State ex rel. Hyde v. Westhues

• Decision Date: 24 January 1927
• Docket Number: 25250
• Parties: The State ex rel. Ben C. Hyde, Superintendent of Insurance Department, v. Henry J. Westhues, Judge of Circuit Court of Cole County
• Court: Missouri Supreme Court

290 S.W. 443

316 Mo. 457

The State ex rel. Ben C. Hyde, Superintendent of Insurance Department, v. Henry J. Westhues, Judge of Circuit Court of Cole County

No. 25250

Supreme Court of Missouri

January 24, 1927

Motion for Rehearing Denied January 24, 1927.

Provisional rule made absolute.

John T. Barker and Floyd E. Jacobs for relator.

(1) The laws compel the Superintendent to make orders regarding fire insurance rates; it was therefore beyond the power of the circuit court to interfere by injunction with the legislative or discretionary power vested by authority of law in him. State ex rel. v. Stone, 120 Mo. 428; State ex rel. v. Harty, 278 Mo. 685; State v. Court, 168 N.W. 634; In re Sawyer, 124 U.S. 200; Cambria v Bachmann, 118 S.E. 336; In re Turner, 119 F 231; Milhau v. Sharp, 15 Barb. 227; Mass. v Mellon, 262 U.S. 447; Snelling v. Whitehead, 269 F. 714; Bowles v. Kinney, 292 F. 422; People v. Barrett, 203 Ill. 104; Ex parte Hudgings, 249 U.S. 378; State ex rel. v. Milligan, 3 Wash. 144; Tebbetts v. People, 31 Colo. 461; United States v. Railroad, 142 F. 176. (2) After the injunction was granted complaints were filed with the Insurance Department asking for an adjustment of rates; under such change of conditions it was not a violation of said injunction to make the reduction order in November, 1923. Railroad v. Dey, 38 F. 656; R. S. 1919, sec. 6283; Glover v. Board, 14 S.D. 139, 84 N.W. 761; Mahoney v. Van Winkle, 33 Cal. 458; Pryor v. Lowe, 8 Ga. 230; Allen v. Railroad, 230 U.S. 553; 10 C. J. 436; 13 C. J. 16; 9 Cyc. 11; 25 R. C. L. 1097. (3) The injunction granted was to restrain relator from holding a hearing to consider the reasonableness of fire insurance rates. Until an order was made affecting rates, no injunction should have been granted. Prentis v. Line, 211 U.S. 210; Railroad v. Bartine, 170 F. 725; McChord v. Company, 183 U.S. 483; Company v. New Orleans, 164 U.S. 471; Alpers v. San Francisco, 32 F. 503; Railroad v. Comm., 175 Ind. 630; Railroad v. Comm., 78 F. 236; 10 C. J. 434. (4) Relator was not guilty of contempt in refusing to obey an injunction which the court had no power to grant. In re Letcher, 190 S.W. 19; Railroad v. Wear, 135 Mo. 230; In re Heffron, 179 Mo.App. 652; State v. McQuillin, 260 Mo. 174; Ex parte Ziegenhein, 187 S.W. 893; Bender v. Young, 252 S.W. 691; Ex parte Arnold, 128 Mo. 256; Ex parte Hagan, 245 S.W. 336; Sands v. Richardson, 252 S.W. 994; Windsor v. McVeigh, 93 U.S. 282; Ex parte Lange, 18 Wall. 163; McHenry v. State, 16 L. R. A. (N. S.) 1062; Railroad v. Dey, 38 F. 656; People v. Burk, 212 P. 847; In re Mead, 190 N.W. 235; State ex rel. v. La Follette, 196 P. 412; Ex parte Laughlin, 213 S.W. 154; Cambria v. Bachmann, 118 S.E. 341; 13 C. J. 13, 15, 16; 6 R. C. L. 505. (5) The statutes provide a plain, speedy and adequate remedy for a review of any order made by the Insurance Commissioner and such remedy is exclusive. The injunction granted in July, 1923, was void. Chandler v. Railroad, 251 Mo. 600; State ex rel. v. Hughes, 240 S.W. 802; State ex rel. v. Harty, 278 Mo. 691; City v. Dasher, 120 Mo. 680; Markowitz v. City, 125 Mo. 485; Chicago v. O'Connell, 278 Ill. 591; State ex rel. v. Dearing, 236 S.W. 629; State ex rel. v. Gideon, 237 S.W. 220; State ex rel. v. Wollfolk, 269 Mo. 389; Prentis v. Line, 211 U.S. 210. (6) The notice of a hearing in July, 1923, was not a violation of the stipulation entered into in February, 1922; such stipulation was signed when no litigation was pending and is void. New conditions had arisen and the Insurance Commissioner was under a statutory duty to investigate the reasonableness of fire insurance rates. Stone v. Bank, 174 U.S. 412; Company v. Railroad, 243 U.S. 281; Allen v. Railroad, 230 U.S. 553; 13 C. J. 16; 10 C. J. 436; 25 R. C. L. 1102.

