Opinion
March 9, 1937.
1. JURISDICTION: Appeal Pending. Where a number of stock fire insurance companies sued to review an order of the State Superintendent of Insurance refusing to approve an increased rate proposed by the insurance companies and pending the action the increase was impounded by order of the circuit court and on final judgment the circuit court denied the increase and ordered all impounded funds distributed to policyholders, while an appeal was pending from that judgment the circuit court could not entertain a proceeding instituted by certain policyholders to establish their claims against the impounded fund and secure its distribution, a proceeding which would nullify the rights incident to the pending appeal to the Supreme Court, and prohibition would lie against such proceeding.
2. APPEALS: Bonds. On an appeal from an order of the circuit court denying a rate increase proposed by insurance companies, where the funds arising from the increase were impounded and in the custody of the trial court, the appealing insurance companies were not required to give a bond guaranteeing the payment of the funds.
PROVISIONAL RULE MADE ABSOLUTE.
Robert J. Folonie, E.R. Morrison and Homer H. Berger for relators; Ragland, Otto Potter and Igoe, Carroll Keefe of counsel.
(1) A final judgment having been entered in The American Constitution Assurance Company v. O'Malley and it having been appealed to the Supreme Court and the judgment term having expired, the Circuit Court of Cole County would be without jurisdiction to enter any order, decree or further judgment in that cause. Atl. Coast Line Railroad Co. v. Florida, 295 U.S. 301, 79 L.Ed. 1451; 22 R.C.L., p. 22, sec. 21; State ex rel. St. Charles Sav. Bank v. Hall, 321 Mo. 624; Reid v. Bright, 232 Mo. 399; Sec. 1022, R.S. 1929; State ex rel. Gray v. Hennings, 194 Mo. App. 545; Maryland Cas. Co. v. Lucky Budge Min. Co., 192 Mo. App. 337; In re Engelhard Sons Co., 231 U.S. 651; Wright v. Central Ky. Nat. Gas Co., 297 U.S. 541. (2) The quo warranto case State ex inf. McKittrick, Attorney General, v. American Colony Insurance Company did not determine that the policyholders were entitled to a return of the impounded fund. State ex inf. McKittrick v. Am. Colony Ins. Co., 336 Mo. 406; Owen v. Gilchrist, 304 Mo. 330, 263 S.W. 423; M., K. T. Ry. Co. v. Am. Surety Co., 291 Mo. 92, 236 S.W. 657; Schnitzer v. Powder Co., 160 S.W. 282; Koch v. City of Weston, 203 Mo. App. 445, 220 S.W. 1007; State ex rel. v. Sewer District, 333 Mo. 900, 63 S.W.2d 133; Macon County v. Farmers Trust Co., 325 Mo. 784, 29 S.W.2d 1096; Davidson v. Mayhew, 169 Mo. 258, 68 S.W. 1031; State ex rel. v. Harris, 228 Mo. App. 469, 69 S.W.2d 307; Wrather v. Salyer, 274 S.W. 1106; Kirk v. Met. Life Ins. Co., 225 Mo. App. 756, 38 S.W.2d 519; Scheer v. Trust Co., 330 Mo. 149, 49 S.W.2d 135; Dolph v. Maryland Cas. Co., 303 Mo. 534, 261 S.W. 330; Nat. Cypress Pole Piling Co. v. Hemphill Lbr. Co., 325 Mo. 807, 31 S.W.2d 1059; Boyken v. Sharp, 193 Mo. App. 607; Sklebar v. Downey, 220 Mo. App. 5, 285 S.W. 148; Davidson v. Davidson R.E. Co., 249 Mo. 474, 155 S.W. 1; Stephens v. Moore, 298 Mo. 215; Witte v. Storm, 236 Mo. 470; Gray v. Earls, 298 Mo. 116. (3) Relators are entitled to have a permanent writ of prohibition issued prohibiting the respondent, judge of the Circuit Court of Cole County, from any further action in case of American Constitution Fire Assurance Company v. O'Malley. State ex rel. Page v. Terte, 324 Mo. 925; Bromschwig v. Carthage Marble White Lime Co., 334 Mo. 830; State ex rel. v. Oliver, 163 Mo. 696; State ex rel. v. Eby, 170 Mo. 521; State ex rel. v. Huck, 296 Mo. 383.
