13 Cal. 2d 306 | Cal. | 1939
The above numbered appeals have been taken by the named appellants, policyholders of The Pacific Mutual Life Insurance Company of Californa, from an order of the superior court made under section 1016 of the Insurance Code (Stats. 1935, chap. 145, p. 496), directing the insurance commissioner to wind up and liquidate the business of the insurance company. The appeals, by stipulation, have been consolidated.
The plan of rehabilitation thus upheld approved the organization by the commissioner as conservator of a new insurance company, the assumption by it of all the policies of consenting policyholders of the old company, and the paying
The commissioner, as conservator, put the plan of rehabilitation into operation, and then, as contemplated by that plan, in January of 1937, applied to the court below for an order of appointment as liquidator of the old company, and requested authority to liquidate that company. This procedure is recognized by .section 1016 of the Insurance Code, which provides in part: “If at any time after the issuance of an order under section 1011 (the section authorizing the commissioner’s appointment as conservator) it shall appear to the commissioner that further efforts to proceed under said section would be futile, he may apply to the court for an order to liquidate and wind up the business of said” insurance company. The petition recited the factual background of the transaction, and contained the requisite legal allegations required by section 1016. The petition prayed for an order directing the liquidation of the company and requested that the court fix July 22, 1936, the date of the seizure of the old company, “as the date and time as of which the rights and liabilities of respondent corporation and of creditors, policyholders, shareholders, and members, and all other persons interested in the assets of said respondent corporation shall be fixed”. The petition alleged that this last-mentioned relief was necessary to prevent confusion and conflict, and to protect the rights of all concerned. After the issuance of an order to show cause the appellants filed their return. They did not challenge any of the allegations of the petition, and particularly did not challenge the allegations that further efforts to proceed as conservator would be futile or that liquidation was necessary. The main contention made by appellants in their return was that they had appealed from the rehabilitation order; that the appeal stayed all proceedings on that order; that the liquidation proceedings ‘ are further proceedings upon the judgment of December 4, 1936, and further proceedings upon the matters embraced in that judgment”; that pending the appeal from the rehabilitation order the superior court was without jurisdiction'to entertain the
On February 3, 1937, the court entered its order entitled “Order for Liquidation”. It is from this order that the present appeals have been taken. So far as pertinent here, the order recites the facts in reference to the rehabilitation order of December 4, 1936, and what was done thereunder. It is stated that “it is the fact that further efforts on his (the commissioner’s) part, to conduct, as conservator, the business or any part of the business of respondent corporation, would be futile”. The order also recites the necessity of giving policyholders and creditors an opportunity to file their claims and that it is fair and proper to fix the rights of such persons as of July 22, 1936, and they are so fixed. The commissioner was appointed liquidator of the business of the old company, and as liquidator he was directed to wind up and liquidate the business of that company. Title to the assets of the old companj was vested in the commissioner as liquidator.
In their original briefs appellants rely on three main points for a reversal. It is first urged that under section 946 of the Code of Civil Procedure the appeals from the rehabilitation order acted as an automatic stay of proceedings so as to deprive the trial court of power to entertain the order here appealed from while such appeals were pending. The answer to this contention is that the provisions of section 946 of the Code of Civil Procedure, and of the related section 949 of the same code, have no application to a special proceeding such as is here involved. The sections are found in part II of the code which deals only with civil actions. This part of the code has no application to special proceedings of this nature unless specifically made applicable thereto by statute. On the appeal from the rehabilitation order it was expressly held that the proceedings under the Insurance Code are special proceedings and that the procedural sections of part II of the Code of Civil Procedure have no application thereto. The legislature has seen fit to make the provisions of part II of the code expressly applicable to many special proceedings. Its failure to do so in reference to proceedings under the Insurance Code must be held to have
It is next urged that it was reversible error for the trial court to fail to make formal findings of fact and conclusions of law. On the prior appeals this identical contention was considered and found to be without merit. It was there held that in making orders under the Insurance Code the trial court is under no duty to make findings of fact and conclusions of law. (Carpenter v. Pacific Mut. Life Ins. Co., supra, p. 327.)
