Case Name: State of Missouri at the Relation and to the Use of Abeille Fire Insurance Co. et al., Relators, v. Nike G. Sevier, Judge of the Circuit Court of Cole County
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1934-06-05
Citations: 335 Mo. 269
Docket Number: 
Parties: State of Missouri at the Relation and to the Use of Abeille Fire Insurance Co. et al., Relators, v. Nike G. Sevier, Judge of the Circuit Court of Cole County.
Judges: All concur, except Leedy, J., not sitting, and Ellison, J., absent.
Reporter: Missouri Reports
Volume: 335
Pages: 269–295

Head Matter:
State of Missouri at the Relation and to the Use of Abeille Fire Insurance Co. et al., Relators, v. Nike G. Sevier, Judge of the Circuit Court of Cole County.
— 73 S. W. (2d) 361.
Court en Banc,
June 5, 1934.
R. J, Folonie, Igoe, -Carroll, Higgs <& Keefe, Ragland, Otto & Potter, F. D. Süber and F. B. Morrison for relators.
Roy McKittrich, Attorney-General, and Gilbert Lamb, Assistant Attorney-General, for respondent.
John T. Barker, Floyd E. Jacobs and Glenn G. Weatherby, Special Counsel for the Superintendent of the Insurance Department.

Opinion:
FRANK, C. J.
— Prohibition: One hundred and forty stock fire insurance companies, relators herein, seek to prohibit respondent judge from enforcing a judgment for restitution rendered by him on May 26, 1933, under a motion filed by the Superintendent of Insurance asking restitution of certain excess fire insurance premiums alleged to have been collected by relators pending actions brought by them to review and set aside a rate reduction order made in October, 1922, by Ben C. Hyde, then Superintendent of Insurance, reducing fire, windstorm and hail insurance rates in Missouri ten per cent. Our provisional rule issued, to which respondent made return and relators moved for judgment on the pleadings.
The facts necessary to a determination of the questions raised may be summarized as follows:
On January 5, 1922, Ben C. Hyde, then Superintendent of Insurance, pursuant to statutory authority, ordered that fire, windstorm and hail insurance rates in Missouri be reduced fifteen per cent. The stock insurance companies affected by such order, brought suit in the Circuit. Court of Cole County, seeking to enjoin the enforcement of said reduction order. .While this action was pending the plaintiff companies and the Superintendent of Insurance stipulated and agreed that said injunction suit should be dismissed, the reduction order withdrawn, that not earlier than March 15, 1922, the Superintendent of Insurance should call a hearing to investigate the necessity for a reduction of insurance rates, and if on such investigation, he again ordered a reduction in rates, and the insurance companies were dissatisfied with such reduction, they would proceed to secure a review of such reduction order in the Circuit Court of Cole County. The stipulation, among other things further provided :
"That no injunction suit shall be applied for in said matter restraining the enforcement of said order, but pending such review and until the final determination of said cause in whatever court it may be finally lodged, the rates in force prior to the making of such order shall be collected by such insurance companies, and such insurance companies shall give bond conditioned and in such amount as the court may direct, to refund to the assured any excess of premiums collected by them if such order of the Superintendent of tbe Insurance Department be finally sustained by decree or judgment of a court of last resort. That in such matter the question of the constitutionality of Sections 6283 and 6284, Revised Statutes of Missouri, 1919, shall not be raised, nor shall the legality of the hearing above provided for be questioned."
