Case Name: Robertson, State Revenue Agent, v. Ætna Ins. Co. et al.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1924-02-11
Citations: 134 Miss. 398
Docket Number: No. 23720
Parties: Robertson, State Revenue Agent, v. Ætna Ins. Co. et al.
Judges: I am requested by Judges Cook and Ethridge to say that they concur in the views herein expressed.
Reporter: Mississippi Reports
Volume: 134
Pages: 398–418

Head Matter:
Robertson, State Revenue Agent, v. Ætna Ins. Co. et al.
[98 So. 833.
No. 23720.]
(En Banc.
Feb. 11, 1924.)
Judgment. Witt interfere to prevent unfair advantage of judgment rendered by mutual mistake of fact.
In all cases where, by accident, mistake, or fraud, a party has obtained an unfair and unconscionable advantage in a judgment rendered in his favor against his adversary, a court of equity will interfere and prevent such party from enjoying the fruits of such advantage, as, where such advantage is brought about by a mutual mistake of fact by the parties and the court entering the judgment, relief therefrom will be granted by a court of equity.
Smith, C. J., and Cook and Ethbidgb, JJ., dissenting.
Appeal from chancery court of Hinds county.
Hon. Y. J. Stricker, Chancellor.
Suit by the Aetna Insurance Company and others against Stokes V. Robertson, state revenue agent. Prom a decree for plaintiffs, defendant appeals.
Affirmed and remanded as to certain plaintiffs.
George Butter, for appellant.
This is not an effort to correct the judgment or decree under section 1016, of the Code of 1906, because of a mistake, miscalculation or misreeital of any sum of money, quantity of anything, or of any name. Certainly it would seem that under the case of Wilson v. Handsboro, 99 Miss. 252, the case made by this proceeding is not within the terms of the statute.
As we understand it, counsel rely upon such cases as Horry v. Buddendorff, 98 Miss. 98; Wilson v. Ilandsboro, 99 Miss. 252; Brown v. Wesson, 114 Miss. 216; and Huddleston v. Huddleston, 95 So. 674, and undertake to present a case within one of the original heads of equity jurisdiction'on account of a mistake of fact, as was presented particularly in the case of Broum v. Wesson, sivpra.
The allegations contained in this proceeding to correct the decrees do not meet the requirements laid down in Broym v. Wesson, supra. Therefore, the insurance companies are not entitled to relief on the showing made by their petition as to any of the companies. In the petition in this case it is alleged that the mistake grew out of the fact “that the discovery did not disclose . . . that petitioners, and each of them, carried reinsurance, that is to say, that they re-insured part of the risks written by them in the state of Mississippi with other fire insurance companies, defendant in said petition. ’ ’
In other words, the petition to correct the decrees is predicated upon the act of the defendants in not making a proper discovery in response to the direct interrogatories propounded to them in the original tax proceeding.
There is no reason offered, or excuse given, why the defendants should have made this answer. Interrogatories had been propounded to them. They had answered these .interrogatories under oath, and the decree adjudicated the exact amount of taxes due by each company. They show no diligence, and in reality, did not aver that their discovery was erroneous.
To summarize, we say: 1. This proceeding to correct these decrees is clearly not within the terms of section 1016, Code of 1906. 2. The alleged errors in the decree were not induced by the mistake of the officers of the court. 3. The error was purely an error of law and not one of fact. 4. The insurance companies have not shown or averred any sort of diligence, and, therefore, upon the plainest principles of equity are estopped to invoke the jurisdiction of this court to correct an error brought about by their own negligence and indifference.
Watkins, Watkins S Eager, and R. L. McLaurin, for appellees.
The legal principles underlying this case, from all the authorities, may, without controversy, be stated as follows: The rule is well settled that whenever a judgment or decree, through accident, mistake or fraud, is incorrectly entered, and is not the judgment or decree which would have been entered had not such accident, mistake or fraud intervened, then in such case a court of equity will afford relief and correct the judgment or decree. The power of a court of equity in such case does not arise from, nor is it restrained by section 736 of Hemingway’s Code o° the state of Mississippi, but is an independent ground of equity jurisdiction, and the power of the court of equity to give relief in such case is as complete as if the subject-matter for correction were a contract instead of a judgment. The rule is subject, however, to the modification that the mistake must be one of fact, and not of law.
The question was first presented in the. case of Webster v. Skipwith, 26 Miss. 341, and was again presented in Wilson y. T.own of Handsboro, 99 Miss. 252. This question was also treated in the following eases: Broivn v. Wesson, 115 Miss. 216; Huddleston v. Huddleston, 95 So. 674, 132 Miss.-.
From the case of Brown v. Wesson, supra,^ and other cases cited, it is made abundantly clear that the rule in- yoked in this case is not peculiar to Mississippi, but is the law everywhere. The rule recognizes the principle that there should be an end of litigation, and that a question once litigated should not be re-litigated, but, notwithstanding this rule, and the necessity for its observance, if a judgment, as entered, represents a mutual mistake of the parties, or of the court, the rendering of absolute justice is of greater importance than the adherence to any technical rule, and in recognition of this principle such decrees are invariably open to correction.
