Court Opinion

ID: 7994818
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:35:34.354982+00
Date Added: 2024-06-11T16:35:30.415030
License: Public Domain

Smith, C. J.
(dissenting).
Three of us are of the opinion that the decree of the court below is erroneous and should be reversed; this cannot be done, however, unless a majority should concur therein; consequently, the decree must be affirmed.
*408In order to more clearly state the views of myself and the two of my Associates who concur therein, I will restate the case as made by the record. This cause does not arise on an original bill, but on a petition filed in the cause in which the decree sought to be reopened was rendered. As that was a cause in equity I presume that the power which the court below could here exercise is as broad as it would have been on an original bill. The relief here sought is not simply the correction of a former decree, but the setting aside of that decree and the granting to the petitioners of a new trial as will hereinafter be made to appear.
The record in the original cause was by agreement of counsel considered by the court below when passing on the demurrer to the petition for reopening the former decree and I can best state the ease by beginning with the petition filed in the original proceeding.
While a suit by the state revenue agent was pending in the court below against a large number of fire insurance companies for the collection of penalties alleged to have been incurred by the companies because of violations of the state’s anti-trust laws and in which a large sum of money belonging to the companies and in the hands of their local agents when the suit was begun was impounded and placed in the hands of three receivers, the state of Mississippi by its insurance commissioner and attorney-general intervened therein by a petition alleging an indebtedness to the state by the defendant companies for unpaid privilege taxes praying for a decree therefor, and that the money so due be paid out of the fund belonging to the companies then in court. Section 3 of that petition is as follows:
“Tour intervener further shows that under chapter 69 of the Mississippi Code of 1906, and the amendments thereto, and particularly under section 2625 of said Code, each foreign fire insurance company transacting business in this state, as aforesaid, is required within the *409first thirty days of January and July of each year to make under oath a full and correct statement of the amount of the gross receipts derived from the insurance business obtained from residents of the state or on property located therein during the preceding six months, and is required within the first fifteen days of February and August of each and every year, to pay to the commissioner the taxes elsewhere provided upon the amount of such receipts as returned, and by section 2629 of the Mississippi Code of 1906, as amended by section 31, chapter 104, Mississippi Laws of 1920, such said fire insurance companies are required to pay a tax within the time aforesaid of two and three-fourths per centum of gross earnings, less earned returned premiums, which said taxes are required to be collected by the insurance commissioner and paid into the state treasury, and which, with certain license taxes provided in said section 31, are in lieu of all other taxes to be assessed against or paid by such insurance companies. ’ ’
The petition then alleged that the companies had failed to report their earnings to the insurance commissioner and in section 8 thereof:
“That it is advised and believes, and from such information and belief avers, that it is entitled to have each of said defendants to discover to this court the amount of gross receipts derived from the business conducted by each in the state of Mississippi from July 1, 1920, to January 1, 1921, obtained from residents of this state, or on property located therein, and that when such sum has been discovered intervener is entitled to have and recover of and from the defendants respectively two and three-fourths per centum on such gross earnings, less earned returned premiums, ’ ’ etc.
In their answer to this petition the companies expressly admitted the allegations of the petition, and each for itself set forth specifically the amount of the gross premiums received by it, the amount of the premiums re*410•turned, and most of them also the amount- of reinsurance placed by them with authorized companies, though several of them did not report any such reinsurance. For instance, the discovery by the Fire & Marine Insurance Company of St. Paul is as follows:
“Cross premiums received in the state of Mississippi from July 1, 1920, to December 31, 1920, one hundred seventeen thousand six hundred fifty dollars and forty-six cents; returned premiums, twenty-one thousand four hundred eighty dollars and forty-eight cents; reinsurance with authorized companies, twelve thousand one hundred twenty-seven dollars and twelve cents.”
The amount of the taxes due by this .company was computed on ninety-six thousand one hundred sixty-nine dollars and ninety-eight cents, the difference between the gross and returned- premiums reported by' it, and a decree therefor was entered accordingly. The amount due by the other companies was arrived at in the same way.
