*1 Bank. 1943.] 18666. In A. No. Sept. [L. Commissioner, etc., Peti- JR., CAMINETTI, as Insurance A. LIFE UNION v. GUARANTY Respondent, tioner and Respondent; Corporation), (a INSURANCE COMPANY Appellant. SHERMAN, Intervener and AUSTIN Sept. 20, Bank. No. 18667. In 1943.] A. [L. Commissioner, etc., Peti- CAMINETTI, JR., as Insurance A. NATIONAL Respondent, tioner v. GUARANTY AU- Respondent; (a Corporation), LIFE COMPANY SHERMAN, Appellant. Intervener and STIN Sept. 20, Bank. A. No. 18668. In 1943.] [L. Commissioner, etc., Peti- CAMINETTI, JR., A. as Insurance FRANKLIN BENJAMIN Respondent, tioner Re- Corporation), (a LIFE ASSURANCE COMPANY Ap- THOMPSON, spondent ; R. Intervener CHAS. pellant. Sept. 20, In Bank. A. No. 18669. 1943.]
[L. Commissioner, etc., Peti- JR., CAMINETTI, A. as Insurance LIFE INSUR- Respondent, PHYSICIANS tioner and Respondent; (a Corporation), COMPANY ANCE Appellant. THOMPSON, Intervener CHAS. R. *2 & pro. per., and Sherman Sherman Thompson R Chas. Appellants. Interveners Respondent. Peery Price for Petitioner and of supersedeas a writ SHENK, J. seek Interveners an approv- the force and effect appeal, stay, pending
761 affecting the ing a rehabilitation and reinsurance in these involved twelve mutual life insurance Insur- petition on the cases. The matter submitted demurrer ance and answer. Commissioner’s Insurance Commis- 1940, commencing August, His corporations. sioner took assets of the possession of the Insurance Code action 1011 of the pursuant was section companies were ground was on the taken would condition that of business transaction public. creditors, hazardous to policyholders, challenged by appropriate seizures the commissioner were Appeals superior proceedings upheld by were court. approved were taken from court which orders com- applications and which denied the panies property to resume title and possession Code). orders were (sec. 1012, conduct of business Ins. affirmed in the Mutual following cases: Caminetti v. State Co., 165]; 52 Cal.App.2d Ins. P.2d Caminetti Guaranty Co., Cal.App.2d Union Ins. Life 159]; Cal.App. Guaranty Caminetti National *3 170], appeals 2d the were other eases 1942, abandoned. Insurance Subsequently, December, the presented Commissioner superior approval court for By a proposed agreement. rehabilitation and reinsurance Company that instrument Guaranty Union Life Insurance required liability to reinsure and assume all other outstanding eleven under policies on the effective date of the agreement, which be “at six P. M. is to o’clock War day upon Time of the which a formal order of approving agreement the Court this shall be filed with 15, Clerk of the February Court.” On made the court approving agreement duly an order and it to caused be filed. Sherman, policyholder
Austin a in Guaranty Union Life Company Guaranty Insurance Company, and National Life and Thompson, Chas. R. policyholder Benjamin a Frank- Physician’s lin and Life Insurance Company, on interveners behalf of policyholders themselves all respective and of companies, appealed from They the order. applied superior for, court denied, stay but were a pending appeal. granted The trial stay court a day ten to enable them to make application to this An court. order to show cause was issued stay temporary hearing a pending and determination application.
