44 Mo. 415; 9 Bacon's Abridgment, 275; United States v. Ritchie, 17 Howard, 525; Mo. Pac. Ry. Co. v. Atkinson, 17 Mo. App. 484; Union Depot Railroad Co. v. Ry. Co., 16 S.W. 920, 105 Mo. 562; Grand Ave. Ry. Co. v. Ry. Co., 50 S.W. 303; 3 C.J. 1286; Genet v. D. & H. Co., 113 N.Y. 472; Fleischman v. Mengis, 118 N.Y. Supp. 671; Hovey v. McDonald, 109 U.S. 161; Slaughter House Cases, 10 Wall. 273; Merrimack River Savs. Bank v. Clay Center, 219 U.S. 527; Levy v. Goldberg, 40 Wis. 308; In re Epley, 10 Okla. 631; Home Fire Ins. Co. v. Dutcher, 67 N.W. 766, 48 Neb. 755; Penn. Mut. Life Ins. Co. v. Creighton Theatre Bldg. Co., 71 N.W. 279; Hudson v. Smith, 9 Wis. 122; Smith v. Reid, 244 N.W. 81; Doughty v. Railroad Co., 3 Hal. Ch. 629, 51 Am. Dec. 267; Union Pac. Railroad Co. v. Railroad Co., 10 Pac. (2d) 893; Pennsylvania Railroad Co. v. Ry. Co., 54 N.J. Eq. 647; City of Janesville v. Janesville Water Co., 89 Wis. 159; American Brewing Co. v. Talbot, 135 Mo. 170; Ex parte Woods, 3 Ark. 532; Davis v. Tarwater, 13 Ark. 52; American Surety Co. v. Marsh, 146 Okla. 261; Gandy v. Nebraska, 10 Neb. 243; Hart & Hoyt v. Mayor of Albany, 3 Paige Ch. Rep. 381; Burke v. Brown, 15 Vesey, 184; Central Natl. Bank v. Guthrie, 83 Kan. 630; In re Pye, 21 App. Div. 267; Ringgold's Case, 1 Bland's Ch. Rep. 14; State ex rel. v. Dearing, 180 Mo. 53; Dallas v. Wright, 36 S.W. (2d) 973. (5) Insurance companies have the power as against an unreasonably low rate level which furnishes them no compensation whatever to put their own rates in force if the superintendent refuses to...