It will be observed that the state’s petition sought a decree for two and three-fourths per cent, on the gross premiums received by the companies less earned returned premiums to which the answer of the companies admitted the state was entitled, and in which answer there nowhere appears a claim for a further reduction from the gross premiums of the reinsurance premiums paid to authorized companies. Nearly two years after the rendition • of this decree the petition, which forms the basis of the decree here appealed from, was filed alleging:
“That the said state of Mississippi did not claim or contend that petitioners were indebted to it or should pay to it any other, further or, additional sum than two and three-fourths per cent, on the gross premiums written, less cancellations. ” But “in the final decree entered against said petitioners herein, upon the 4th day of November, 1921, by mutual mistake, both on the part of the complainant find of these petitioners, defendants therein, and each of them, an excessive recovery was had *411against petitioners, and each of them, and a judgment was taken against petitioners, and each of them, for an amount in excess of two and three-fourths per cent, of gross premiums, less cancellations. . . . That the mistake and error grew out of the fact that the discovery did not disclose, and in taking the final decree against these petitioners, it was overlooked and not taken into account, that petitioners, and each of them, carried reinsurance ; that is to say, that they reinsured part of the 'risk written by them and each of them in the state of Mississippi with other fire insurance companies defendants in said petition of intervention, all of whom join herein, the effect of which was that a judgment was taken against each petitioner for the full amount of insurance premiums written by it in the state of Mississippi, less cancellations, and including that which it had reinsured with other companies defendant in said suit, and that a judgment was also taken against said reinsurance companies defendant in said suit for said premiums, thereby making an additional and excessive and erroneous recovery. ’ ’
That “in entering and taking such judgment and decree, by error and mistake it was overlooked that a large portion of the reinsurance in authorized companies carried by petitioners herein was with companies defendant in said suit, against which reinsurance companies, as well as against said direct-writing companies, judgment was taken for said identical premiums. That such judgment and decree would not have been taken in the form and manner in which it was taken had it not been for the inadvertence, mistake and misunderstanding of the complainants and defendants, 'in failing to take into account the fact that the judgments against each of the petitioners herein duplicated the tax on that portion of the business which was reinsured, in the amounts and in the respects hereinbefore set out.”
*412An exhibit to this petition set forth the amount of reinsurance which each company claims to have placed with authorized companies, that were defendants in the original proceeding, and the prayer of the petition is:
That the former decree “be revoked, set aside and vacated, and that a new judgment or decree be rendered against the petitioners herein, fixing the true and correct liability of petitioners herein, in accordance with the actual liability of petitioners and each of them, under the actual facts in the case. ”
A demurrer to this petition by the state was overruled, and it declining to plead further, except as to five of the companies, a final decree was rendered in accordance with the prayer of the petition as to all of the companies except the five whose claim for credit on reinsurance premiums the state intends to contest.
The case was brought to this court by the state by an appeal from the final decree and by an appeal to settle the principles of the case from the interlocutory decree as to the five companies mentioned.
Section 2607, Code of 1906 (section 5070, Hemingway’s Code), on which the appellees’ claim for a credit for the reinsurance premiums paid by them to authorized companies is predicated, provides that:
“Reinsurance premiums paid to companies authorized to do business in Mississippi may be deducted from gross premiums in the semi-annual tax returns, when affidavits are furnished from such authorized reinsuring comparies that the amounts so deducted are included in their own semi-annual tax returns, and are paid on by the authorized reinsuring company. ’ ’
A judgment or decree will not be set aside even on timely application therefor in the court that rendered it and a new trial granted in order that a defense may be made thereto by the party complaining which he was prevented from making when it was rendered by fraud, accident, or mistake, unless his failure to make the de*413fense was unmixed with negligence on his part. “The slightest negligence will defeat the application, or occasion the imposition of the most vigorous terms as a condition of granting it.” To cite authorities for this statement would be supererogatory, but if desired they will be found in 3 Miss. Digest, “New Trial,” section 95 et seq_. The rule governing courts of equity in setting aside judgments and decrees on an original bill therefor is practically the same. Authorities, supra, and also those cited in 2 Miss. Digest, “Judgment,” section 428.
