Court Opinion

ID: 9682732
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:15:33.060485+00
Date Added: 2024-06-11T18:17:40.959130
License: Public Domain

Mr. Justice Smith
concurring.
This concurring opinion is written if for no other reason than to make clear the present position of the writer as to some phases of the parent case of State Board of Insurance v. Betts, this volume 83, 308 S.W. 2d 846. The paramount reason is to point out that in my opinion the public interest would be best served if this Court would voluntarily admit that some expressions in that case need to be overruled. I am in favor of holding that the orders in the present cases are void and in doing so I favor retreating from the holding in the former case which permits the District Court to act in a situation where the statute (Art. 21.28) places the exclusive discretionary power in the State Board of Insurance and the Commissioner of Insurance. The basic question in the former case and the present cases is whether the orders of Respondent Betts are void or merely erroneous. It is my opinion that the Respondent Betts has no authority to act by fiat in exercising his judicial powers under Article 21.28, Vernon’s Annotated Civil Statutes. The respondent should be caused to realize that he can only act judicially. Article 21.28, supra, is constitutional, and it is clear to me that it was the intention of the Legislature to vest in the relators the exclusive administrative power of liquidation of insurance companies. This being true, the order in Cause No. A-6870, this volume 624, 315 S.W. 2d 286 increasing the salaries of three attorneys for the liquidator-*621receiver, and the order in Cause No. A-6901, appointing V. F. Taylor as receiver in the receivership cases pending in the 98th District Court, are void. In my opinion, this should be declared the law even in a situation such as existed in the former case.
In the former case, it was claimed that the then Board of Insurance Commissioners failed to appoint an attorney for the liquidator and this Court justified and held not void the action of the Court in making such appointment. We said that “in our opinion the Texas Statute (Art. 21.28) does not vest the State Board and its Commissioner with the sole and exclusive power to appoint counsel under any and all conditions.” It is this holding with which I now disagree. In the former opinion we said: “* * * Once liquidation has begun, the Court is not rendered powerless to carry out its heavy responsibilities by a nonperformance or misperformance on the part of the Board or its Commissioner. It follows that an order of the Court appointing an attorney to assist in liquidation proceedings is not void.”
If this holding is permitted to stand nothing but chaos and confusion can result. A court can, as it obviously has in the present case, under an honest belief he is carrying out his judicial responsibility, create situations in order to exercise powers not given to him by the statute. The respondent has not changed his position since the opinion in the former case was announced. He maintains now that Article 21.28, supra, of the Insurance Code is directory and not mandatory, and that the court has the power to appoint attorneys and fix their compensation. He maintains that the court has the exclusive power and duty to appoint a duly qualified person as receiver, irrespective of the provisions of Article 21.28, supra. He maintained the same position in the former case.
It may be argued that the Legislature is the body which has the duty to define the duties and responsibilities contemplated by the Act. I maintain that the Legislature has clearly defined the duties and responsibilities of the Board of Insurance and the Commissioner. The duty and responsibility under the present law clearly rests with the Board and the Commissioner and not the court. The administration of liquidation of insurance companies is not the responsibility of the court in the sense that the Respondent Betts would have us believe. He thinks that in order to carry out his duties as a Judge under this statute he must have the authority to appoint attorneys in whom he has trust. In this the respondent has a misconception of his responsibility and his duties. He is accountable only for the proper exer*622cise of the judicial functions required of him under Article 21.28, supra. The Respondent Betts is not accountable as to whether or not the Liquidator-Receiver is a suitable person. The statute places that responsibility squarely with the relators. Why should the Respondent Betts be so concerned about the amount of compensation paid to the attorneys for the Liquidator-Receiver? That responsibility is placed with the State Board of Insurance under the provisions of Section 12(b) of Article 21.28, supra. He is no more responsible for the administration of the liquidation of insurance companies than for the administration of the Railroad Commission or the State Banking Department, or the administration of the affairs of the Commissioners Court of Travis County. A District Court simply does not have the authority or power to revise the discretionary acts of any of these agencies of government except in a judicial proceeding.
The caption amending Article 21.28 in 1955, providing for the mendment of the Texas Insurance Code of 1951, reads in part: “* * * Such Act concerning the liquidation, rehabilitation, reorganization, or conservation of insurers, and placing same under the Board of Insurance Commissioner * * Similar language appears in the caption of the original Liquidation Act in 1939. The District Court’s supervisory powers necessarily must be limited to judicial supervision and cannot under any circumstances be extended to include executive supervision. The District Court cannot conduct hearings without notice, such as was done in this case, and then by judicial flat set aside the acts of the relators, neither can the District Judge substitute his discretion for that of the administrative agency. If nothing else, the separation of power doctrine should apply, assuming, of course, that the Act is constitutional and that under the terms of such Act it is a proper administrative function for the relators to perform in selecting suitable persons to serve as Liquidator-Receiver, to serve as attorneys for such Liquidator-Receiver, and to fix the compensation to be paid such persons. There is nothing in the statute or the common law that vests the District Court with discretion to invade the administrative field in the liquidation of insurance companies. This is so even in the event the relators should fail to act.
The respondents argue that under our former opinion, Respondent Betts had the authority to increase the compensation of the respondent attorneys and that his order increasing such salaries was not an abuse of discretion. I do not agree with the *623contention. The question should be resolved in favor of relators in such positive language as to forever put the subject to rest.
Respondents make the same contention as to the order appointing V. F. Taylor as Receiver. I cannot agree with respondents in their contention that the provisions of Article 21.28, supra, amount to no more than a recommendation by the Legislature, and that the Legislature in fact intended that all administrative power should be vested in the District Court.
Respondents’ contention that the District Court has the exclusive responsibility under what respondents term the “judicial insolvency statutes” enacted prior to the enactment of Article 21.28, supra, in 1939, cannot withstand close examination. Sections 6 and 7 of the Act of 1939 refutes such contention. Section 6 of Article 21.28, supra, provides that in the event of conflict the provisions of the 1939 Act would prevail, and it went further and provided that all laws or parts of laws in conflict with Article 21.28 (1939) were repealed to the extent of such conflict. Section 7, the emergency clause of the Act, stated the emergency to be the fact that there were no adequate laws in the State of Texas for the liquidation, reorganization, or conservation of an insolvent insurance company. The inadequate laws referred to were the same laws Respondent Betts now relies upon as authority for the issuance of the orders under consideration. The Legislature deemed these prior general receivership laws as wholly inadequate in dealing with the liquidation of insurance companies. Hence, Article 21.28, supra, was passed as an emergency measure. The effect of our former opinion was to, in part at least, give effect to the older general receivership statutes and has to a great degree nullified the wholesome provisions of the 1939 Act as amended. This mistake should be corrected immediately. I did not believe at the time that the holding to the effect that the failure of the Board to act was ground for the Court to act would be so far reaching as to cause any court to lose sight of the principal holding in the case.
The writ of mandamus should be granted commending the Honorable Chas. 0. Betts, Judge of the District Court of Travis County, Texas, 98th Judicial District, to expunge, set aside, and hold for naught the order involved herein.
Opinion delivered July 16,1958.