Thereafter on October 9, 1922, the Superintendent of Insurance ordered that fire, windstorm and hail insurance rates in Missouri stand reduced ten per cent effective November 15, 1922. On November 10, 1922, the insurance companies, relators herein, proceeded by suit in the Circuit Court of Cole County, seeking a review of said reduction order. On the same day said circuit court made an order authorizing said companies, pending the review, to collect the rates of premiums in force prior to October, 9, 1922, upon giving a bond in the amount of $500,000 "with terms and security to be approved by the court.. On the same day said insurance companies filed a bond as required by said order. In 1923 they filed an additional bond in the same amount. No further bonds were required or given. The suit to review the ten' per cent reduction order went to judgment in the circuit court on December 22, 1924. The judgment of the circuit court set aside the ten per cent reduction order and the Superintendent of Insurance appealed to this court. On June 23, 1926, this court reversed the judgment of the circuit court and at that time entered judgment in said cause, a copy of which will appear later. '
Thereafter the insurance companies applied for and obtained a writ of certiorari to the Supreme Court of the United States. Later, on January 3, 1928, that court dismissed the writ of certiorari. [Aetna Insurance Company v. Hyde, Superintendent, 275 U. S. 440.] Afterwards on February 14, 1928, the insurance companies filed separate actions in the United States District Court at Kansas City and obtained a temporary injunction in each case enjoining the Superintendent of Insurance and the Attorney-General from enforcing such reduction order. After an unsuccessful hearing of these injunction suits in the United States. District Court (Aetna Insurance Company v. Hyde, 34 Fed. (2d) 185), the companies appealed to the United States. Supreme Court where the judgment of the lower court was affirmed. [National Fire Insurance Company v. Thompson, 281 U. S. 331.] This judgment marked the end of the litigation over the reasonableness of the ten per cent reduction order.
On June 16, 1930, Joseph B. Thompson, successor to Ben C. Hyde, insurance commissioner, filed in this court a petition in the ease of Aetna Insurance Company et al. v. Hyde, seeking to compel said insurance companies to restore the ten .per cent excess premiums collected by them pending the litigation. This court on January 9, 1931, refused to take jurisdiction for the reasons stated in an opin ion banded down at tbat time. [Aetna Insurance Company et al. v. Hyde, 327 Mo. 115, 34 S. W. (2d) 85.]
Thereafter on February 18, 1931, said Thompson filed in the Circuit Court of Cole County in said ease of Aetna Insurance Company et al. v. Hyde, a motion for restitution, being the motion upon which respondent based the orders and decrees and exercised the jurisdiction of which relators complain in the present prohibition proceedings.
On February 21, 1931, the insurance companies were given leave to plead to said motion within ten days. On February 26, 1931, relators filed petition and bond for removal of said motion to the United States District Court. After denial of said petition for removal, the record was certified to the United States District Court where on April 31, 1933, the cause was remanded to the Circuit Court of Cole County, where the motion was set for hearing on May 26, 1933. Relators filed what they styled, "return and answer to said motion." On the date last aforesaid the cause was heard by the circuit court and judgment of restitution was rendered against relators. Relators seek by this prohibition proceedings to prohibit the circuit court from enforcing said judgment for restitution on the ground that said court was without jurisdiction to render the judgment.
It has been finally adjudicated that relators owe and stand indebted to its policyholders for the ten per cent excess in premiums collected from them after the effective date of the ten per cent rate reduction order, which was November 15, 1922. [Aetna Insurance Company v. Hyde, 315 Mo. 113, 285 S. W. 65; Aetna Insurance Company v. Hyde, 34 Fed. (2d) 185; National Fire Insurance Company v. Thompson, 281 U. S. 331.]
In relators' suit to review the ten per cent rate reduction order, the Circuit Court of Cole County set such order aside. On appeal to this court we held that the facts justified the reduction in rates, and reversed the judgment of the circuit court. [Aetna Insurance Company v. Hyde, 315 Mo. 113, 285 S. W. 65.] Upon reversing the cause, we entered the following judgment therein:
"Now at this day again come the parties aforesaid by their respective attorneys and the court being here now, sufficiently advised of and concerning the premises doth consider and adjudge that the judgment aforesaid, in form aforesaid, by the said Circuit Court of Cole County rendered, be reversed and annulled and for naught held and esteemed, and that said appellant be restored to all things which he has lost by reason of said judgment. It is further considered and adjudged by the court that said cause be and the same is hereby dismissed and that said plaintiff recover against said respondents his costs. and charges herein expended and have execution therefor.":
In due time our mandate was sent to tbe circuit court where the Superintendent of Insurance thereafter, in due time, filed a motion on behalf of the policyholders asking that relators be required to make restitution. Upon a hearing of that motion the circuit court ascertained the amount of excess premiums collected by-each relator from and after November 15, 1922, the effective date of the rate reduction order, rendered judgment for said amounts with interest, and adjudged that relators make restitution by depositing in court the amounts adjudged to be due from them. The object of the present proceedings is to prohibit the circuit court from enforcing the judgment of restitution.