Counsel for appellant state that the demurrer to the petition should have been sustained because the petition was, as to a number of companies, in direct conflict with the original answer of certain appellees, filed in the intervention proceedings.
It is true.that, by agreement of counsel, the original proceedings were made an exhibit to the petition, but the petition to correct the judgment did not ratify or adopt any of the statements contained in the original proceedings. Reference was made to them in order that the court might know exactly what steps were taken in the original proceedings. The right of action in this case was not founded on the exhibits. In other words, the exhibits did not form the basis of the action. This question was presented before this court in Terry v. Jones, 44 Miss. 540; McKinney v. Adams, 50 So. 574, not officially reported.
This case was tried upon appellants’ demurrer to the defendants’ petition to correct the judgment, all of the allegations of which were admitted on demurrer, and in no manner controlled or altered by any real or apparent conflict contained in the exhibits.
It must be borne in mind, too, that the petition did not deal with re-insurance carried with companies not defendant to the suit, because, as to any such re-insurance, the appellees were submitting themselves to liability. There would be no duplicate recovery in such case, because, as to the re-insurance companies not parties to the suit, no judgment was being entered against them. The error in this case, however, grew out of the fact that, through accident and mistake, the attention of the court was not directed to the fact that a duplicate recovery would result in the judgment entered.
It will be noted that counsel call attention to the fact that there is a discrepancy in the re-insurance stated in the original answer as to some of the appellees, and that stated in the petition to correct the judgment. And counsel calls attention to the fact that the Aetna Insurance Company, in its original discovery, stated that it had total re-insurance of forty-three thousand two hundred eighty dollars and twenty-three cents and, in the petition to correct the judgment, it was statéd that that company had re-insurance of forty thousand eight hundred sixty-four dollars' and eighteen cents. We might direct the attention of the court to the fact that any statement of re-insurance contained in the original answer of the appellees was not responsive to any prayer for discovery, and, as a matter of fact, was not discovery at all, but was a mere voluntary statement made on behalf of the company itself. The state, in that case, was not asking for discovery as to re-insurance, and was not dealing with re-insurance. The insurance companies were not asking for a reduction on account of re-insurance’ The statement of re-insurance was, therefore, purely voluntary and intended to accomplish no purpose whatsoever.
It will further be noted that variance in the statement as to re-insurance would be expected if one statement should include all re-insurance and the other statement only re-insurance carried with certain companies defendant to the suit, or if one included only a statement of the re-insurance carried with strictly re-insurance companies, and the other included the amounts carried with the other companies defendant to the suit.
Counsel say, however, that the judgments should not be corrected because the original statement of gross premiums were furnished by appellees. The appellees did furnish a statement of gross premiums, but the state was only calling for a statement of the gross premiums which were taxable. The state was not calling for a duplication of recovery. And by mistake and error, the appellees filed statements which did not call to the attention of the court the fact that a portion of the premiums were for insurance ceded to other companies who were parties defendant to the suit. Suppose such had not been the case; suppose when they filed their answers this information had been given to the court. Confessedly, judgments as were taken would not have been .taken. The allegations of the petition to correct the judgments are that the judgments were taken through error and mistake.

Opinion:
Anderson, J.,
delivered the opinion of the court.
Appellees, insurance companies doing business in this state, filed their bill in the chancery court of Hinds county to correct the decree so far as it affected them entered in the case of Stokes V. Robertson, Revenue Agent, v. Ætna Insurance Company et al., in said court, and to have entered the decree sought and intended by the parties to be entered in said cause. A decree was rendered sustaining the prayer of appellees' bill, from which appellant was granted an appeal to settle the principles of the cause.
The following case is presented: In February, 1921, the insurance commissioner through the attorney-general filed an intervention petition in the case of Stokes V. Robertson, Revenue Agent, v. Ætna Insurance Company et al., pending in the chancery court of Hinds county. By this intervention petition the insurance commissioner sought to recover under the provisions of sections 2625 and 2607, Code of 1906 (sections 5090 and 5070, Hemingway's Code), from the insurance companies, defendants in that suit (among whom were appellees), the premium taxes due by them to the state for the last half of 1920, and sought to have the state's claim therefor made a prior lien on the funds in the hands of the receivers in said cause, and also sought a personal decree against the defendants. In order to ascertain the amount of premiums written by the defendants in that case during the period mentioned discovery was prayed for against them, asking that in their answers they discover the amount of insurance written during the period in question. The appellees filed their answers showing the gross premiums received by them during said period and the amount of premiums returned on account of cancellations, but failed to claim credit for reinsurance premiums.