I presume that it will not be controverted that the power of a court of equity to grant relief against former decrees in equity is the same as its power to grant relief from judgments at law, and the rule is, without conflict in the authorities, that a court of equity will not set aside a judgment at law and grant a new trial in order that the defendant therein may interpose a defense thereto not made when the judgment was rendered, unless the defendant was without knowledge thereof when the judgment was rendered and could not have discovered it prior thereto by the exercise of reasonable diligence. 23 Cyc. 1010; 15 R. C. L. 754; Miller v. Gaskin, Smedes & M. Ch. 524; Leggett v. Morris, 6 Smedes & M. 723; Lee v. Hooker, 7 Smedes & M. 601; Meek v. Howard, 10 Smedes & M. 502; Love v. Pass, 14 Smedes & M. 158; Porter v. Kilpatrick, 24 Miss. 414; Webster v. Skipwith, 26 Miss. 341; Hiller v. Cotton, 48 Miss. 593; Buckingham v. Wesson, 54 Miss. 526; Miller v. Palmer, 55 Miss. 336.
In Leggett v. Morris, 6 Smedes & M. 723, the complainant sought to have a judgment at law set aside and a new trial granted in order that he might plead the want or failure of consideration for the note sued on. In affirming the decree of the lower court dismissing the bill this court, or rather its predecessor, the high court of error and appeals, said:
“The complainant was in court, contesting the suit, but never even raised this question as a defense; and his *414excuse is, that he did uot come to the knowledge of these facts until it was too late to use them on the trial. This showing is not sufficient. In the case of Miller v. Gaskins, S. & M. Ch. R. 524, Chancellor Buckner held a similar allegation to be insufficient. He said, ‘It is not sufficient that the defendant did not know of the grounds of defence at the time of trial; it must appear that he could not have obtained such knowledge by the use of ordinary diligence.’ ”
In Buckingham v. Wesson, 54 Miss. 526, Mrs. Buckingham, the administratrix of the estate of her deceased husband, sought by a cross-bill to have a judgment against the deceased on a note on which he was surety set aside in order that she might plead payment in part thereto. Her cross-bill alleged:
“That Cocke, the principal, had partly paid the Walker note on which her husband was surety, taking a receipt which he had in his lif etime, and which she has since the judgment found among old papers; that at the trial she did not know of this, but, had she then possessed the receipt, she could with it and other testimony have defeated a recovery. ’ ’
In affirming a decree sustaining a demurrer to this cross-bill this court said:
“The cross-bill presents no ground for relief of any sort. Its allegations as to the receipt showing a right to a credit on the note to Walker fall short of the well-settled rule of diligence required in such cases. ’ ’
In Miller v. Palmer, 55 Miss. 323, in answering the question, “When will a court of equity relieve against a judgment at law?” this court again said:
“A party will not be aided after trial at law unless he can impeach the justice of the verdict on grounds of which he could not have availed himself at law, or was prevented from doing so by fraud, accident, or the act of the opposite party, -unmixed with negligence or fault on his part. . . .
*415“The jurisdiction rests on the ground, not merely that the defense was good, but that it was not known to the party at the trial, and that negligence and laches are not imputable to him. The settled doctrine in this state is that, if the defense could have been made at law (although a court of equity had concurrent jurisdiction), and was not made, the complainant must show two facts; first, that the defense is good and ought to have been successful ; and, second, the failure to make it must be satisfactorily explained. ’ ’
Turning now to the case at bar and examining the allegations of the petition in the light of these decisions it becomes manifest that no case for relief is made thereby. The petition does not allege that the petitioners did not know that they had reinsured a part of their risks, or that they did not know that the companies in which these risks were reinsured had also reported the premiums and would be taxed thereon. The allegation simply is:
“That the discovery did not disclose, and in taking the final decree against these petitioners, it was overlooked and not taken into account, that petitioners, and each of them, carried reinsurance. ’ ’
And again that: “In entering and taking such judgment and decree, by error and mistake it was overlooked that a large portion of the reinsurance in authorized companies carried by petitioners herein was with companies defendant in said suit.”
Consequently no case for relief is made by the petition. ‘ ‘ To overlook is to pass over without notice, whether intentionally, or through carelessness or inadvertence.” Webster’s New International Dictionary.
The petitioners could not have been ignorant of the fact that they had reinsured a. part of their risks; indeed the answers of most of them disclosed such reinsurance. And information that the reinsurance premiums were also reported by the reinsurance companies could have been ascertained by simply inquiring of those companies. *416Moreover, the statute under which credit for reinsurance premiums is claimed expressly charges the companies claiming it with the duty of ascertaining from the companies with which the reinsurance was placed whether or not the tax thereon has been paid.