It is contended that the circuit court was without jurisdiction to entertain the motion for restitution.
Relators' theory is that when the circuit court rendered final judgment setting aside the reduction order without retaining jurisdiction for further proceedings, and when on appeal we reversed the judgment of the circuit court and dismissed the cause, the case was ended, the parties were out of court, and hence the circuit court was without jurisdiction for any purpose.
The exact question which relators are now presenting was decided contrary to their contention by this court en bane in the recent case of Aetna Insurance Company v. Hyde, 327 Mo. 115, 34 S. W. (2d) 85. That case involved the same rate reduction order and the same facts which are involved in this case. That case arose on a motion for restitution filed in this court.1 We denied the motion, not on the ground that relators should not be required to make restitution, but for other reasons which are not material here. However, in course of the opinion in that case we decided the question of jurisdiction which relators are presenting in this case. We there said:
"However, dismissal of the proceeding by the appellate court and its failure to remand the cause or direct restitution do not deprive the trial court of jurisdiction to restore to appellant any rights of which he was wrongfully deprived by its erroneous judgment."
Above case cites approvingly the case of Fleming v. Riddick's Exr., 50 Am. Dec. 119. The court there said:
"A judgment or decree when reversed is a mere nullity, and the party aggrieved has a right to be restored to what he has lost by reason of such erroneous decision. He is consequently entitled to such appropriate remedies as the law gives to one whose money or property is withheld by another, against his better right. But the court whose judgment or decree is reversed ánd annulled, having by its own act occasioned the wrong, possesses an inherent and summary jurisdiction to afford ' the redress, without reference to the particular nature of the controversy which it had erroneously determined. . . . The power of a court to repair the injury occasioned by its own wrongful adjudication, is not derived from a mandate of the appellate forum, made upon rendering tbe judgment or decree of reversal, but is substantially tbe same which it exercises when its own process has been abused, or used without authority, by its suitors or ministerial officers. . . . "When a judgment or decree for the defendant is reversed, then the appellate court in proceeding to render such judgment or decree as the court below ought to have rendered, gives to the plaintiff the relief to which he is entitled; but when a judgment or decree for the plaintiff is reversed, then the appellate court, in proceeding to render such judgment or decree as the'court below ought to have rendered, dismisses, in appropriate language, the plaintiff's action or suit. In the latter case, there is no adjudication in the appellate court of the question of restitution, but the mandate for it follows as a declaration or designation of the legal effect of the adjudicated reversal and dismissal."
A kindred question was determined by this court in the case of Lanyon v. Chesney, 209 Mo. 1, 106 S. W. 522. That case was before this court on a former appeal where a judgment in favor of plaintiff was reversed and the cause remanded. [Lanyon v. Chesney, 186 Mo. 540, 85 S. W. 568.] After the mandate reversing and remanding the cause reached the circuit court, plaintiff voluntarily dismissed the cause, paying all accrued cost. After the cause was dismissed, the defendant filed a motion to set aside the order of dismissal, to reinstate, the cause, and for restitution of the premises. Plaintiff resisted this motion on the grounds that the dismissal of the cause divested the court of all jurisdiction in the premises as to any feature of the motion. The trial court held that plaintiff had a lawful right to dismiss his case, and for that reason refused to reinstate it, and overruled the motion as to all grounds - except the one calling for restitution. Upon a hearing on that ground of the motion, the court rendered judgment awarding restitution, from which judgment an appeal was taken to this court. We affirmed the action of the trial court in awarding restitution after the cause had been dismissed. In doing so, we said:
"We entertain no doubt as to the right of defendants to have restored to them, as against the, other parties to this action, any property or property rights of which they were deprived and which plaintiff acquired under.the first judgment, whether by execution or otherwise, and that such right will not be in any way affected by plaintiffs' dismissal of their suit after obtaining possession of such property. . , . And this, too, without regard'to the merits of the original cause of action or grounds of defense."
