State ex rel. Lucas v. Blair

• Citation: 144 S.W.2d 106,346 Mo. 1017
• Decision Date: 09 November 1940
• Docket Number: 36917
• Parties: State of Missouri at the relation of Ray B. Lucas, Superintendent of the Insurance Department of the State, Relator, v. Sam C. Blair, Successor in office to Nike G. Sevier, Judge of the Circuit Court of Cole County
• Court: United States State Supreme Court of Missouri

144 S.W.2d 106

346 Mo. 1017

State of Missouri at the relation of Ray B. Lucas, Superintendent of the Insurance Department of the State, Relator, v. Sam C. Blair, Successor in office to Nike G. Sevier, Judge of the Circuit Court of Cole County

No. 36917

Supreme Court of Missouri

November 9, 1940

Rehearing Denied November 9, 1940.

Preliminary rule made absolute.

Roy McKittrick, Attorney General, Covell R. Hewitt and Harry H. Kay, Assistant Attorneys General, for relator; Charles L. Henson of counsel.

(1) Prohibition is the proper remedy where an inferior court is about to act in a case over which it does not have jurisdiction. State ex rel. v. Seehorn, 127 S.W.2d 418; State ex rel. v. Sevier, 339 Mo. 483, 98 S.W.2d 677; Dahlberg v. Fisse, 40 S.W.2d 606, 328 Mo. 213; State ex rel. v. Latshaw, 325 Mo. 909, 30 S.W.2d 105. (2) Before a court has jurisdiction in a particular case, it must have jurisdiction of the subject matter and of the parties and must also have power to render the particular judgment in the particular case. State ex rel. Woodmansee v. Ridge, 343 Mo. 702, 123 S.W.2d 20; Aetna Ins. Co v. O'Malley, 342 Mo. 800, 118 S.W.2d 3; Gray v Clement, 286 Mo. 100, 227 S.W. 111, 296 Mo. 497, 246 S.W. 940. (3) The whole business of insurance is regulated by the Insurance Code, and the courts are without authority to interfere with the administration of that code. Sec. 5670, R. S. 1929; State ex rel. Mo. State Life Ins. Co. v. Hall, 330 Mo. 1107, 52 S.W.2d 174; State ex rel. v. Mulloy, 330 Mo. 951, 52 S.W.2d 469; State ex rel. Carwood Realty Co. v. Dinwiddie, 334 Mo. 592, 122 S.W.2d 912; Aetna Ins. Co. v. O'Malley, 343 Mo. 1232, 124 S.W.2d 1164; Robertson v. Mo. State Life Ins. Co., 136 S.W.2d 362. (4) Plaintiff Weatherby in the suit pending before respondent was employed by virtue of the Insurance Code and must therefore be paid as other employees of the State Insurance Department. Secs. 5678, 5679, 5686, 5688, R. S. 1929; State ex rel. Carwood Realty Co. v. Dinwiddie, 334 Mo. 592, 122 S.W.2d 912; Aetna Ins. Co. v. O'Malley, 343 Mo. 1232, 124 S.W.2d 1164. (5) The impounded funds against which plaintiff Weatherby in the case pending before respondent seeks to impress a lien are in the hands of the relator, who is charged by the Insurance Code with the duty of returning said funds to the policyholders pro rata, and respondent is without jurisdiction to interfere with relator in the handling of said funds. American Constitution Fire Assur. Co. v. O'Malley, 342 Mo. 139, 113 S.W.2d 795; Sec. 5874, R. S. 1929; State ex rel. Carwood Realty Co. v. Dinwiddie, 343 Mo. 592, 122 S.W.2d 912. (6) Whether relator has other adequate remedy than application for prohibition is to be determined in each particular case. State ex rel. Kaiser v. Miller, 316 Mo. 372, 289 S.W. 898. (7) The history of the insurance litigation and the nature of the case now pending before respondent clearly show that relator has no other sufficiently adequate remedy than prohibition.

John T. Barker and Glenn C. Weatherby for respondent.

