62 Cal. App. 2d 945 | Cal. Ct. App. | 1944
Appellant, as Insurance Commissioner of the State of California, obtained from the Superior Court of Sacramento County an order under section 1011 of the Insurance Code appointing him as conservator of the business of the respondent, Prudence Mutual Life Insurance Association, and pursuant to this order took over its property and business. The respondent is a corporation organized to do life insurance business on the mutual benefit assessment plan. As soon as this order was made, the proceeding was transferred to Los Angeles County. Later, on application of respondent, a hearing was had under section 1012 of the Insurance Code, at the conclusion of which the Superior Court of Los Angeles County entered a judgment cancelling and terminating the former order, dissolving the conservatorship and directing the restoration to respondent of its property and business. From this judgment the Insurance Commissioner appeals.
At the outset of the hearing the trial court was asked to rule upon the question where lay the burden of proof, and after extended argument it announced its opinion that the burden rested on the Insurance Commissioner. Appellant now complains of this as reversible error. The court’s declaration of law was erroneous, for it is now settled that on
Section 1011 of the Insurance Code enumerates among the conditions, the existence of which affords ground for an order appointing the Insurance Commissioner as conservator of an insurance company, the following: “(d) That such person is found, after an examination, to be in such condition that its further transaction of business will be hazardous to its policy holders, or creditors, or to the public. ... (h) That
The original salary fixing resolutions under which Mr. Fielder made his claim did not fix a salary for him personally, but merely fixed the salary of “the secretary and general manager.” (Emphasis ours.) He held these two positions when the resolutions were adopted, but he ceased to be secretary and became president on November 3, 1937, and so remained until August 3, 1939. This interregnum extended over nearly the whole period of time for which he claimed back salary, and during it the salary' fixing resolutions did not apply to him. No resolution fixing a salary for the president alone or for the general manager alone, or for both officers together, or otherwise fixing a salary for Mr. Fielder, during this interval, appears to have been passed. Hence the $2,550 payment made to him cannot be upheld as merely a payment of amounts due him under the original salary fixing resolutions. Such a justification of the payment also appears doubtful by reason of the resolution limiting all salaries to $200 “during the existing emergency.” This resolution did not specify the nature of the emergency, and the board never passed a resolution declaring it ended, except as the compromise resolution may have had that effect. The rightfulness of the payment to Mr. Fielder depends entirely on the validity of the compromise. The payment to Mrs. Fielder, however, was within the terms of the original salary fixing resolutions and needs no compromise to uphold it.
The law in California formerly was that a director was disqualified from voting on any matter in which he was directly and personally interested and could not be one of a majority essential to the adoption of such a resolution. (6A Cal.Jur. 1107; Angelus Securities Corp. v. Ball (1937), 20 Cal.App.2d 423, 432 [67 P.2d 152].) That rule was somewhat modified by the adoption of section 311 of the Civil Code, which as it now stands declares that no contract or other transaction between a corporation and one of its directors, or between a corporation and any corporation, firm or association in which one of its directors is financially inter
We pass without discussion the possible application of subdivision (a) and subdivision (b) of section 311 to the compromise here, because we conclude that the trial court’s approval of it must be upheld under subdivision (e) on the ground that it was just and reasonable as to the corporation. An officer who renders beneficial service to a corporation, without any lawful action of the board of directors fixing his compensation, but under circumstances negativing an intent that they were to be gratuitous, may recover the reasonable value of those services. (Bassett v. Fairchild (1901), 132 Cal. 637 [64 P. 1082, 52 L.R.A. 611]; King v. Grass Valley Gold Mines Co. (1928), 205 Cal. 698, 699 [272 P. 290].) Here it is clear that the services were not intended to be gratuitous. The appellant contends that the Fielders both waived any compensation in excess of what they had already received, but we find nothing requiring such a conclusion. It is true the books of the association showed no claim for further compensation and it does not appear that they made any express protest against the amount received, but neither of these would necessarily effect a waiver. It does not appear that any of the payments were tendered or received as full payment.
If the payment to Mr. Fielder on the compromise, when added to what he had already received for the services covered by the compromise, resulted in his receiving no more than the reasonable value of those services, the compromise must be regarded as just and reasonable. The question what is the reasonable value of services is one of fact, and the decision of the trial court upon it is binding here, even though we might be disposed to exercise a different judgment upon
Finally, section 1012 of the Insurance Code, requires that before an order such as that here appealed from can be made it shall appear that the insurer “can properly resume title and possession of its property and the conduct of its business. ’ ’ On this issue, also, the respondent had the burden of proof, and appellant insists that there is no evidence justifying a finding in respondent’s favor thereon. This is a matter primarily for the consideration and discretion of the trial court, whose decision is binding on appeal unless without any support in the evidence. (Caminetti v. Guaranty Union L. Ins. Co., supra (1942), 52 Cal.App.2d 330, 336 [126 P.2d 159]; Caminetti v. Imperial Mut. L. Ins. Co., supra (1943), 59 Cal.App.2d 476, 486 [139 P.2d 681].) While there is evidence here which would have supported a finding against the respondent on this issue, we cannot say there is no reasonable view of the evidence which would support the trial court’s implied finding in its favor.
The judgment appealed from is affirmed.
Shinn, Acting P. J., and Wood (Parker), J., concurred.
Appellant’s petition for a hearing by the Supreme Court was denied April 13, 1944.