By its trial order that adequate provi- decreed sion for agreement had been made all policy- classes of and holders, creditors, fairly other persons; plan and equitably protected adjusted and the rights, obligations and concerned; of all liabilities that a fair and reasonable method provided had been for the removal of causes made necessary it to take over the and' property; business plan just was feasible, equitable, and and that it was to the best policyholders interests of the of all persons and other plan concerned that approved. and Insurance authorized, was Commissioner without fully order of court, agreement, terms and to anything do deemed or desirable to effectu- ate the purposes thereof. petitioners indulged in some discussion of the going
facts to the merits in to show that substantial questions It is appeals. pointed are involved out that parties companies, twelve rehabilitation rein- and agreement, general surance are groups divided into three four Equitable Company California, each. Mas- Insurance Company, ter Life Insurance Southwestern Life Insurance Company and Sunset Mutual Company, Life Insurance are not properly Alli- insolvent and continue could business. ance Mutual Insurance In- Company, Life Great States Life Company, surance Mount Life Company, Moriah Insurance Company solvent, State Mutual but size, inadequate insurance, due their small rates of factors, operation. other have but little of successful chance directly in- group The third consists four appeals proceedings. volved com- these These panies, appears, would have fair chance successful separate if operation inadequacies, hazardous, certain extravagant amounting other practices to proprietary management Guaranty control National were obviated. *4 largest, slightly is the with a million over dollars assets $106,000 surplus. Guaranty and Life Com- Union Insurance largest pany, second asserted to be the best financial $573,000 condition, assets, $350,000 over surplus. and petitioners presented The questions appeal state on first impression have never been decided and are of in this contention that where, they assert, state. It as here
763 removed, a been for the reasons remedy necessity for the condition, the company is sound of the Insurance 1043 pursuant section of rehabilitation must, pur- obviated, commissioner that the has been Code business code, return the 1012 of that to section suant here whether important question The to the company. assets stay grant supersedeas reviewing court a writ will approving the rehabilitation of the the force and effect agreement, performance thus reinsurance agreement, pending appeal. re- self-executing in that it appealed from is
The order
carry
appeal
The
it into effect.
quires
process
no
court to
stay
judgment.
not
effectiveness of such
does
only upon
to enforce
supersedeas
proceedings
acts
writ
judgment
itself.
judgment
in the court below—not
(Sec. 949,
Proc.; Dulin
W. &
98
Co.,
Code Civ.
C.
123];
Imperial
3,
In
No.
Cal.
P.
Water Co.
re
394].)
pointed
In
Dulin
out
Cal.
P.
ease was
supersedeas
that the writ of
“cannot be used to
action,
injunction against
parties
functions of an
restraining
rights,
assertion of their
them from
in the
act
using
process
other than to
them from
prevent
judgment.
court below to enforce the
...”
Imperial
In
Company
Water
ease
said:
has
it was
“It
by
supersedeas
repeatedly
been
held
this court that a
will
only pro-
issue
restrain the
below or
officers from
court
its
ceeding
judgment pending
to enforce a
and that
appeal
such
authority
restraining any
writ is
action
limited to
under the
judgment appealed
of the court
from.
other
words,
a writ of
or pre-
will not
to restrain
issue
acting
a party
proceeding
judgment
vent
from
under a
duly
no
appeal
process
from which an
has
taken where
been
by
of or action
the court
is involved.”
below
petitioners
the Insurance Commis-
contend
by
receivership
sioner is an officer of the
of his
court
virtue
perform-
of the assets of the
and that
insurance
agreement approved by
ance of the
constitutes
court
stayed by
an
proceedings
appropriate
writ.
appointed
But the Insurance Commissioner is
an officer
judgment.
enforce its
does not
his
He
derive
power
court,
from
but from the statute. He
has been
(Anderson
corporation
called
receiver of
assets of
Republic
Cal.App.2d
v. Great
*5
by
75]),
appointment
P.2d
is
of
188-189
but he
such not
[106
court,
legislative
but
virtue of
His
office
enactment.
jurisdiction
not
in
of
is
to
functions
aid
the court’s
controversy
litigants,
to
as a
decide a
between
but he acts
statutory
subject
judicial
to
to
officer,
supervision
however
arbitrary
power
neglect
duty.
prevent an
exercise of
of
A
respect
somewhat
contention was
to di-
similar
made
acting
pending
corporate
rectors
trustees
distribution of
Imperial
in
Water Company case,
assets
where
supra,
sought
appellant
stay
pending
the distribution of assets
authorizing
appeal from the order
distribution. This court
rejected the contention
such
that
trustees were amenable
supersedeas, saying:
they
the writ of
officers
“But
not
are
They
merely statutory liquidators,” citing
of the court.
Rundle,
337],
103 U.S.
The
L.Ed.
Relfe
analogy
apparent.
petitioners
urge
nevertheless
that the court
exercise its
in
power
constitutional
cases to
these
issue
of supersedeas
writ
appears
stay
when it
that
appellate jurisdiction,
in aid of its
and that
restraint
some
required
the commissioner is
in
to preserve
appellants the
appeal
fruits of the
in the event of a reversal.
power
It
assumed that the court has
to issue the writ in
proper
However,
Carpenter
in
ease.
