Attorney General ex rel. Commissioner of Insurance v. Lapeer Farmers' Mutual Fire Insurance

327 Mich. 333
CourtMichigan Supreme Court
DecidedApril 3, 1950
DocketDocket No. 38, Calendar No. 44,553
StatusPublished
Cited by6 cases

This text of 327 Mich. 333 (Attorney General ex rel. Commissioner of Insurance v. Lapeer Farmers' Mutual Fire Insurance) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Attorney General ex rel. Commissioner of Insurance v. Lapeer Farmers' Mutual Fire Insurance, 327 Mich. 333 (Mich. 1950).

Opinion

Sharpe, J.

The Lapeer Farmers’ Mutual Fire Insurance Association was incorporated in 1871 for the purpose of conducting a fire insurance business. In September, 1935, the attorney general, on relation of the commissioner of insurance, filed a bill of complaint in Ingham county for the appointment of a receiver; and in September of that year the commissioner of insurance was appointed statutory receiver of the insurance company. On September 30, 1935, William G. Simpson, deputy insurance commissioner, was appointed receiver and ordered to [335]*335make an accounting and report his findings to the court.

Much litigation has arisen out of the appointment of a receiver. See Simpson v. Goodrich, 280 Mich 351; In re Dissolution of Lapeer Farmers Mutual Fire Insurance Association (Claim of Crawford), 280 Mich 363; In re Gilliland, 284 Mich 604; In re Dissolution of Lapeer Farmers’ Mutual Fire Insurance Association (Claim of Rice), 295 Mich 218; Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers Mutual Fire Ins. Association (West’s Appeal re Assessment), 297 Mich 174; Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers Mutual Fire Ins. Ass’n (Claim of Ivory), 297 Mich 188; Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers Mutual Fire Ins. Ass’n (Appeal of Rice), 300 Mich 320; Commissioner of Insurance v. Lapeer Circuit Judge, 302 Mich 614; Emery v. Clark, 303 Mich 461; Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers’ Mutual Fire Insurance Association (Appeal of Warner), 318 Mich 60; Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers’ Mutual Fire Insurance Association (Appeal of Turner), 325 Mich 655.

It appears that Charles It. Bowles was appointed successor deputy receiver and in 1940, after a survey of the situation, filed a petition for instructions as to his legal status and procedure to be followed upon any further assessment which resulted in a circuit court order under date of July 12, 1940, authorizing the levy of a new assessment at designated rates for specific years of membership. Accordingly, the receiver levied an assessment on July 27, 1940, which was reported to the court on July 31, 1940, and an order entered on October 1, 1940, finding that the assessment had been levied in accordance with the statutes, the association’s charter and the court’s [336]*336instructions and was approved and confirmed. An appeal was taken to the Supreme Court and the assessment was sustained. See Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers Mutual Fire Ins. Association (West’s Appeal re Assessment), 297 Mich 174.

In 1945, David A. Forbes, commissioner of insurance, proposed a method of settlement, including voluntary contributions of those who had not paid their assessments, a compromise of creditors as to their claims, transfer of assets by the statutory receiver to certain trustees, and liquidation by trustees. This plan was approved by the trial court and with slight modifications was approved by the Supreme Court. See Attorney General, ex rel. Commissioner of Insurance, v. Lapeer Farmers’ Mutual Fire Insurance Association (Appeal of Warner), 318 Mich 60.

In March, 1948, a small group of former members of the Lapeer Farmers’ Mutual Fire Insurance Association filed a petition in the circuit court of Ingham county to vacate and set aside the assessment orders of July 12, 1940, and October 1, 1940. They allege that they bring this petition as a class action on behalf of themselves and approximately 6,700 other persons constituting the membership of the insurance association. The petition charges that the orders above referred to were obtained by and through fraud, deceit, concealment and misrepresentation of material facts to the court which constitutes a fraud upon the court. They also claim to have discovered new evidence which would have a material bearing upon the decision made in the case.

Upon the filing of the above petition, the trial court issued an order to show cause why an injunction pendente lite should not issue. On April 2, 1948, the commissioner of insurance, by the attorney general, filed a motion to dismiss plaintiffs’ petition [337]*337for the reasons that the matters therein stated have been previously adjudicated or that the time has long expired when they can assert the claim of newly-discovered evidence.

On April 21, 1948, an order was entered granting the motion to dismiss petitioner’s petition. In granting this motion the trial court said:

“You are here this morning, and as stated there was a petition to vacate or set aside the assessment order of July 12, 1940. Then there was a motion filed by the attorney general asking to dismiss this petition, and that was filed some time ago and I spent considerable time going through and comparing the petition to vacate as well as the petition to dismiss the petition. There was an answer filed this morning that I just glanced through. We' heard the arguments here of counsel and then discussed the matter in my office.
“There are 2 propositions, one as to whether there is res judicata, and the other as to whether there is fraud, and whether or not anyone is guilty of laches in not presenting this so-called fraud, or the.alleged fraud, to the attention of this court before this day.
“In regard to the matter of res judicata, I have compared the answers and the pleadings, as well as some of the cases, and a great many matters that are set up in the plaintiffs’ petition to vacate or set aside this assessment order. This court will have to hold the [them?] res judicata. There are quite a few questions there that are raised that have been passed upon by our Supreme Court.
“The order is dated July 12, 1940, and I think November 19, 1942, the Supreme Court passed upon that assessment. As I say, this court does find that many of the-matters are res judicata, as having been passed upon by the Supreme Court.
“The other question of laches, as to whether or not the petitioners have waited too long to bring this action, we have had several cases cited here from the Supreme Court, and other authorities, this morn[338]*338ing, in which the question of laches is raised, and where the Court has held that in many of these cases that they could bring their action even though it is years later, where fraud is discovered. But, I haven’t found any case, nor has any been cited to me, where the question of fraud was discovered and has been known for almost 7 years, or at least 6 years, as in this case, and no action has been taken. I find many cases that have been appealed to the Supreme Court and passed upon by that Court, pertaining to those [this?] whole case, the case of the Lapeer Fire Insurance Company.
“But in some of these cases, one here where the Court held 20 years after a receivership, fraud was discovered and it was allowed to be reopened. That was a case where the fraud was discovered 20 years later.

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Related

People v. Keiswetter
151 N.W.2d 829 (Michigan Court of Appeals, 1967)
Graham v. Inskeep
147 N.W.2d 436 (Michigan Court of Appeals, 1967)
Ackerman v. Ackerman
146 N.W.2d 668 (Michigan Court of Appeals, 1966)
In Re Estes
94 N.W.2d 916 (Michigan Supreme Court, 1959)
Forbes v. Ziegenhardt
43 N.W.2d 322 (Michigan Supreme Court, 1950)

Cite This Page — Counsel Stack

Bluebook (online)
327 Mich. 333, Counsel Stack Legal Research, https://law.counselstack.com/opinion/attorney-general-ex-rel-commissioner-of-insurance-v-lapeer-farmers-mich-1950.