Lewis H. Cook, H.P. Lauf, Gilbert Lamb and Glenn C. Weatherby for respondent.
(1) The relators here were the respondents in the quo warranto case. The question of the right of the respondents in that case to collect the increase pending the American Constitution case was the sole issue. That issue was judicially determined against the respondents there, relators here. Hence, the judgment there precludes relators here from again litigating that issue. That judgment is conclusive and final against relators as to all issues there determined. State ex inf. McKittrick v. Am. Colony Ins. Co., 336 Mo. 406; Case v. Sipes, 280 Mo. 120, 217 S.W. 306; St. Louis v. United Rys., 236 Mo. 421, 174 S.W. 78; Hartford Fire Ins. Co. v. Ibs, 237 U.S. 662. (2) June 5, 1930, the relators instituted the action herein referred to as the American Constitution case. On the same day they procured an ex parte order purporting to authorize them to collect and impound an increase in fire and windstorm rates. No injunctive relief was sought by them and no showing made until May 8, 1935, that they would suffer confiscation of their property pending the suit unless permitted to collect and impound the increase to await the final outcome of the case. This preliminary showing was imperative if they desired to reap the benefits of the increase pending suit. Hence, all moneys collected and impounded prior to May 8, 1935, were wrongfully collected and the relators have no interest therein present, future, or contingent. North British Merc. Ins. Co. v. Thompson, 330 Mo. 1146; Davis v. Hartwig, 195 Mo. 398; Carlin v. Wolf, 154 Mo. 543; Goodrich Rubber Co. v. Bennett, 281 S.W. 75; Betzler v. James, 227 Mo. 375, 126 S.W. 1007; Phoenix Trust Co. v. Holt, 279 S.W. 717, 312 Mo. 563; Thompson v. Lindsay, 242 Mo. 53, 145 S.W. 472. (3) The appeal from the judgment in the American Constitution case does not divest respondent of power and jurisdiction to settle and adjust claims against the fund in the registry of his court and order its distribution. This because the respondent's jurisdiction of the fund and his power to distribute it is in no sense dependent upon the outcome of such appeal. North British Mere. Ins. Co. v. Thompson, supra; Borchers v. Barckers, 158 Mo. App. 274; In re Antigo Screen Door Co., 123 F. 249.
Original proceeding in prohibition. On June 5, 1930, a large number of stock fire insurance companies operating in Missouri brought an action to review an order of the State Superintendent of Insurance by which order that officer had refused to approve a proposed rate increase initiated by the insurance companies. That cause was entitled American Constitutional Fire Assurance Company et al. against the then acting insurance superintendent. The present insurance superintendent was substituted as defendant upon his ascension to that office. That cause will hereafter be referred to as the "rate case." Immediately prior to the institution of the rate case the insurance companies began collecting the increased rates theretofore initiated by the companies but disapproved by the insurance superintendent. Upon the filing of the rate case the circuit court ordered the impounding of the increase upon the theory that the statute (Sec. 5874, R.S. 1929) authorized such a course. On May 30, 1932, an action in mandamus was instituted in this court by an insurance company affected by certain orders made in the pending rate case charging certain imperfections in those orders. The relief sought in that case is of no importance here. However, in the opinion in that case delivered by this court on August 4, 1932, reported in State ex rel. North British Mercantile Ins. Co. v. Thompson, 330 Mo. 1146, 52 S.W.2d 472, it was held that the statute (Sec. 5874, supra) made no provision for impounding a rate increase during the pendency of a statutory review proceeding under Section 5874. On January 24, 1933, the Attorney General filed an information in this court in the nature of a quo warranto, charging, among other things, that the insurance companies were making unlawful collections of premiums to the extent of the increase above referred to, and requesting that this court "make a proper order for distribution" of the impounded funds. The proceeding last referred to will be referred to as the "quo warranto" case. The opinion in that case is reported in State ex inf. McKittrick v. American Colony Ins. Co., 336 Mo. 406, 80 S.W.2d 876. It held that the collection and impounding of the increase was unauthorized in a statutory proceeding under Section 5874, supra, and ordered that such collection and impounding cease, "unless . . . the same be permitted under the order, judgment or decree of a court of competent jurisdiction in that behalf. That opinion further held that the collection of an increase and the impounding thereof was proper in a proper injunction proceeding in equity. After the opinion in the quo warranto case was delivered an amended petition asking injunctive relief was filed in the rate case and a temporary injunction importing to authorize the future collection of the increase was obtained on May 9, 1935. Final judgment was entered by the circuit court in the rate case on May 23, 1935. By that judgment the increase was denied and all of the impounded funds ordered distributed to the policyholders from whom they had been collected. An application for appeal from this judgment was made and an appeal was granted to this court. Appeal bond was fixed, given and approved, and the appeal was duly lodged here on May 27, 1935.
