State, on Inf. of McKittrick v. Koon

• Decision Date: 21 April 1947
• Docket Number: 39040
• Citation: 201 S.W.2d 446,356 Mo. 284
• Parties: State of Missouri, Upon the Information of Roy McKittrick, Attorney General of the State of Missouri, Informant, v. W. D. Koon and Mrs. W. D. Koon
• Court: Missouri Supreme Court

201 S.W.2d 446

356 Mo. 284

State of Missouri, Upon the Information of Roy McKittrick, Attorney General of the State of Missouri, Informant, v. W. D. Koon and Mrs. W. D. Koon

No. 39040

Supreme Court of Missouri

April 21, 1947

Original Proceeding in Quo Warranto and Contempt.

RESPONDENTS FINED.

J E. Taylor, Attorney General, and Arthur M O'Keefe, Assistant Attorney General, for informant Allen McReynolds of counsel.

(1) Respondent's disobedience of the decree of ouster of this court of which he had actual knowledge was an interference with and attempted to obstruct the due administration of justice as to constitute contempt. 12 Am. Jur., p. 405, sec. 24; 17 C.J.S., p. 13, sec. 12; Thompson v. Farmers Exchange Bank, 333 Mo. 437, 62 S.W.2d 803; Bender v. Young, 252 S.W. 691; Carder v. Carder, 61 S.W.2d 388; State ex rel. Pulitzer v. Coleman, 347 Mo. 1239, 152 S.W.2d 640; Special Commissioner's conclusion of law, sec. 6, p. 72. (2) The contempt in this case partakes of both a civil and criminal nature. This proceeding arises from the inherent power of the court to protect its dignity, authority and enforce its judgments. 12 Am. Jur., p. 418, sec. 40; 17 C.J.S., p. 55, sec. 43; Carder v. Carder, 61 S.W.2d 388; State ex rel. Pulitzer Pub. Co. v. Coleman, 347 Mo. 1239, 152 S.W.2d 640; Thompson v. Bank, 333 Mo. 437, 62 S.W.2d 803. (3) The decree of ouster operated against the respondents both as officers of the purported corporation and as individuals. The decree not only enjoined past and present actions but prohibited any future action. Commissioner's Report, conclusion of law, secs. 1, 2, 3, p. 62-7, and authorities cited thereunder. (4) Actions of the respondents in resorting to fraud and subterfuge to avoid the effects of the ouster decree constituted contempt. 12 Am. Jur., p. 406, note 7; In re Lennon, 166 U.S. 648, 41 L.Ed. 1110, 17 S.Ct. 658; State v. Pittsburg, 80 Kan. 710, 25 L.R.A. (N.S.) 226; Dennis v. LeClerc, 1 Mart. (La.) 297, 5 Am. Dec. 712; In re Synod, 249 Mich. 669, 229 N.W. 402. (5) Respondents in making false representations to the Attorney General and this court and in signing a knowingly false stipulation upon which the decree of ouster was based were guilty of obtaining a decree by fraud and deceit so as to constitute contempt. 17 C.J.S., p. 12, sec. 10, note 72; United States v. Pendergast, 39 F.Supp. 189. (6) The respondents in transferring and removing the records, properties, business and affairs including money of the Missouri Association to the Arkansas Association, beyond the jurisdiction of this court, with the purpose and intent to continue the business in the State of Missouri contrary to and in defiance of the terms of the stipulation, order and judgment in the ouster suit are guilty of contempt. State records, properties, business records and affairs including money were impressed with a trust the only purpose of which was to liquidate the Missouri Association. 17 C.J.S., p. 18, note 27. (7) The pleadings of the respondents and the evidence shows that they were engaged in selling burial insurance contracts in Missouri and were doing an insurance business in this state because the law of the place where the contract is to be performed governs as to its construction and interpretation. Brookville El. Ry. Co. v. Utilities Co., 142 S.W.2d l.c. 809; Liebing v. Mutual Life Ins. Co., 276 Mo. 118, 207 S.W. 230. (8) Respondents were not engaged in interstate commerce because, where a contract is to be performed within a state or services to be rendered therein such performance or services constitute "doing business" within a state and the contract is intrastate in nature. Natl. Refrigerator Co. v. Southwest Mo. Light Co., 288 Mo. 290, 231 S.W. 930; State ex rel. Hayes v. Robertson, 271 Mo. 475, 196 S.W. 1132; Wichita Film & Supply Co. v. Yales, 194 Mo.App. 60, 184 S.W. 119; Special Commissioner's conclusion of law, sec. 5, pp. 70-2. (9) The evidence shows that the respondents employed agents to solicit business within the State of Missouri because a principal who, with knowledge of the material facts concerning his agents unauthorized acts, receives and retains the benefits thereof, thereby ratifies the same. 2 C.J.S., p. 1097, sec 49; 2 Am. Jur., p. 181, sec. 227; St. Louis Mut. Life Ins. Co. v. Walter, 329 Mo. 715, 46 S.W.2d 166; Walker v. Hassler, 240 S.W. 257; Ruggles v. Washington County, 3 Mo. 496; Special Commissioner's conclusion of law, sec. 4, pp. 67-9. (10) The following actions on the part of the respondents constituted "doing business within this state." (a) The employment of soliciting agents. Village of Axrel v. Nebraska Hardware Mut. Ins. Co., 7 N.W.2d 471; Union Mut. Life Ins. Co. of Iowa v. District Court of City and County of Denver, 47 P.2d 401, 97 Colo. 108; Commercial Mut. Accident Co. v. Davis, 213 U.S. 245, 53 L.Ed. 782, 29 S.Ct. 445; North Am. Union v. Oliphint, 141 Ark. 346, 217 S.W. 1. Isaac Fass, Inc. v. Pink, 17 S.W.2d 379; (b) The payment of insurance losses and the continuing and holding of old policies in force within the state after it had withdrawn from the state. Isaac Fass, Inc. v. Pink, 17 S.E.2d 379; Connecticut Mut. Life Ins. Co. v. Spratley, 172 U.S. 602, 43 L.Ed. 569, 19 S.Ct. 308; State v. Columbian Natl. Life Ins. Co., 141 Wis. 577, 124 N.W. 502. (c) The making of contracts with a Missouri radio station to render services in its behalf. Union Mut. Life Co. of Iowa v. District Court of City and County of Denver, 47 P.2d 401; Special Commisioner's conclusion of law, sec. 4, pp. 69-70. (11) In determining whether insurance business is done within the state so as to be subject to regulation by such state, considerations of location of activity prior and subsequent to making of contract, the degree of interest of the regulating state in subject insured, and of location of property insured, are of great weight. Hoopeston Canning Co. v. Cullen, Superintendent of Insurance, 318 U.S. 313, 63 S.Ct. 602. (12) The declared legislative policy of this state prohibits foreign corporations from doing business here, if organized in another state for the purpose of avoiding the laws of this state. Booth v. Scott, 276 Mo. 1, 205 S.W. 633. (13) The interstate commerce clause in the Federal Constitution in no way interferes with the appropriate exercise of police power by state authorities. First Natl. Benefit Society v. Garrison, Insurance Commissioner, 58 F.Supp. 972, 155 F.2d 522; United States v. Southeastern Underwriters Assn., 64 S.Ct. 1162; Special Commissioner's conclusion of law, sec. 5, pp. 70-2. (14) Parties who are guilty of contempt are subject to punishment either by fine or imprisonment in the discretion of the court. Sec. 2029, R.S. 1939; 17 C.J.S., pp. 132, 133; 12 Am. Jur., p. 718.