The petition alleges that the failure of the petitioners to obtain credit for the reinsurance premiums was caused ‘ ‘by mutual mistake both on the part of the complainant and of these petitioners, defendants therein,” but it is manifest from the original petition and answer thereto that the complainant was in no way a party to the mistake. The petition on which the decree for the tax was rendered alleged that the insurance companies were due the state two and three-fourth per cent, on the gross premiums received by them, less unearned returned premiums, and prayed for a discovery and recovery accordingly. • The reinsurance premiums were of no concern to the state, unless a claim to a credit therefor had been made by the companies under section 2607, Code of 1906 (section 5070, Hemingway’s Code).
The cases cited in the opinion of my associates do not support the decree of the court below. In Wilson v. Town of Handsboro, 99 Miss. 252, 54 So. 845, Ann. Cas. 1913E, 345, no judgment or decree was set aside and a new trial granted. What there happened was that a circuit court had rendered a judgment sustaining a demurrer, which was erroneously entered on the minutes of the court as a judgment overruling the demurrer, and it was held that this judgment could be corrected at a subsequent term and the judgment which the court had actually rendered be entered. The case therefore is not here in point.
In Webster v. Skipwith, 26 Miss. 341, the court stated that the new trial there awarded came within the following statement of the rule therefor made by Chief Justice Marshall in Marine Ins. Co. v. Hodgson, 7 Cranch, 332, 3 L. Ed. 363:
*417“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 his agents, will authorize a court of equity to interfere.” (Italics mine.)
This case, therefore, instead of supporting the decree of the court below, is to the contrary.
Brown v. Wesson, 114 Miss. 216, 74 So. 831, was also not a case in which a former judgment or decree was set aside and a new trial granted. In that case an original bill was filed to correct an error in a decree in a partition proceeding. The commissioners appointed to make the partition intended to and reported to the court that they had set apart to each of the cotenants two hundred ten acres of land, and a decree was rendered confirming the partition as set forth in the commissioners’ report. The bill for the correction of this decree alleged that in making the partition the commissioners and their surveyor erroneously described the boundaries of the various allotments resulting in inequalities in the division of the land and praying that the former decree be corrected so as to apportion the land as the commissioners intended. This court held that the decree should, be corrected so as to conform to the intention of the commissioners in apportioning -the land. It will be observed from the report of that case that it was manifest from the description of the lots into which the land was subdivided by the commissioners that their intention of allotting to each cotenant an equal number of acres had not been carried out and that the mistake which produced the inequality in the allotment was not brought about by any of the parties to the cause, but by the commissioners appointed by the court to make the allotment. It is therefore not here in point, for the complaint here is not that a mistake was made by an officer of the court and carried forward into the decree, *418but that a defense to the decree was overlooked by the defendants thereto when the decree was rendered.
There must be an end to litigation, and the rule governing the setting aside of judgments and decrees and the awarding of new trial as hereinbefore set forth is one of the rules on which this court has heretofore uniformly acted in order to accomplish that purpose, and should be adhered to here.
There is another reason why the former decree should not be set aside. The prayer of the original petition herein that the taxes due the state by the companies be ordered paid out of the money in the hands of the receivers was not granted, simple judgments therefor only being rendered against the companies. Under section 2607, Code of 1906 (Hemingway’s Code, section 5070), under which the credit for reinsurance premiums is 'claimed by the appellees, reinsurance premiums may be deducted from a company’s gross premiums in computing the tax thereon only when the amounts so deducted are reported and “paid on by the authorized reinsuring company.” In other words, the statute provides that reinsurance premiums may be deducted from gross receipts when the tax thereon has been paid by the reinsuring company and not when a judgment, which may or may not be paid, has been obtained by the state against the reinsuring company. On the original trial a reinsuring company may have had the right to object to'a judgment being taken against it for the tax on a reinsurance premium that was included in the judgment against the company first receiving the premium, but the latter company would have had the right to a deduction therefor from its gross receipts only by making it appear that the tax thereon had been paid by the reinsurance company.
I am requested by Judges Cook and Ethridge to say that they concur in the views herein expressed.