State ex rel. Carwood Realty Co. v. Dinwiddie

• Decision Date: 20 December 1938
• Docket Number: 36210
• Citation: 122 S.W.2d 912,343 Mo. 592
• Parties: State of Missouri at the relation of Carwood Realty Company, a Corporation, Meryl Realty & Investment Company, a Corporation, and Charles H. Hart, Trustee for Albert Wenzlick Real Estate Company, a Corporation, Relators, v. W. M. Dinwiddie, Judge of the Circuit Court of Boone County, in the Thirty-fourth Judicial Circuit
• Court: Missouri Supreme Court

122 S.W.2d 912

343 Mo. 592

State of Missouri at the relation of Carwood Realty Company, a Corporation, Meryl Realty & Investment Company, a Corporation, and Charles H. Hart, Trustee for Albert Wenzlick Real Estate Company, a Corporation, Relators, v. W. M. Dinwiddie, Judge of the Circuit Court of Boone County, in the Thirty-fourth Judicial Circuit

No. 36210

Supreme Court of Missouri

December 20, 1938

Alternative writ of prohibition made absolute.

Cobbs Logan, Roos & Armstrong for relators.

(1) Attorneys employed by the Superintendent of Insurance of the State of Missouri and who rendered services during the course of the "impound litigation" have no claim to interest in, or liens upon the funds impounded. Aetna Ins. Co. v. O'Malley, Supt. of the Insurance Dept Nos. 35,568, 35,569 of this Court (not yet reported). These attorneys should be compensated if entitled thereto by the Insurance Department as an expense of that department in the manner provided by statute. Secs. 5679, 5686, 5688, R. S. 1929. (2) The impounded funds may not be charged with the costs and expenses of distribution and should be returned without reduction therefor to the policyholders. (a) The expense of distribution is an expense of administering the insurance laws of the State of Missouri and should be paid, as provided by statute, as an expense of the Insurance Department. State ex rel. Mo. State Life Ins. Co. v. Hall, 330 Mo. 1107, 52 S.W.2d 174; State ex rel. St. Louis Mut. Life Ins. Co. v. Mulloy, 330 Mo. 951, 52 S.W.2d 469; Aetna Life Insurance Co. v. O'Malley et al., Causes Nos. 35,568 and 35,569 of this Court (not yet reported); Secs. 5679, 5686, 5688, R. S. 1929. (b) Equity requires that this court rule that the cost of distributing this fund is an expense of the Insurance Department within the contemplation of the Insurance Code. These funds were impounded without warrant or authority of law and in violation of law and hence the cost of restitution should be borne by the Insurance Department. State ex inf. McKittrick v. American Colony Ins. Co., 80 S.W.2d 876; State ex rel. Thompson v. Sevier, 80 S.W.2d 893; American Constitution Fire Ins. Co. v. O'Malley, 113 S.W.2d 795; State ex rel. Robertson v. Sevier, 115 S.W.2d 810. (c) The impounded fund may not be charged with the costs of distribution under the principles of common law. The collection and impounding of said fund amounted to a common-law conversion of the policyholders' money. Allen v. McMonagle, 77 Mo. 478; Williams v. Wall, 60 Mo. 318; State v. Berning, 74 Mo. 87; Milne Lbr. Co. v. Michigan Cent. Ry. Co., 57 S.W.2d 732. The impounding of said funds was nonetheless a conversion because the acts were performed by a public official. Burk v. Baxter, 3 Mo. 207; State ex rel. Sproleder v. Staed, 65 Mo.App. 487; State ex rel. Webb v. King, 73 S.W.2d 460; 65 C. J., sec. 42, p. 33. A converter may not charge the cost of restoring to the true owner the property converted. (3) No principle of equity sustains the jurisdiction of the circuit court of Boone County in the suit here sought to be prohibited. (a) The bill below may not be sustained upon any of the following grounds: As a petition of a fiduciary for directions. As an action quia timet up the principles of interpleader, or to quiet title to personal property, as there is no adverse claim or dispute relating to the same fund, debt, duty or thing. Haydens, Executor, v. Marmaduke, 19 Mo. 403; State ex rel. St. Louis Cooperage Co. v. Green, 92 S.W.2d 930; Little v. St. Louis Union Trust Co., 197 Mo. 281; Board of Supervisors of Saratoga County v. Deyoe, 77 N.Y. 219. (b) To summon all claimants into the Circuit Court of Boone County, either individually or by class representation, would constitute a misjoinder of parties defendant. Sec. 701, R. S. 1929; Tucker v. Tucker, 29 Mo. 350; Lewis v. Hargadine-McKittrick D. G. Co., 305 Mo. 396, 274 S.W. 1041; Fulton v. Fisher, 239 Mo. 116; Repetto v. Walton, 314 Mo. 182, 281 S.W. 411; State ex rel. Songer v. Fid. & Dep. Co., 53 S.W.2d 1036. (c) The bill below may not be sustained on the ground that it will avoid circuity of action or multiplicity of suits. Ballew Lbr. & Hardware Co. v. Mo. Pac. Ry. Co., 288 Mo. 473, 232 S.W. 1015; Tribette v. Ill. Cent., 70 Miss. 182, 12 So. 32; Southern Michigan Lbr. Co. v. McDonald, 57 Mich. 292, 24 N.W. 87. (d) The bill below may not be sustained as an action for a declaratory judgment. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 81 L.Ed. 617.

