Court Opinion

ID: 9548231
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:00:13.016093+00
Date Added: 2024-06-11T15:18:40.183764
License: Public Domain

CARTER, J.
— I dissent.
The majority opinion holds that the superior court has no jurisdiction in an action which seeks declaratory relief and an injunction against the Insurance Commissioner who, it is charged, is threatening to abuse and exceed his statutory power with respect to assuming control over plaintiff insurance company purportedly because it is in an unstable financial condition. It is pointed out that the commission may seize a company if certain conditions exist either with or without a proceeding in court. (Ins. Code, §§ 1011, 1013.) In the action of which the majority says the superior court did not have jurisdiction, the plaintiff alleges in its complaint ample facts to give the court jurisdiction. The complaint must be accepted as true as the question involved is solely whether the action is one in which the court has jurisdiction It is alleged that the Insurance Commissioner has been investigating plaintiff since its organization and has claimed that plaintiff Vaughn is not a proper person to hold the stock of the plaintiff and that it was insolvent; that plaintiff is solvent;* that during the commissioner’s investigation, his subordinates “exhibited an extreme personal animosity to officers, directors, employees and counsel for plaintiff . and both the financial reports and the reports on the conditions of the company have been motivated by bias and prejudice, and a desire to accomplish the removal of G. Kenneth Vaughn and his family from the insurance business”; *405that as a result of the action of the commissioner and his subordinates and the threat to take the specified action irreparable injury has resulted and will result; that a new and unimpeachable board of directors for plaintiff has been elected and “There is not, and there is no claim by defendants that there is, any hazardous conditions in the management of plaintiff company under' present management; no member of the Vaughn family has any control in the management or conduct of the business of said company.
“The financial condition of said plaintiff company is exceedingly strong and its net earnings and policy holders’ surplus have, and are, increasing substantially, and the defendants do not and cannot make any claim that the company is not now in a sound financial condition and solvent within the meaning of the Insurance Code. There is no claim that the public, policyholders, or creditors are or will be exposed to any detriment. . . .
“Defendants herein have never afforded to plaintiffs an opportunity to present their case before an impartial tribunal, either administrative or judicial, and have never issued any ruling or order directing plaintiffs to comply with or correct any alleged noncompliance with any provision of the Insurance Code.”
The authorities are clear that a person may have declaratory relief and injunctive relief against a public officer when such officer’s acts will cause him to be deprived of constitutional rights, or when the officer is acting arbitrarily and outside the scope of the powers given to him by statute when such action will cause irreparable harm to the person. In Brock v. Superior Court, 11 Cal.2d 682 [81 P.2d 931], petitioner, the State Director of Agriculture, sought prohibition to restrain the trial in an action by plaintiffs against defendant director to have him restrained from enforcing the milk control act because he had failed to follow the law establishing the milk control area. This court denied prohibition and found that the trial court had jurisdiction of the action. We stated (page 684) : “In support of their demand for an injunction against the director of agriculture, the plaintiffs allege that the director of agriculture failed to comply with the provisions of the Milk Control Act in the formation of said area and in the establishment of the amended Stabilization and Marketing Plan for the sale of milk and cream within said area.
“. . . The defendant in said action, the director of agri*406culture, was present both upon the application for a restraining order, and at the hearing of the order to show cause why a temporary injunction should not issue. His contention on these occasions, and his contention now, is that the Milk Control Act is presumed to be valid, and that the defendant as a public officer is presumed to have regularly performed his official duty in the organization of said area and in the establishing of said stabilization and marketing plan, and, therefore, no injunction may be issued to prevent the execution of said statute by him as such public officer without the establishment, after due hearing, of the invalidity of his acts, and that until such hearing and the final determination that his acts are illegal, the courts are without jurisdiction to issue an injunction restraining him from attempting to enforce the statute. . . .
“Petitioner relies upon section 526 of the Code of Civil Procedure and section 3423 of the Civil Code. The fourth subdivision of each of these sections provides that an injunction will not lie to prevent the execution of a public statute by an officer of the law for the public benefit. But petitioner concedes, as we understand his position, that if it be determined after a trial that the officer is acting illegally, then it is within the power of the court to restrain his acts. These code sections therefore do not answer our present inquiry.