Bates, Hicks & Folonie, Hogsett & Boyle, Leahy, Saunders & Walther and Cockrill & Armistead for respondent.

(1) The writ of prohibition cannot be made to take the place of an appeal or writ of error. Delaney v. Police Court, 167 Mo. 679; Wand v. Ryan, 166 Mo. 649; Mastin v. Sloan, 98 Mo. 252; State ex rel. v. Johnson, 132 Mo. 109; State ex rel. v. Stobie, 194 Mo. 14; Schubach v. McDonald, 179 Mo. 182; State ex rel v. McQuillin, 262 Mo. 266. The right of appeal exists to review a judgment for civil contempt. State ex rel. Railroad Co. v. Bland, 189 Mo. 197. (2) The sole questions on prohibition are whether the lower court has jurisdiction, and if it has, whether it is acting in excess of its jurisdiction. The merits of the case below are immaterial. Scarritt Estate Co. v. Johnson, 262 S.W. 377; State ex rel. v. Tracy, 237 Mo. 119; Schubach v. McDonald, 179 Mo. 182; State ex rel. v. McQuillin, 262 Mo. 266, 260 Mo. 176; State ex rel. v. Stobie, 194 Mo. 52; State ex rel. Chase v. Hall, 250 S.W. 64. On prohibition the Supreme Court will not consider the merits of the original action in the inferior court. State v. Muench, 225 Mo. 210; State v. Lucas, 236 Mo. 18; State v. Harty, 276 Mo. 583; State v. Ellison, 277 Mo. 294; Willow Springs Creamery Co. v. Produce Co., 197 S.W. 916; State v. Dearing, 180 Mo. 53. (a) A court of equity has jurisdiction upon proper allegations to enjoin a public officer from proceeding under an unconstitutional statute. Carson v. Sullivan, 223 S.W. 571; Ex parte Young, 209 U.S. 123; Truax v. Raich, 239 U.S. 37; Davis v. Los Angeles, 189 U.S. 218; Dobbins v. Los Angeles, 195 U.S. 241; Philadelphia Co. v. Stimson, 223 U.S. 620; W. U. Tel. Co. v. Andrews, 216 U.S. 165; Carroll v. Greenwich Ins. Co., 199 U.S. 409; Smyth v. Ames, 169 U.S. 518; State v. Hall, 250 S.W. 65; Merchants Exchange v. Knott, 212 Mo. 647; Sylvester Coal Co. v. St. Louis, 130 Mo. 328; Jewel Tea Co. v. Carthage, 257 Mo. 391; State ex rel. Hughlett v. Hughes, 104 Mo. 459; Griesedieck v. Moore, 262 F. 582. (b) The allegations of unconstitutionality of Section 6283 (Laws 1923, p. 234), appearing in the petition in the Agricultural case, were sufficient to give the circuit court jurisdiction to judicially consider that issue, arrive at a conclusion upon it, and issue the temporary injunction based thereon. The question in this prohibition proceeding is not whether the circuit court decided the constitutional question correctly or incorrectly, but whether that court had jurisdiction to decide the question at all. State ex rel. v. Stobie, 194 Mo. 45; State ex rel. Coonley v. Hall, 296 Mo. 210; State ex rel. v. Riley, 203 Mo. 192. On prohibition this court will assume that a statute, attacked in the inferior court as unconstitutional, may be so. State ex rel. Chase v. Hall, 250 S.W. 65. The Rating Act of 1923 unconstitutionally interferes with the insurance companies' inherent right of internal management. State ex rel. v. Pub. Serv. Comm., 262 U.S. 288; Railway Co. v. Smith, 173 