It has been held that the reversal of a judgment for want of jurisdiction does not prevent either the reviewing or trial court from compelling restitution. [2 R. C- L. .296, 297; Aetna Insurance Com pany v. Hyde, 327 Mo. 115, 120, 34 S. W. (2d) 85.] In tbe suit to review the rate reduction order, neither the failure of the circuit court to recite in its judgment that jurisdiction was retained for further proceedings, nor the decree of this court reversing the judgment of the circuit court and dismissing the cause, rohbed the circuit court of jurisdiction to award restitution. This is so because "The court whose judgment or decree is reversed and annulled, having by its own act occasioned the wrong, possesses inherent and summary jurisdiction to afford the redress." [2 R. C. L. 296, 297.]
It is settled law that upon the mere reversal of an erroneous judgment, without more, the appellant is entitled to have restored to him all property and property rights which he lost by reason of such erroneous judgment. Relators do not dispute this rule of law but contend that an appellant is driven to an independent action to obtain restoration, except in cases where the reviewing court which reverses the erroneous judgment either itself awards restitution or remands the case to the circuit court for that purpose. The contention in the instant case is that the Circuit Court of Cole County which set aside the rate reduction order, lost jurisdiction of that case by the granting of the appeal to this court, and when this court reversed the judgment of the circuit court and dismissed the cause without remanding it for any purpose, there was then no case pending in either court in which a motion for restitution could be filed.
Ye do not agree with relators' contention for reasons heretofore stated. But there is another reason why the contention is unsound. At the time this court reversed the erroneous judgment of the circuit court we had jurisdiction to enforce restitution but we did not see fit to exercise that jurisdiction. We sent our mandate to the circuit court. That mandate recites, in substance, that the judgment of the circuit court setting aside the rate reduction order is reversed; that appellant be restored to all things which he lost by reason of said judgment, and that said cause is dismissed. When the circuit court receives a mandate from this court, it is the plain duty of the circuit court to enforce that mandate. The recitation in the mandate that appellant be restored to all things which he had lost by reason of said judgment, amounts, in effect, to a specific direction to the circuit court to award restitution. Otherwise why adjudge that restitution be made, and why inform the circuit court by mandate that appellant be restored to his former position ? It was the duty of the circuit court.to carry our mandate into effect. It could not perform that duty except by awarding restitution to appellant, because both our judgment and our mandate provide that such restitution be made.
Regarding relators' claim that the dismissal of the cause by us ended the case, and for that reason there was no pending case in which a motion for restitution could be filed, it may be said that our dismissal of the cause, dismissed relators' alleged cause of action to review the rate reduction order, but it did not take the case out of court so as to deprive appellant of the right to move therein for restitution. ¥e have so held. [Aetna Insurance Co. v. Hyde, 327 Mo. 115, 34 S. W. (2d) 85; Lanyon v. Chesney, 209 Mo. 1, 106 S. W. 522.] Especially is this true, in view of the fact that we specifically adjudged that restitution be made to appellant, before we adjudged that said cause be dismissed. For all the reasons heretofore stated, we hold that the circuit court had jurisdiction to entertain and determine the motion for restitution.
It is contended that the circuit court had no jurisdiction to order that relators make restitution in any manner other than that provided in the order made and entered by said court in the review suit on November 10, 1922. .
