Court Opinion

ID: 9778827
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:21:59.318798+00
Date Added: 2024-06-11T07:33:13.640897
License: Public Domain

On Appellant’s Amended Motion for Rehearing
Appellant’s motion for rehearing (original and amended) contains thirty five points which are supported by a brief containing 123 pages. We will discuss and decide, as briefly and succinctly as possible, the questions presented and not heretofore discussed and decided.
In our original opinion we stated that appellant had no point or brief directed to the unconstitutionality of Sec. 11, Art. 21.28, V.A.T.S. We can no longer make this statement. Appellant points to Art. 1, Sec. 3, Art. 3, Secs. 56 and 57, Constitution of Texas, Vernon’s Ann.St., and the Fourteenth Amendment to the United States Constitution as being violated in the passage and application of this, statute.
Appellant’s main premise is that Sec. 11 is a local or special law enacted under the guise of a general law since it “is applicable only to the receiver — liquidator of an insurance company and that as such it discriminates in favor of such individual and against all other receivers who may be lawfully appointed under the laws of the State of Texas.”
We believe appellant’s view of Sec. 11 is too narrow. It is only a small part of a code of law providing for the regulation of the insurance business, a business affected by the public interest. The emergency clause to the code as passed in 1951 recites that certain facts exist “making it practicable and necessary that such laws (insurance) shall be made clear, concise, adequate and consistent for the protection of the insuring public as well as for the protection of those engaged in the insurance business.”
The classification to be appraised as reasonable or discriminatory is the one made by the Legislature in separately legislating for insurance companies, solvent or insolvent. We have no doubt upon this matter. The history of classifying insurance companies for special legislative treatment and the need for such classification is too long and too complex to be noted here but it is a matter of common knowledge. We find no constitutional infirmity in Sec. 11.
Appellant questions the authority of the Receivership Court to cancel outstanding insurance. We do not agree. As a general rule a receiver may adopt or breach a contract of his principal. 11-A Tex.Jur., Corporations, Sec. 629, 36 Tex. Jur., Receivers, Sec. 77. Whether the cancellation of insurance policies was a breach of the contract of insurance, we do not decide. We do hold that the receiver had authority, with the court’s approval, to cancel such policies even if the contract were breached.
Since appellant was not a party to any of the insurance contracts, we decline to pass upon his contention that the order can-celling the policies was invalid because of lack of notice to the policyholders.
We also overrule appellant’s contention that Sec. 3(g) of-Art. 21.28 insofar as it denies the right of offset to claims purchased after commencement of delin*683quency proceedings with the view to its being used as an offset is unconstitutional because of a defective caption of the Act in which it was contained. We quote from its caption:
“An Act providing for the amendment of Article 21.28 of the Texas Insurance Code of 1951, such Act concerning the liquidation, rehabilitation, reorganization, or conservation of insurers, and placing same under the Board of Insurance Commissioners; defining certain words and phrases used in this Act; * * * fixing the rights of interested parties; * * * providing for offsets; * * * Ch. 267, p. 737, Acts 54th Leg., Reg. Session, 1955.
It is contended that this caption is inadequate under Sec. 35, Art. 3, Texas Constitution.
It is our opinion that the provisions of Sec. 3(g), Art. 21.28 of the Insurance Code are fairly within the object expressed in the caption to the 1955 Act.
Appellant also requests that our opinion be clarified. We gladly comply.
As to any one policy the maximum liability of appellant would be the amount of premium collected and not paid over or the amount of uncollected earned premium whichever sum is greater. If part of an earned premium was paid to appellant but not forwarded to the company, appellant’s liability would not be augmented thereby. To hold otherwise would allow double recovery for a single liability.
As to appellant’s liability for commissions on policies written by him but unpaid, appellant poses this illustration:
“ * * * if the total policy of insurance was $120.00 and Appellant owed Appellee one-fourth of that amount, he would owe exactly $30.00. On the other hand if Appellant owes one-fourth of $90.00, which is the amount of premium involved for the entire year, he would owe $22.50. If he owed the full $30.00 as return commissions less $7.50 as earned commission, he would owe to Appellee the sum of $22.50 as the return. Obviously this would mean that under one computation he would owe $45.00 and under the other computation he would owe only $22.50.”
We are not sure we fully understand appellant but we agree, under his example, that the total commission is $30 and the earned commission being $7.50, appellant would owe a return commission of $22.50.
Other points presented have been disposed of in our original opinion.
The motion is overruled.
Motion overruled.