U.S. 690; Railroad Co. v. Wisconsin, 238 U.S. 501; Interstate Commerce Comm. v. Chicago Great Western, 209 U.S. 118; Welch v. Casualty Co., 1915E, L. R. A. 708; Lochner v. New York, 198 U.S. 45; People ex rel. v. Stevens, 203 N.Y. 20. The Rating Act of 1923 unconstitutionally applies the investment profits of the insurance companies to a reduction of insurance rates. Smyth v. Ames, 169 U.S. 540; Minnesota Rate Case, 230 U.S. 352; State ex rel. Case v. Pub. Serv. Comm., 249 S.W. 962; Hackworth v. Railroad Co., 286 Mo. 282; Northern Pacific Ry. Co. v. North Dakota, 236 U.S. 595. The Rating Act of 1923 unconstitutionally delegates to the Superintendent of Insurance the administration of legislative power without prescribing any rule or standard for his guidance in the exercise of such power. Zucht v. King, 257 U.S. 650; Welch v. Maryland Cas. Co., 57 L. R. A. (N. S.) 708, 147 P. 1046; Yick Wo v. Hopkins, 118 U.S. 356; State v. Buller, 105 Me. 91; Nalley v. Ins. Co., 250 Mo. 452. (c) The stipulation of February 14, 1922, justified the circuit court in entertaining jurisdiction to issue the temporary injunction. Resolute good faith should characterize the conduct of state officials in their agreements, and there is no reason in law or morals that will exempt them from the doctrine of estoppel. State v. Railroad, 89 Mich. 481; 10 R. C. L. 704; Commonwealth v. Andre, 3 Pick. 224; Com. v. Proprietors, 10 Mass. 155; State v. Railroad, 29 Mich. 481; United States v. Military Road Co., 41 F. 493; Trott v. State, 171 N. W. (N. D.) 827. The stipulation was binding upon the superintendent. North Missouri Railroad v. Stephens, 36 Mo. 150; Scarritt Furniture Co. v. Moser, 48 Mo.App. 543; Barlow v. Steel, 65 Mo. 611; Davis v. Hall, 90 Mo. 659; Monk v. Wabash Railroad, 166 Mo.App. 703; Union Bank v. Geary, 5 Peters (U.S.) 99; Stone v. Bank of Commerce, 174 U.S. 412; McCann v. McLennan, 3 Neb. 25; Staples v. Parker, 41 Barb. (N. Y.) 648. The stipulation was entered into during the pendency of the suit to review the rate reduction order of January 5, 1922. The enactment of the 1923 Rating Law did not vitiate the stipulation, for there is no inconsistency between the stipulation and the new statute. Section 6283, Laws 1923, p. 234. (d) The Superintendent's threatened action in holding a hearing and reducing rates would have been a violation of the order of November 10, 1922, made by the Circuit Court in the Aetna case in pursuance of the stipulation, and this gave the court jurisdiction to issue the injunction. The order of November 10th was made by agreement, and no exception was saved thereto, and after the lapse of the term the order became absolutely binding upon all parties to the suit. State ex rel. v. Fort, 178 Mo. 523. (e) The bad faith of the Superintendent alleged in the petition in the Agricultural case was sufficient to give the court jurisdiction to issue the temporary injunction. 22 Cyc. 879, 880; Gravesend v. Curtis, 34 How. Pr. (N. Y.) 261; Enterprise Savings Assn. v....