“. . . The case before the trial court in that instance was precisely like that involved in a recent case decided by this court where we held that as there were issues of fact tendered by the complaint in an injunctive proceeding, the trial court had jurisdiction to try these issues of fact, and that prohibition would not lie to restrain the trial court from issuing an injunction against an officer in an attempt to enforce a public statute, until these issues of fact were determined. (Agricultural Prorate Com. v. Superior Court, 5 Cal.2d 550 [55 P.2d 495].) In that case our decision upon this point is as follows: ‘ In the injunction suit before the respondent court the plaintiffs therein made the claim that the prorate district in which the applicants were purporting to act as officers was never legally formed or organized in that the petition for the formation of said district was never signed by the necessary two-thirds of the lemon producers residing in said proposed district or zone, and therefore the commission had no authority to make its order organizing said district without an election being held therein to pass upon the question of *407the formation of said district. This claim on the part of said plaintiffs was set forth in paragraph XX of their complaint in which it is alleged among other things that “said petition was not signed by two-thirds or more in number of the producers of lemons in California, nor by the owners of two-thirds or more of the producing factors of lemons in California.” If that allegation is true, then the district was not legally formed or organized, and if it was not so organized, an injunction against the applicants restraining them from executing the terms of said act would lie. On the hearing of the application for a temporary injunction, an affidavit was filed which purported to deny the allegations of paragraph XX of the said complaint. There is nothing, however, in the record before us to indicate that the respondent court has ever passed upon the issue tendered by the allegations of said paragraph XX. In fact, it would be rather unusual for the court to finally pass upon an issue of fact on an application for a temporary injunction This issue of fact, however, was presented by the plaintiffs in the injunction suit and the court had jurisdiction to decide it. So far it has never done so. The injunction suit is still in the respondent court, and the court has exclusive jurisdiction to hear and determine all undecided issues of facts presented by the pleadings in such suit. Should it determine that said district was legally organized and that the orders which the plaintiffs in said action seek to restrain are valid and binding upon those to whom they are directed, then it would be the duty of said court to deny the injunction and dismiss the suit. On the other hand, should the trial court find in favor of the plaintiffs in said suit upon the allegations of said paragraph XX, then it would necessarily follow that said orders would have no legal support and the defendants in said suit should be enjoined from enforcing them. For this reason the application for a writ of prohibition directed to respondents restraining them from proceeding in said action should be denied.’
“We see no reason to recede from the position taken in the decision of that case. It appears to us to be the only reasonable conclusion that can be reached in proceedings of that nature. To hold otherwise would be to tie the hands of the court in cases in which great and irreparable injury might be done private citizens by officers acting under a mistaken belief of their authority.”
The same holding prevailed in Brock v. Superior Court, *40812 Cal.2d 605 [86 P.2d 805] ; Agricultural Prorate Com. v. Superior Court, 5 Cal.2d 550 [55 P.2d 495] ; and Agricultural Prorate Com. v. Superior Court, 31 Cal.App.2d 518 [88 P.2d 253], In the latter ease (at p. 523), the court said: “The second point, that the order of the respondent court violated certain code provisions, is not well taken, for if the officers were in fact acting illegally, it is, as held in the foregoing ease, within the power of the court to restrain their acts. . . .
“ ‘To hold otherwise would be to tie the hands of the court in cases in which great and irreparable injury might be done private citizens by officers acting under a mistaken belief of their authority. ’ ” (Brock v. Superior Court, supra, 11 Cal.2d 682.)
Similarly, in the instant ease the superior court had jurisdiction to determine whether the commissioner’s threatened action was illegal. There can be no doubt that the injury to plaintiff insurance company will be irreparable if it is taken over by the commissioner. Its credit and standing will be seriously impaired.
The majority opinion states that plaintiff has its relief by an attack on the seizure after it has been accomplished (Ins. Code, § 1012) and that that remedy is exclusive. There is nothing in the Insurance Code which makes it the exclusive remedy as there was in the case of Modern Barber Colleges, Inc. v. California Emp. Stab. Com., 31 Cal.2d 720 [192 P.2d 916], relied upon by the majority. It must be remembered that plaintiff’s action was for declaratory, as well as injunctive, relief and, furthermore, we held in California Physicians’ Service v. Garrison, 28 Cal.2d 790, 801 [172 P.2d 4, 167 A.L.R 306], that “section 1062 of the Code of Civil Procedure expressly provides that the remedy through declaratory relief is cumulative and not restrictive of any other remedy provided by law.” The court was there speaking of an action wherein plaintiff sought to have the court declare that the Insurance Code did not apply to its members’ business.
I would, therefore, grant the writ of mandate prayed for herein.
Schauer, J., concurred.
Petitioners’ application for a rehearing was denied November 23,1955. Carter, J., and. Schauer, J., were of the opinion that the application should be granted.

It offers evidence here to show beyond doubt that it was and is solvent.