Mutual
637],
As stay en- they suspend order. But forcement do the force of the rights order as a conclusive determination of par- (Dulin ties. W. & at supra, p. 308.) C. This so, finality is not judgment since accorded a until affirmance appeal. the event of an conservatorship fact that the has for continued period a years of more than two and one-half justify would not the conclusion can indefinitely continue injury without hazard. It intervening well be that the period necessary plan was development of re- organization, and at this time the usefulness con- except servatorship, put plan operation, into is ex- hausted. In showing contrary the absence be assumed that commissioner will official his rights duties accordance with the of all concerned, that, with due consideration for suspended force of the order go determination, conclusive he will not forward with performance except to the preserve extent equities which have been formalized order.
It is presented therefore concluded that a case is not re- quiring. the issuance of the writ of to maintain *7 quo to protect appellate jurisdiction. the status or The application denied, is to and the order show is cause discharged.
Gibson, J., Curtis, J., C. J., Carter, Traynor, con- J., curred.
Schauer, J., not participate did herein. J., Dissenting.
EDMONDS, join in opinion I donot the my of for associates two reasons. ground
If the is upon decision based the that the order appealed from self-executing subject supersedeas, is and not to contrary, is I directly believe, that determination to the hold- Carpenter ing of Co., Mut. 13 v. L. Ins. Cal.2d 306 Pacific If, contrary, P.2d on the that, conclusion is [89 637]. upon shown, policyholders the facts the petitioning are quo entitled to the the to writ to maintain status or protect appellate jurisdiction, disagree point I. then to evidence which, me, compels to the exercise the of court’s discretion in their behalf.
Ordinarily, supersedeas granted only writ of be will where
767 appeal the pending may be enforced judgment or order the con- litigation in the recent But purpose. for that process Co., was ex- Insurance it Mutual Life cerning Pacific the Mut. Carpenter authority of upon held, the pressly Pacific the 761], procedural that P.2d Co., L. Ins. Cal.2d no of Civil Procedure II the Code part of of provisions For the Insurance Code. proceeding under to a application that the presume “We declared, the must reason, court that judg- upon appeal from orders Legislature intended supersedeas should Insurance Code the ments under the made granted should automatic, one should be but whether not be of its in the exercise discretion of sound rest státutory stay no exists.” grant supersedeas to where power (Carpenter Mut. L. Ins. Cal.2d 637].) proceeding upon present Considering application sought merits, the order for which is now made rehabili- substantially the same form as one Company except Life Insurance tating Pacific Mutual merge assets authorizes the Insurance Commissioner companies Four of with those of solvent ones. of insolvent insolvent, companies four them are insurance the twelve business, properly solvent cannot continue but separate with a fair chance for successful others are solvent largest operation. By agreement, rehabilitation second group, finan- of the latter asserted to be best condition, required cial reinsure and all of the assume liability companies. of the other eleven show, beyond possibility
Do not these facts of success- contradiction, merge proceeds ful that if the commissioner corporations them as the assets of twelve and administer Guaranty Company, property Union subject them, libilities of one each interests of policyholders seriously in the solvent jeopardized in the event of a reversal determination of appeal poli- Í “liens And if the commissioner fixes compensate for insolvencies cies certain to equalize *8 the financial under the reinsurance burden liability requires or assumption policy- features” “that inadequate holders have held insurance with rates must who make in- certain elections between reduced insurance and now, creased rates” he asserts must be done and the order practically reversed, impossible will it to return the not position? if I present Moreover, read the correctly, my opinion associates the commissioner intends upon pay death claims and cash values the basis of the agreement readjustment and also reinsurance to make of rates might immediately. steps How effective be retraced in the event of reversal. facts, in my judgment, present
These compelling reasons why the discretion the court should be exercised in favor of granting quo. writ of to maintain status certainly And writ not assump- should be denied go “will tion commissioner forward per- except equi- formance to the extent to preserve the been formalized agreement ties qualification decision, order.” Under that of the how will the commissioner, companies, insurance know may go in carrying what extent he out the pending a determination appeal? Sept. A. No. 18561. Bank.
[L. 1943.] McDonald, ROBERT J. Petitioner, v. THE STATE BAR CALIFORNIA,
OF Respondent.