Roy McKittrick, Attorney General, Drake Watson, Harry Kay, J. E. Taylor and J. W. Buffington Assistant Attorneys General, Charles L. Henson, Walker Pierce and William G. Chorn for Superintendent of Insurance Department, amici curiae.

(1) The Attorney General under the Constitution and statutes of this State, and under the common law, is the only person authorized to institute a suit on behalf of the Superintendent of the Insurance Department. (2) The Superintendent of the Insurance Department is the statutory custodian of the impounded funds mentioned in his petition. (3) The circuit court has no jurisdiction over the Superintendent of Insurance in the distribution of the impounded funds. (4) The Superintendent of Insurance has no express or implied authority to bring the action now pending in this court. (5) This court has no authority to direct or authorize payment of any part of the expenses of the Insurance Department of the impounded funds. (6) No justifiable controversy is stated in the petition, but the petition is merely a request for advice from this court as to how to carry out certain duties.

OPINION

Tipton, C. J.

Prohibition. Relators seek to prohibit the respondent, judge of the Circuit Court of Boone County, Missouri, from acting upon a petition filed in that court by George A. S. Robertson, Superintendent of the Insurance Department of this State, wherein he seeks the aid and directions of that court in the distribution to the policyholders of funds created during the pendency of the case of American Constitution Fire Assurance Co. et al. v. O'Malley, commonly known in this State as the 16 2/3 per cent increase rate case. This case is reported in 342 Mo. 139, 113 S.W.2d 795, and there a history of this litigation may be found. We held in that case that ". . . the judgment should be and is affirmed, and cause remanded, with directions to the trial court to immediately return said funds from the registry of the court to the Superintendent of Insurance, the lawful custodian thereof, for distribution by him to the policyholders."

When the mandate in that case reached the circuit court, it entered a judgment turning over the funds to the Superintendent of the Insurance Department but retained jurisdiction of the cause for the purpose of passing upon all claims made against the funds and to control and supervise the distribution of the funds. As the result of such judgment, the case of State ex rel. Robertson, Superintendent of Insurance Department, v. Sevier, 342 Mo. 346, 115 S.W.2d 810, was brought, and in that case we held that that court did not have jurisdiction to enter such judgment, but only had jurisdiction to dismiss the plaintiff's cause and to turn over to the Superintendent of the Insurance Department the impounded funds to be returned by him to the policyholders.

Briefly, the petition in question asks the Circuit Court of Boone County to aid the Superintendent of Insurance in distributing to the policyholders these impounded funds by passing upon all claims made against the funds, and to supervise their distribution. If the Circuit Court of Cole County was without jurisdiction to pass upon all claims made against the funds and to supervise the distribution, it seems to the writer of this opinion that the Circuit Court of Boone County would be without jurisdiction to do the same thing.

In the case of State ex rel. Missouri State Life Ins. Co. v Hall, 330 Mo. 1107, 52 S.W.2d 174, l. c. 177, we sa...