When the suit to review the rate reduction order was filed in the circuit court, that court, pursuant to a stipulation of the parties, made and entered of record an order, the pertinent parts of which read as follows:
"Now therefore it is by the court ordered that the plaintiffs be and they are hereby authorized, pending the review of said order and until the final determination of this suit, to collect the rates of premium in force prior to the making of said rate reduction order ; provided, plaintiffs shall within five days from this date give bond, with terms and security to be approved by this court, or the judge thereof, in vacation, in the sum of Five Hundred Thousand ($500,-000.00) Dollars, to the defendant herein, for the use and benefit of all persons, firms and corporations to whom policies of fire, lightning, hail and windstorm, insurance covering property in this State may be issued by plaintiffs or any of them, on and after November 15, 1922, and prior to the entry of final decree in this case, conditioned that if said rate reduction order should be finally sustained by a final decree of court, then that each of the plaintiff insurance companies shall send notice by mail forthwith to each assured entitled to a refund of premium, as shown by its books, stating the amount of refund due and shall refund, within thirty days after its receipt of written demand by the party entitled -thereto, the difference between the amount collected by such plaintiff as premium upon each policy of fire, lightning, hail and windstorm insurance, issued by such plaintiff between November 15, 1922, and the date of such final decree, covering property in this State, and the sum which such plaintiff would be entitled to collect as premium upon such policy according to the terms of said rate reduction order, demand for such refund to be made in writing either upon an authorized agent in this State of the company from whom such refund is due, or upon the Superintendent of the Insurance Department of this State, within ninety days after the sending of such a notice."
That part of the order authorizing relators to collect, pending the review suit, the rates of premium in force prior to the making of the rate reduction order, was invalid and non-enforceable when made, because in violation of Section 6284, Revised Statutes 1919, which provides that during the pendency of a suit to review a rate reduction order, the insurer shall not charge any rate or premium in excess of that fixed by the Superintendent of Insurance. However, as the insurance companies obtained the fruits of the invalid order by collecting, - pending the review suit, the rates in force prior to the making of the rate reduction order, they are estopped to assert the invalidity of the order. The remaining part of the order which attempts to detail the manner in which the refund shall be made in event the rate-reduction order should be upheld, is of no effect for two reasons, (1) because neither the Superintendent of Insurance, nor the attorneys representing him, had authority to approve the making of such an order, and (2) because the order as made is void on its face.
Upon the rendition of the final judgment upholding the rate reduction order, it then became the duty of the insurance companies to restore to the policyholders the excess in premiums collected from them pending the review suit, without waiting for any demand to be'made therefor.
The only time limit upon the policyholders' right to enforce restoration is the Statute of Limitations, yet the effect of the court order upon which relators seek to stand, is to condition the right of the policyholders to a refund, upon their making written demand therefor within ninety days from the date a written notice of such refund is mailed to them by relators. Such an order is contrary to both the spirit and the letter of the law, and if enforced, would take from the policyholders rights which the law guarantees to them. The Superintendent of Insurance is a public official and represents the policyholders by virtue of his office and the laws defining his duties. His only authority in that behalf was to get for the policyholders their rights under the law. Neither he nor the attorneys representing him had authority to stipulate away any lawful right of the policyholders concerning such refund, or consent to the making of a court order that would have that effect. The order being. void on its face, the court was not bound to follow it in adjudging restitution. Neither is the Superintendent of Insurance, as representative of the policyholders, es-topped to assert the invalidity of the order, because it neither, benefited him nor harmed relators. The only possible result of the enforcement of such an order would inure to the benefit of the insurance companies and not to the policyholders.
There is another reason why the court was not bound to follow this order in adjuding restitution. The order was made in the review suit but it was not included in or made a part of the judgment in that case. Section 1072, Revised Statutes 1929, provides that every direction of a court or judge made or entered in writing and not included in a judgment, is denominated an order. We construed this statute in the ease of Leavenworth Terminal Ry. & B. Co. v. Atchison, 137 Mo. 218, 37 S. W. 913. In that case the court made an order during the progress of a cause. Later, and at a subsequent term, the court set the order aside. Contention- was made that the order was, in effect, a final judgment and could not be set aside at a subsequent term. In denying that contention, we said:
"We do not agree that the action of the court in setting aside the report of the commissioners was a judgment. It was no final determination of the rights of the parties. It was a mere order or direction of the court, which remained under its control, subject to be recalled or set aside at any time before the proceedings were finally disposed of. [Revised Statutes 1889, sec. 2208.]"