(1) Respondent has jurisdiction to hear and determine the action in question for its object and purpose is to impress a lien for attorney's fees on a certain fund in the possession of relator for services rendered in its recovery. Sec. 1, Arts. III, VI, Mo. Const.; State ex rel. Anderson v. Roehrig, 320 Mo. 874; Sprague v. Ticonic Natl. Bank, 307 U.S. 779; Lindheimer v. Telephone Co., 292 U.S. 151; Board of Education v. Lonoke Co., 181 Ark. 1046; Haynie, Parks & Westfall v. Camden Gas Corp., 56 S.W.2d 419; Central Railroad v. Pettus, 113 U.S. 116; Lincoln Gas Cases, 256 U.S. 512; Arkadelphia Milling Co. v. Coal Co., 249 U.S. 134; Johnson v. United Rys., 247 Mo. 350; Wright v. Gas Co., 297 U.S. 537; 2 R. C. L., sec. 163, p. 1073; 6 C. J., p. 784. (2) The action brought by the insurance companies in which the fund in question was accumulated and against which the lien for attorney's fees is sought, was not an action authorized by the Insurance Code and, consequently, the right to an attorney's lien against the fund for its preservation and recovery is not to be determined by any provision of that code. Sec. 5874, R. S. 1929; North British & Mercantile Ins. Co. v. Thompson, 330 Mo. 1146, 52 S.W.2d 472; State ex inf. McKittrick v. Amer. Colony Ins. Co., 336 Mo. 406. (3) No provision of the Insurance Code prohibits the payment of attorney's fees from the fund in question. Nor would the payment of such fees from the fund interfere with the administration of the Insurance Code by the Superintendent of Insurance. Secs. 5678, 5679, 5685, 5686, 5874, R. S. 1929. (4) The fund in question was recovered for the benefit of thousands of private individuals who are the only persons primarily interested in it. The Superintendent of Insurance in his official capacity has no substantive right or rights in said fund but is a mere naked trustee or stakeholder holding said fund for its proper owners. Such owners are parties to the action sought to be prohibited and have entered their appearance therein but are not here complaining of respondent's jurisdiction. Hence, this action should abate. Sec. 5874, R. S. 1929; North British & Mercantile Ins. Co. v. Thompson, 330 Mo. 1146; State ex inf. McKittrick v. Amer. Colony Ins. Co., 336 Mo. 406; In re Bean, 201 N.Y.S. 827; Tindol v. Wesley, 167 U.S. 204; Bacon v. Rives, 106 U.S. 99; American Natl. Bank of Denver v. Natl. Benefit & Cas. Co., 70 F. 420. (5) If Sections 5678, 5679, 5686, 5688 and 5874 of the Insurance Code, taken singly or collectively, deny to respondent as judge of the Circuit Court of Cole County, Missouri, his inherent power as a court of equity to hear and determine the case in question, then such section or sections violate Section 1, Articles III and VI, of the Constitution of Missouri which gives to circuit courts all equity powers exercised by them at the time of the adoption of the Constitution. Sec. 1, Arts. III, VI, Mo. Const.; Arnett v. Williams, 226 Mo. 119; Baldwin v. Davidson, 139 Mo. 126; Hudson v. Wright, 204 Mo. 423; State v. Woodson, 161 Mo. 444; Packing Co. v. Industrial Relations, 262 U.S. 522; State ex inf. McKittrick v. Amer. Colony Ins. Co., 336 Mo. 406; Hedden v. Hand, 90 N.J.Eq. 583, 107 A. 285.

Justin D. Bowersock, Robert B. Fizzell and John F. Rhodes, amici curiae, pro se.

(1) The Circuit Court of Cole County has jurisdiction in this case, for it has jurisdiction of the subject matter, of the parties; and it has power to render the judgment prayed for in this case. State ex rel. North British & Mercantile Insurance Co. v. Thompson, 330 Mo. 1146; State ex inf. McKittrick, Attorney General, v. Amer. Colony Ins. Co., 336 Mo. 406; State ex rel. Mo. State Life Ins. Co. v. Hall, 330 Mo. 1107, 52 S.W.2d 1077; State ex rel. Carwood Realty Co. v. Dinwiddie, 343 Mo. 592, 122 S.W.2d 912; American Constitution Fire Assur. Co. v. O'Malley, 342 Mo. 139; State ex rel. Robertson v. Sevier, 342 Mo. 346; Sprague v. Ticonic Natl. Bank, 307 U.S. 161, 59 S.Ct. 777; Sec. 5678, R. S. 1929. (2) These funds are not held by the Superintendent of Insurance as a result of the operation of the code. (3) The writ should not issue in this case, and the Circuit Court of Cole County should proceed to determine claims, so the Superintendent of Insurance may distribute pro rata or ratably the funds determined to go to policyholders. State ex rel. Carwood Realty Co. v. Dinwiddie, 343 Mo. 592, 122 S.W.2d 912; American Constitution Fire Assur. Co. v. O'Malley, 342 Mo. 139; State ex rel. Abeille Ins. Co. v. Sevier, 335 Mo. 269, 73 S.W.2d 361; Sprague v. Ticonic Natl. Bank, 307 U.S. 161, 59 S.Ct. 777.

OPINION

Clark, J.

Prohibition to prevent respondent, circuit judge of Cole County, from proceeding to hear and determine the case of Glenn C. Weatherby v. Lucas et al., now pending in said circuit court. In that case the plaintiff, Weatherby, has sued eight named insurance policyholders and Ray B. Lucas, Superintendent of the Insurance Department of Missouri, asking the court to allow plaintiff an attorney fee and impress the same as a lien on the fund now in the hands of said superintendent as a result of certain litigation, commonly known as the 16 2/3 per cent rate cases.

The return of respondent to our preliminary writ presents legal questions only. Briefly stated, the undisputed facts are as follows: on December 30, 1929, all stock fire insurance companies doing business in Missouri set up on their books an increase in rates of 16 2/3 per cent, notified the then superintendent, Thompson, and asked his approval; on May 28 1930, the superintendent refused to approve the increase; on June 5, 1930, a large number of the companies brought a joint action in the Circuit Court of Cole County to review the order of the superintendent refusing approval of the increase; at the same time the review suit was filed the companies procured an ex parte order authorizing them to collect such increased rates and impound the increase with the superintendent to await the outcome of the action; such increase was collected and impounded from June 1, 1930, to May 1, 1935; in obedience to an order of said circuit court made on January 21, 1933, the superintendent paid the impounded fund into the registry of said court; later, in obedience to the mandate of this court in the case of American Constitution Fire Assurance Co. v. O'Malley, 342 Mo. 139, 113 S.W.2d 795, the fund, amounting to something more than $ 1,650,000, was returned to the superintendent for distribution among the policyholders. On December 1, 1930, the then superintendent, Thompson, with the approval of the Governor, employed Weatherby as an associate counsel in the rate litigation; Weatherby continued to act as one of the attorneys in such litigation until...