State ex rel. Johnson v. Leggett

359 S.W.2d 790, 1962 Mo. LEXIS 649
CourtSupreme Court of Missouri
DecidedJuly 16, 1962
DocketNos. 48716, 48717
StatusPublished
Cited by5 cases

This text of 359 S.W.2d 790 (State ex rel. Johnson v. Leggett) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Johnson v. Leggett, 359 S.W.2d 790, 1962 Mo. LEXIS 649 (Mo. 1962).

Opinion

HOLLINGSWORTH, Judge.

These are appeals taken by the legal representatives of John T. Barker and Floyd E. Jacobs, both deceased, from judgments of the Circuit Court of Cole County [792]*792dismissing petitions of decedents for review of an order of the Superintendent of Insurance denying claims for attorneys fees allegedly owing Barker and Jacobs by the Division of Insurance since 1936.1 Jurisdiction is in this court for the reasons that (1) more than $15,000 is involved in each case and (2) the Superintendent of the Division of Insurance (of Missouri) is a party defendant in each case. The first case, No. 48,716, in which the superintendent of insurance is the sole defendant, is an action for mandamus and certiorari. The second case, No. 48,717, in which the superintendent of insurance is sued and joined with him are the above named insurance companies, as representatives of certain classes of insurance companies against whom, it is alleged, an assessment of the fees herein sought could be made by the superintendent, is an action seeking a declaratory judgment and an injunction.

The facts are not in dispute. In one form or another, the basic questions here presented have been considered by this court on many occasions. In substance, as gleaned from the early case of Aetna Insurance Company v. O’Malley, 343 Mo. 1232, 124 S.W.2d 1164, the facts may be thus briefly stated: On October 9, 1922, the superintendent of insurance ordered a reduction of ten per cent in rates in this state on all classes of fire, lightning, hail and windstorm insurance effective November 15, 1922. Approximately 155 insurance companies filed a petition for review in the circuit court of Cole County. At the beginning of the review proceedings the trial court made an order, pursuant to a stipulation signed by attorneys for the companies and the insurance superintendent, allowing the companies to collect the old rate, on condition that in event the companies were unsuccessful they were to refund the excess premiums to the policyholders. The trial court found in favor of the companies. That judgment was reversed in this court, Aetna Insurance Company v. Hyde, 315 Mo. 113, 285 S.W. 65, and the mandate directed' that the defendant (the superintendent of insurance) be restored all things he had', lost by reason of the judgment of the trial court. In August, 1929, the companies began refunding the excess premiums collected by them under and by virtue of the stipulation and court order referred to-It, however, became apparent to the superintendent of insurance that only a portion-of the excess collection of premiums was in-, fact refunded. In June, 1930, the superintendent of insurance, with the approval of the governor, acting under what is now § 374.120 RSMo 1959, V.A.M.S.,2 employed John T. Barker and Floyd E. Jacobs to seek recovery of the balance of the excess premiums collected by the companies which, belonged to the policyholders.

The terms of the contract of employment were that if those attorneys were successful in recapturing this residue, they should be paid from these fimds for their services-such an amount as the court deemed adequate, but if they were unsuccessful in their efforts they were to receive no pay.3 (On December 1, 1930, Glenn C. Weather-by, whose name will appear in some of the cases dealing with the facts involved, was also employed by the superintendent, with the approval of the governor, to aid Barker and Jacobs, on the same terms.)

Hearing of motions filed in the circuit court of Cole County in May, 1933, by Barker and Jacobs, resulted in a judgment rendered on December 7, 1935, against the companies requiring them to pay into court the sum of $2,750,000 in excess of the amount theretofore refunded, which was-[793]*793paid over to and héld by the superintendent in accordance with Section 5874, R.S.1929 (§ 379.390 RSMo 1959, V.A.M.S.), providing:

“[U]ntil the final determination of such-action, an amount equal to the difference between the rates fixed by the superintendent in his order and those in effect prior thereto, such funds to be held by the superintendent of insurance to await the result ■of such review, and in the event the orders and directions of the superintendent be set aside, such funds shall be returned to the •companies pro rata, and in the event his orders and directions shall be sustained, then such funds shall be turned over to the policyholders pro rata.”

Barker and Jacobs thereupon filed motions for allowance of fees out of the said fund of $2,750,000. The trial court made an allowance of 15 per cent as attorneys’ fees out of the fund, allowing Weatherby the sum of $137,500, and Barker and Jacobs the sum of $275,000, and declaring a lien upon the fund for these amounts. The ■superintendent of insurance appealed to this ■court. The first question considered by this ■court in deciding the appeal was: Did the superintendent of insurance have the authority to employ the respondents in these restitution proceedings ? In discussing that question, the court (in Aetna Insurance Company v. O’Malley, 343 Mo. 1232, 124 S.W.2d 1164, 1166) stated: “Before a state ■officer can enter into a valid contract he must be given that power either by the Constitution or by the statutes. All persons ■dealing with such officers are charged with knowledge of the extent of their authority and are bound, at their peril, to ascertain whether the contemplated contract is within the power conferred. Such power must be exercised in manner and form as directed by the Legislature. [Cases cited.]” The court in that case also quoted from 59 C.J., § 286, page 172: “Public officers have and can exercise only such powers as are conferred on them by law, and a state is not bound by contracts made in its behalf by its officers or agents without previous authority conferred by statute or the constitution, unless such authorized contracts have been afterward ratified by the legislature. An agreement not legally binding on the state may, however, impose a moral obligation. The doctrine of estoppel, when invoked against the state, has only a limited application, even when an unauthorized contract on its behalf has been performed, and thereby the state has received a benefit, and so it is held that a state cannot by es-toppel become bound by the unauthorized contracts of its officers; nor is a state bound by an implied contract made by a state officer where such officer had no authority to make an express one.”

The court then stated, 124 S.W.2d loc. cit. 1167: “We hold that the superintendent did have a right to employ the respondents in the restitution proceedings. But it does not follow that the superintendent of insurance had a right to make a contract of employment that respondents were to be paid for their services out of the fund restored to him.. It is to be noted that Section 5678 (§ 374.120) supra, does not specify how an attorney who has been employed by the superintendent is to be paid, nor is there any provision in the insurance code as to the method. ‘A statute merely giving an official power to employ counsel with consent of the governor does not convey the right to fix his compensation, * * *.’ 59 C.J. 174, Section 290. It, therefore, follows that the superintendent of insurance had a right to employ the respondents, but did not have the power to contract that their compensation should be paid out of this fund.”

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Bluebook (online)
359 S.W.2d 790, 1962 Mo. LEXIS 649, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-johnson-v-leggett-mo-1962.