The third contention of appellants is that the order here appealed from is void, because, it is urged, it attempts to modify the rehabilitation order then pending on appeal, in that, under the rehabilitation order, title to the stock of the new company was vested in the commissioner as conservator, while the order now under appeal purports to vest title to such stock in the commissioner as liquidator as of July 22, 1936. This contention is unsound. The fact that the order to liquidate provides, in the language of section 1016 of the Insurance Code, that assets theretofore held by the commissioner as conservator shall remain vested in him as liquidator, and that the order fixes July 22, 1936, as the date upon which creditors’ and policyholders’ rights shall be fixed, does not make the order to liquidate in these respects an amendatory order of the rehabilitation order. These provisions obviously were inserted in the liquidation order (as the statute provides) in order to provide that the alteration in the commissioner’s duties in carrying on the business of the old company as conservator, to winding it up as liquidator, should not divest nor disturb his titles. The construction of the order contended for by appellants is unwarranted. The order does not provide that the commissioner’s rights in the stock of the new company as liquidator date back to July 22, 1936. His rights as liquidator arose only upon the making of the liquidation order and the trial court did not attempt to provide otherwise. The court did not attempt to date back the change of the commissioner’s function and title—all that it
After the United States Supreme Court had affirmed the decision of this court upholding the validity of the rehabilitation order, appellants secured leave to file a supplemental brief, admittedly raising new questions described by them as being “wholly jurisdictional and constitutional’’. Several of the new arguments are based on the contention that both the rehabilitation and liquidation orders, for various reasons, deprive appellants of their constitutional rights. Many of these contentions were considered by the United States Supreme Court on the prior appeal and found to be unsound. These points need not be considered again.
Most of the new contentions, other than those already mentioned, are partially predicated upon the record of the prior appeal, of which appellants contend that we can and should take judicial notice. It is urged that the entire proceedings leading up to and terminating in the appointment of the liquidator, including all proceedings involved on the prior appeal, were and are void. It is urged first that as the law read at the time of the entry of the order here appealed from (the law in this respect has since been changed—Stats. 1937, chap. 932), the Insurance Code required that an order appointing a liquidator had to be preceded by a valid order first appointing the commissioner conservator; that in determining whether such prior order was made we are limited to the recitals found in the liquidation order; that that order recites that the commissioner was appointed conservator on July 22, 1936; that on the prior appeal it was determined that this July order was void; that, therefore, the liquidation order, so far as the record before ns shows, was not supported by a valid prior order appointing the commissioner conservator. The basic premise upon which this contention is based—that the liquidation order was based solely on the order of July 22, 1936—is unsound. When the trial court entered its order appointing the commissioner liquidator on February 3, 1937, the rehabilitation order was then pending on appeal. On that appeal one of the main questions involved was whether the commissioner had been validly appointed conservator on July 22 or August 11, 1936. It was ultimately held on that appeal that the July 22d order was void and that the commissioner was not validly appointed
It is next urged, on several grounds, that the trial court never acquired jurisdiction of the rehabilitation proceedings, and therefore, all subsequent proceedings, including the instant proceeding, are invalid. It is contended that the legal effect of this court’s opinion on the prior appeal was to ratify the void order of July 22, 1936, and that this deprives the policyholders of due process. It is also urged that the order of August 11, 1936, appointing the commissioner conservator was void because made without notice to the old company, and without service upon it of the application as required by section 1038 of the Insurance Code; that the jurisdictional requirement of service was not met by the unauthorized appearance of some officers and attorneys of the old company; that such appearance was collusive; that even if such appearances were authorized by resolution of the board of directors of the old company, such resolution was ineffectual to confer jurisdiction on the superior court; that mere seizure by the commissioner without a prior order based on notice and a hearing gave the commissioner no authority to proceed. It will be noted that all of these attacks are not directed against the order from which the present appeals have been taken but at either the rehabilitation order or the order of August 11, 1936. These orders have been affirmed by this court and by the United States Supreme Court. To escape the legal effect of these affirmances appellants in their attempt to relitigate the question of the validity of the rehabilitation order and the order of August 11th, rely on the rule that the affirmance of a void order imports no force or validity thereto. (Pioneer Land Co. v. Maddux, 109 Cal. 633 [42 Pac. 295, 50 Am. St. Rep. 67].) The rule of the Maddux case only applies to questions which
In view of this conclusion we do not intend to consider each of appellants’ contentions at length. We think it proper to state, however, that on the merits, each of the contentions is unsound. The contention that the legal effect of this court’s opinion on the prior appeal was to ratify the
Appellants make other contentions concerning the validity of the rehabilitation order, some based on alleged constitutional and others on alleged jurisdictional grounds. As already stated, the constitutional grounds were answered by the Supreme Court of the United States adverse to appellants’ contentions. The alleged jurisdictional grounds have either been already answered in this opinion or are so clearly unsound as not to merit further discussion.
From what has been said it follows that the order appealed from should be and hereby is affirmed.
Chief Justice Waste and Justice Edmonds, being disqualified, did not participate in the decision.