In November, 1921, a personal decree with six per cent, interest thereon from the date of said decree, was taken against each of appellees for the amount of the gross premiums shown by their answers to have been written by them less cancellations, no deduction whatever being made on account of reinsurance. Thereafter it was ascertained by appellees that they had failed to discover in their answers and claim credit for premiums paid on account of reinsurance. Thereupon appellees filed their bill in said cause, which was the origin of the present case, to correct said decree so as to give appellees credit for premiums paid by insurance companies who had reinsured part of the appellee's business. Appellees charge in their bill that the state did not assert a claim in said cause against them or either of them for any amount other than the tax provided by said statute on the gross premiums written by them for the period in question, that by reason of mutual mistake of appellees and appellant a decree was rendered against appellees for an amount in excess of said tax, and that said mistake arose by reason of tbe fact that the appellees had ceded a portion of the insurance written by them in the state to other insurance companies who were also parties defendant in said receivership, and that in said decree appellees were charged with the full amount of gross premiums written by them, and such other insurance companies were likewise charged with the full amount of gross premiums written by them, including reinsurance premiums, and therefore the result was as to such insurance to impose double liability for the same premium. In other words, the recovery as had in said cause for premium taxes against appellees and other companies therein sued overlapped on account of appellees through mistake in their answers failing to discover the amount of reinsurance premiums for which they were entitled to credit. The bill charged that the state in said cause did not assert any such liability against appellees and that appellees did not intend to confess such liability in their answers; that it was the purpose and intent of both the state and the defendants in said .cause that the state recover alone what it was entitled to under the law, namely, premium taxes on the gross amount of premiums received by appellees less cancellations, and deduction for taxes paid on reinsurance of appellees ' business by other companies; that except for such mistake the decree that was entered would not have been entered, but instead the decree now sought in this cause would have been entered.
The court below granted the prayer of appellees' bill and entered the decree that was intended to be entered in the said receivership cause. Appellant contends that the court was without authority to so decree; that although the decree that was entered in said receivership cause would not have been entered except for said mistake of appellees in making discovery in their answers in said cause, still appellees have had their day in court and there is no remedy at a subsequent term of the court to correct said mistake.
Where through accident, mistake, or fraud a judgment or decree is incorrectly entered arid is not the judgment or decree which would have been entered had not such accident, mistake, or fraud intervened, then in such case a court of equity will afford relief and correct such judgment or decree. The power of a court of equity in such a case does not depend upon nor is it restrained by section 1016, Code of 1906 (section 736, Hemingway's Code), but is an independent ground of equity jurisdiction. The power of the court of equity in such cases to grant relief is complete. One of the original heads of equity jurisdiction is the power to correct judgments for fraud, accident, or mistake. The jurisdiction of equity in case of accident or mistake is as broad as its jurisdiction in cases of fraud. Where the parties to a cause and the court trying the cause, acting on the belief that a certain state of facts existed, entered a judgment based on such facts, but by reason of mistake as to facts such judgment would work a hardship to any of the parties, equity will give relief. Webster v. Skipwith, 26 Miss. 341; Wilson v. Town of Handsboro, 99 Miss. 252, 54 So. 845, Ann. Cas. 1913E, 345; Brown v. Wesson, 114 Miss. 216, 74 So. 831. In discussing a like question in Webster v. Skipmth, supra, the court quoted with approval the following from Story and Chief Justice Marshall:
" 'That in all cases where by accident, mistake, or fraud, or otherwise, a party has an unfair advantage in proceeding in a court of law, which must necessarily make that court an instrument of injustice, and it is, therefore, against conscience that he should use that advantage, a court of equity will interfere and restrain him from using the advantage.' 2 Story's Eq. Jur., section 885.
"Chief Justice Marshall thus states the rule: 'Any fact which proves it to be against conscience to execute such judgment, and of which the injured party could not have availed himself in a court of law, or of which he might have availed himself at law, but was prevented by fraud or accident, unmixed with any fault or negligence of himself or of his agents, will _ authorize a court of equity to interference.' Marine Insurance Co. v. Hodgson, 7 Cranch (U. S.) 332, 3 L. Ed. 362."
We have here a judgment entered admittedly on account of a misapprehension of the true facts by the parties to the cause and the court entering the judgment; a judgment not authorized by law and a judgment not sought by the complainant. Appellees in their answers undertook .to discover the true amount, namely the gross premiums received by them during the period inquired about, less cancellations and deductions on account of reinsurance. In making discovery they overlooked claiming credit for reinsurance. Both parties were seeking the same facts. There was no misunderstanding between them. They both, misconceived the facts. There could be no controversy as to what the true amount was when the gross amount of premiums received had been shown with the deductions for cancellations and reinsurance. The parties simply intended to have one judgment entered and through mistake they had another and a different judgment entered. We think the case comes clearly within the principles laid down in the authorities cited.
Affirmed and remanded as to the following companies: London & Lancashire Insurance Company, Limited, Palatine Insurance Company of Great Britain, Urbaine Insurance Company, Providence-Washington Company, and Providence Underwriters' Agency Insurance Company.
Affirmed and remanded.