On July 28, 1936, Charles H. Buchanan and Louise M. Buchanan, on behalf of themselves and others similarly situated, filed a petition without notice or leave of court, in the same circuit court from which the appeal was taken in the rate case, by which petition they sought to establish, as policyholders, claims against the funds impounded in the rate case and to secure the payment of the claims and the distribution of the impounding funds. The petition in the present action was filed August 5, 1936, after notice had been given that the Buchanan petition would be taken up by the court on August 18, 1936. By the present proceeding relators, who are appellants in the rate case, seek to prohibit the respondent as judge of the circuit court from proceeding with the Buchanan petition and possibly distributing the impounded funds pending determination of the appeal in the rate case.
Respondent contends that since the opinion in the quo warranto case held that relators were not entitled to collect the increase or the court to impound that increase in a statutory review proceedings, it must necessarily follow that relators have no interest in the funds impounded prior to the granting of the temporary injunction, and therefore respondent may proceed to distribute those funds.
Respondent misconceives the effect of the opinion in the quo warranto case. It was there stated (l.c. 441):
"But we have no right in this quo warranto proceeding directly or indirectly to take charge of the funds which have been impounded in the circuit court in the review proceeding, and to order their disbursement and distribution by that court to policyholders as prayed in the Attorney General's information. The circuit court has jurisdiction of those funds."
We did not undertake to determine the title to the impounded funds in the quo warranto case. The rate was still pending at the time with no final judgment rendered, which facts were then before this court. The title and proper disposition of the funds impounded in the rate case would necessarily be more accurately determined in the proceeding in which the order for the impounding of the funds was made. The title to the funds not having been adjudicated in the quo warranto case, Case v. Sipes, 280 Mo. 110, 217 S.W. 306; City of St. Louis v. United Rys. Co., 263 Mo. 387, 174 S.W. 78, and Hartford Fire Ins. Co. v. Ibs, 237 U.S. 662, and other cases of similar import cited by respondents are no authority in this case.
That respondent intended to provide for the distribution of the impounded funds in the judgment in the rate case is evidenced by the following excerpt from that judgment:
". . . And it is further considered, ordered, adjudged and decreed that the funds heretofore impounded herein be disbursed among the policyholders lawfully entitled thereto, subject to such other lawful claims and demands, if any, as may constitute a proper charge against said fund, under the orders and judgments of this court."
As heretofore related, an appeal from the judgment in the rate case was duly taken to this court. That appeal was presented by oral argument and submitted to this court en banc on the day preceding the submission of this case. In the appeal in the rate case the determination of the title to the impounded funds and the proper distribution thereof was formally presented and submitted. It therefore becomes apparent that the question presented in the present case is simply one of procedure — that question being whether a circuit court may enter a judgment disposing of an impounded fund, grant an appeal from that judgment, and then while that appeal is pending make an order based upon a petition filed in the case after the granting of the appeal, which order would dispose of the fund pending the appeal and in spite of it. To hold that such authority is vested in respondent would substantially nullify the rights incident to an appeal. We find nothing in State ex rel. North British Mercantile Ins. Co. v. Thompson, 330 Mo. 1146, 52 S.W.2d 472, Borchers v. Barckers, 158 Mo. App. 267, 138 S.W. 555, or In re Antigo Screen Door Co., 123 F. 249, supporting such procedure.
Respondent argues that since the amount of the appeal bond in the rate case was only $25,000 and the impounded funds totaled approximately $1,650,000, the appeal bond was given and accepted as a cost bond only and did not operate as a supersedeas. That contention is sufficiently answered by the fact that the impounded funds were in the custody of the court and under its direction and control, and hence it was unnecessary to require appellants to give a bond in a suit in equity guaranteeing the payment of the funds to the parties who should, on appeal, be held to be entitled to it.
The provisional rule in prohibition should be made absolute. It is so ordered. All concur.