The order in question which attempted, to detail the manner in which a refund should be made in event the rate reduction order was finally sustained, was made when the review suit was. filed, but it was not included in the judgment in that case. The final judgment in that case dealt only with the validity of the rate-reduction order. In the situation presented, the order was under the control of the court at all times, and could have been set aside at any time before the case was finally disposed of. While the court did not formally set the order aside, its refusal to follow it in adjudging restitution, amounted, in effect, to a recall of the order.
Relators further contend that when the judgment of the circuit court was reversed and the cause dismissed by this court, the Superintendent of Insurance was restored to his rate order of which he had been deprived by the decree of the circuit court and restitution was complete.
In support of this contention, it is argued that the insurance companies did not get the excess premiums by reason of the erroneous judgment of the circuit court, and for that reason they cannot be compelled to restore such premiums upon the reversal of that judgment. A sufficient and complete answer to th'is contention is that by stipulation made in the cause, relators agreed to refund the excess premiums in event the rate reduction was finally sustained. That order has been finally sustained. If the stipulation bound the insurance companies to do what they agreed to do, which it did, then there is no basis for the argument that the reversal of the circuit court judgment did not entitle the policyholders to restitution of the excess premiums.
It is contended that the Superintendent of Insurance cannot maintain restitution proceedings as representative of the policyholders.
The contention is that the motion does not allege facts which, if true, would authorize the Superintendent of Insurance to act as representative of the policyholders in this proceedings. In the suit to review the rate reduction order, relators treated the Superintendent of Insurance as representative of the policyholders. They agreed with him that they might collect the old premium rate from the policyholders pending the litigation. They agreed with him that in event the rate-reduction order was sustained, «they would refund to the policyholders the excess premiums collected from them pending the outcome of the review suit. They also gave a bond, payable to the Superintendent of Insurance for the use and benefit of the policyholders, guaranteeing to him that they would make such refund. Having thus treated him as representative of the policyholders, they will not be heard to assert the contrary when he calls upon them to do what they agreed to do. In addition to what we have said, leading cases on strikingly similar facts sustain the authority of the Superintendent of Insurance to represent the policyholders in this proceedings. [Aetna Insurance Co. v. Hyde, 327 Mo. 115, 121, 34 S. W. (2d) 85; Ex parte Lincoln Gas Co., 256 U. S. 517, 65 L. Ed. 1070; In re Englehard & Sons Company, Petitioner, 231 U. S. 647, 59 L. Ed. 416.]
It is next contended that the court had no jurisdiction to render individual judgments against the relators under allegations of joint liability contained in the motion.
The circuit court had jurisdiction to determine whether or not the motion alleged a joint or several liability. Our conclusion is that the court had jurisdiction to render the judgment which it did render. However, we need not discuss our reasons for reaching that conclusion because the premises upon which the contention is based, if true, would not go to the jurisdiction of the court. There can be no doubt but what the circuit court had jurisdiction of the subject of restitution and of the parties. Having jurisdiction of both person and subject matter, it had jurisdiction to render a judgment for restitution. The judgment actually rendered, being one for restitution, it was within the jurisdiction of the court, and if erroneous, the act of the court in rendering it, was an error in the exercise of jurisdiction and not a want of jurisdiction.
It is contended that the court was without power to make the order appointing four referees and requiring relators to make a deposit of $70,000 to pay their fees and the cost and expenses of hearings held by them.
The statutes provide that the court may direct a reference in certain specified cases, and may appoint one or more referees, not exceeding thrée. The ease in question falls within the class of cases specified in the statute in which the court would be authorized to direct a reference and appoint the required number of referees, not exceeding three. [Sees. 975, 976 and 977, B. S. 1929.] There is, however, no authority for appointing four referees and requiring a deposit to pay their fees and the expenses of hearings held by them, in the face of a statute which limits the number which may be appointed to three.
Other questions raised by relators do not go to the jurisdiction of the court.
Our conclusion is that our provisional rule should be made absolute to the extent of prohibiting the enforcement of the order appointing four referees and requiring relators to make a deposit of $70,000, but as to all other matters, the rule should be discharged. It is so ordered.
All concur, except Leedy, J., not sitting, and Ellison, J., absent.