Court Opinion

ID: 6548048
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:21:18.701101+00
Date Added: 2024-06-11T15:56:01.569231
License: Public Domain

ON REHEARING, Hart, J. Appellees (claimants for fire lpsses) have filed a motion for rehearing on the ground that the court erred in not allowing each of them an attorney’s fee. The claim is based upon the statute of Arkansas enacted at its 1905 session, which is as follows: “In all cases where loss occurs, and the fire, life, health or accident insurance company liable therefor shall fail to pay the same within the time specified in the policy, after demand made therefor, such company shall be liable to the holder of such policy, in addition to- the amount of loss, twelve per cent, damages upon the amount of such loss, together with all reasonable attorney’s fees for -the prosecution and collection of said loss; said attorney’s fees to be taxed by the court where the same is heard on original action, by appeal or otherwise, and to be taxed as part of the costs therein and collected as costs and as may be by law collected.” Acts 1905, p. 308. Statutes allowing attorneys’ fees to be taxed against railroad and insurance companies have been sustained as a proper exercise of the police power of the State. Kansas City Southern Railway Company v. Marx, 72 Ark. 357; Arkansas Insurance Company v. McManus, 86 Ark. 115. Upon examination of the record in the present case, we find that claimants for fire losses did ask for the twelve per cent, penalty and attorney’s fees under the statute above quoted. The chancery court failed to allow an attorney’s fee in each intervention; but allowed the receiver an attorney’s fee, which we held.in our original opinion must be paid out of the fund administered by him. None .of the claimants for fire losses in this case instituted suits in the law courts against the insurance company before the appointment of the receiver to recover the amount alleged to be due them; but, on the contrary, the record affirmatively shows that all such claimants voluntarily came into the chancery court after the receiver was appointed and filed an intervention in the insolvency proceedings, for the purpose of recovering the amount alleged to ;be due for fire losses. In these interventions, the penalty and attorney’s fees provided by the Acts of 1905 were asked for as part of the relief to which they were entitled. We held in the original opinion that, having voluntarily submitted themselves to the jurisdiction of the chancery court, they, by so doing, treated the liability of the surety as an asset of its principal, to be collected and distributed according to the principles governing courts .of equity. The act of 1905 in question can not affect the jurisdiction of chancery courts or enlarge their powers. Gladish v. Lovewell, post p. 618; Hester v. Bourland, 80 Ark., p. 145; Mississippi Railroad Commission v. Gulf & S. I. Rd. Co., 78 Miss. 750; Broadnax v. Baker, 94 N. C. 675. “It is a universal rule in equity never to enforce either a penalty or a forfeiture.” 2 Story on Equity Jurisprudence, § 1319- No suits having been instituted against the insurance company to recover for fire losses until the receiver was appointed, and the claimants then having voluntarily submitted themselves to the chancery court to try their claims, we think it is in accordance with the established principles of equity not to allow either the twelve per cent, penalty or the attorney’s fees. Counsel for the Federal Union Surety Company contend that the policies of insurance are cancelled by act of the insured, and that the basis of settlement should be the rate paid for a short term policy. In short, that the insurance company is entitled to charge the customary short rates, and the policy holder is only entitled to the difference between the amount paid by him and the short rate. In support of his contention, he cites the following cases: Insurance Commissioner v. People’s Fire Ins. Co., 68 N. H. 63; McKenna v. Firemen’s Insurance Co., 63 N. Y. Supp. 164; Ex parte Independence Ins. Co., 13 Fed. Cas. 12; State Ins. Co. v. Homer, 23 Pac. 788; Van Valkenburgh v. Lenox Fire Ins. Co., 51 N. Y. 468; Burlington Ins. Co. v. McLeod, 34 Kan. 192. As an abstract proposition of law, we think the views of counsel are correct, but we also are of the opinion that the state of the record in the case precludes him from availing his client of- that principle of law. The record shows that the case was tried upon an agreed statement .of facts. Appeals have been taken only in the cases of certain named claimants; and the amount due them are specifically agreed upon in the record. It is agreed that the other cases shall abide the result of these appealed from. The chancery court directed the receiver as master to prepare and file a statement of the names of the persons and the amounts due them on unearned premiums. Exceptions were filed to the report of the master on the specific ground that the surety company was not liable, but no exceptions were made on the ground that the -amounts found dúe were erroneous, or that they were ascertained on an improper basis. Then, as above stated, an agreement .was made that all such claims should abide the result of those appealed to this, court, and the amounts due on those appeals were agreed upon. Hence we conclude. that, under the state of facts as disclosed by the record, the motion for a rehearing on this ground should be denied. On the conclusiveness of agreed statements upon this court, see Evins v. Batchelor, 61 Ark. 521. Rehearing denied.