Frank C. Mann, Gene Frost and C. A. Fuller for respondent; Mann & Mann of counsel.

(1) The information wholly fails to charge a violation on the part of either respondent of the judgment of this court in the quo warranto proceeding which would warrant this court in finding either of them to be in contempt of this court. (2) The judgment upon which this proceeding is founded was one entered in an original proceeding in the nature of quo warranto, in which there was involved only the question as to whether the Barry County Burial Association of Cassville Missouri, a corporation, and these respondents as its officers, were usurping, claiming or exercising corporate franchise and privileges in excess of the corporation's lawful charter powers. (3) Informant would have the court ignore the limitations upon its jurisdiction in the quo warranto proceeding and to construe its judgment therein as though it possessed, in that proceeding, general or unlimited jurisdiction; that the effect of the judgment was not only one of ouster of the corporate franchise of the Cassville Association and of the right of the individual respondents from writing any new burial contracts under that purported franchise, but, in addition, it enjoined and restrained the individual respondents from participating in the issuing of burial insurance by an association or agency other than and independent of the Cassville Association. (4) The charge here made is for criminal, not civil, contempt. Respondents are presumed to be innocent and must be proved guilty beyond a reasonable doubt. Secs. 2028, 2029, 4886, R.S. 1939; In re Shull, 221 Mo. 623; Gompers v. Buck Stove & R. Co., 221 U.S. 417, 55 L.Ed. 796; Counselman v. Hitchcock, 142 U.S. 547, 35 L.Ed. 1110; Sandefur v. Canoe Creek C. Co., 266 U.S. 42, 69 L.Ed. 162. (5) The judgment in the quo warranto proceeding must be strictly construed in favor of respondents. In re Shull, 221 Mo. 623. (6) The judgment was, and could only be, directed against the right of these respondents to hold their respective offices in and to exercise in behalf and in the name of the Cassville Association corporate charters which the latter did not possess. By reason of the very nature of the extraordinary writ of quo warranto and the limitations upon the jurisdiction of the court in such a proceeding, no other construction of the judgment is tenable. (7) The scope of the common-law writ of quo warranto, which has not been extended by the modern proceeding in the nature of quo warranto is limited to, and spends itself in, the determination of the title or right to a corporate franchise or to a corporate or public office. 51 C.J. sec. 10, p. 314; State ex inf. McAllister v. Norborne Land Drainage Dist. Co., 290 Mo. 91; State ex inf. McKittrick v. Wymore, 343 Mo. 98, 119 S.W.2d 941; State ex inf. Walsh v. Thatcher, 340 Mo. 865, 102 S.W.2d 937; State ex inf. McKittrick v. Murphy, 347 Mo. 484, 148 S.W.2d 527; State ex inf. Prosecuting Attorney v. Chipley, 233 Mo.App. 61, 116 S.W.2d 140; State ex inf. Pope v....