Caminetti v. Superior Court
Caminetti v. Superior Court
Opinion of the Court
In this original proceeding in prohibition the petitioner, as Insurance Commissioner of the state, seeks to restrain the respondent Superior Court in and for the City and County of San Francisco from proceeding with the hearing and determination of a cause now pending before it.
An alternative writ of prohibition was issued by this court upon a petition alleging that on August 15, 1940, the petitioner, as Insurance Commissioner, caused to be filed with the respondent Superior Court, pursuant to section 1011 of the Insurance Code, an application for order appointing him conservator of the Mount Moriah Life Insurance Company, a California corporation having its principal office and place of business in San Francisco; that on the same day, and pursuant to such request, the respondent court made its order appointing petitioner conservator, vesting in him as such title to all of the assets of the company and directing him to take possession of its books, records and property with a view to conducting the business until the further order of the court, to the exclusion of the officers and agents of the company, who were thus precluded from interfering with his activities as conservator; that thereupon petitioner immediately took possession of the company’s assets and records as conservator and on the same day removed the principal office of the company to the city of Los Angeles, under the provisions of section 1040 of the Insurance Code; that on the following
In defense of its action, the respondent court sets forth in its return and brief in support thereof the contention that it cannot lawfully transfer the conservatorship proceeding to Los Angeles or refrain from hearing the application to terminate the same. The validity of this defense depends upon the proper interpretation of several sections of the Insurance Code.
Section 1011 provides that “The Superior Court of the county in which is located the principal office of such person [includes corporation, sec. 19] in this State shall, upon the filing by the commissioner of the verified application showing any of the following conditions hereinafter enumerated to exist, issue its order vesting title to all of the assets of such [corporation], wheresoever situated, in the commissioner . . . and direct the commissioner forthwith to take possession of all its books, records, property, real and personal, and assets, and to conduct, as conservator, the business of said [corporation], or so much thereof as to the commissioner may seem appropriate, and enjoining said [corporation] and its officers, . . . from the transaction of its business or disposition of its property until the further order of said court: . . . [then follow ten enumerated grounds warranting an order of conservatorship].”
Section 1012 provides that “Said order shall continue in force and effect until, on the application either of the commissioner or of such [corporation], it shall, after a full hearing, appear to said court that the ground for said order directing the commissioner to take title and possession does not exist or has been removed and that said [corporation] can properly
Section 1040 provides that “At any time after an order is made under sections 1011 [conservatorship] or 1016 [liquidation], the commissioner may remove the principal office of the [corporation] proceeded against to the city and county of San Francisco or to the city of Los Angeles. In event of such removal, the court wherein the proceeding was commenced shall, upon the application of the commissioner, direct its clerk to transmit all of the papers filed therein with such clerk to the clerk of the City and County of San Francisco or of the county of Los Angeles as the case may require. The proceeding shall thereafter be conducted in the same manner as though it had been commenced in the county to which it had been transferred. ’ ’
The issues in this ease reduce themselves to one of statutory construction. In enacting the Insurance Code the legislature exercised its power to regulate a business peculiarly charged with a public interest. (Carpenter v. Pacific Mutual L. Ins. Co., 10 Cal. (2d) 307, 329 [74 Pac. (2d) 761] ; German Alliance Ins. Co. v. Hale, 219 U. S. 307, 316 [31 Sup. Ct. 246, 55 L. Ed. 229]; In re Bean, 207 App. Div. 276 [201 N. Y. Supp. 827, 828].) In this light the several sections in question must be considered together and not as unrelated provisions.
The respondent court urges that the commissioner, as conservator, having invoked section 1040, must conform thereto in every particular. That section states that the commissioner, once he is appointed conservator, “may remove the principal office” of the company proceeded against to San Francisco or Los Angeles, in which event the court where the proceeding was begun “shall” upon application of the conservator order a transfer of the proceeding and papers to the city chosen. Section 16 of the Insurance Code declares that as used therein the word “shall” is mandatory unless otherwise apparent from the context. There is nothing in the context of section 1040 to indicate that the word “shall” therein is other than mandatory. Upon removal of the principal office of the company to either city, the court wherein the proceeding was commenced must accordingly transfer the proceeding upon application therefor.
The rehabilitation sections of our Insurance Code trace their origin to the New York statute whose history is pertinent. That statute originally provided that after commencement of a rehabilitation or conservatorship proceeding in the judicial district in which the involved company had its “principal office” (see. 408), the superintendent of insurance “may remove the principal office of the insurer to the county of Albany” in the event of which removal “the court shall upon the application of the superintendent, direct the clerk of the county wherein such proceeding was commenced, to transmit all of the papers filed therein with such clerk to the clerk of the county of Albany and the proceeding shall thereafter be conducted in the same manner as though it had been commenced in the county of Albany”. (Chap. 30, sec. 412, Cahill’s Consol. Laws of New York, 1931-1935.) For all practical purposes, this provision and section 1040 here in issue are alike. As thereafter amended, however, the New York statute declared that “Any time after the commencement of a proceeding . . . the superintendent may apply ex parte to the court . . . for an order changing the venue of, and removing the proceeding to Albany county, or, in the discretion of the superintendent, to any other county of this state in which he deems that such proceeding may he most economically and efficiently conducted. Upon the filing of any such application for removal, the court . . . shall direct the clerk of the county wherein such proceeding is then pending to transmit all of the papers filed therein with such clerk
This transition of the parent statute from one contemplating the removal of the “principal office” of the insurer to Albany County followed by a transfer of the proceeding to that county, to one permitting the transfer of the proceeding to any county “in the discretion of the superintendent” (without any necessity for the prior removal thereto of the principal office of the company involved) strengthens the belief that the transfer of such a rehabilitation proceeding is intended to facilitate the work of the conservator. The complete removal of the principal office and business of the company to another city might not only handicap his work, but frustrate the whole purpose of the rehabilitation proceeding.
The respondent court also urges that before a removal and transfer may be effected the hearing contemplated by section 1012, to determine whether “the ground for said order directing the commissioner to take title and possession does not exist or has been removed”, must occur in the county wherein the proceeding was commenced and the conservator appointed. This point is grounded principally upon the language “said court” appearing in section 1012. Such a construction would actually serve to nullify the provision in section 1040 which declares that after removal of the principal office to either county and the consequent transfer of the cause thereto, “The proceeding shall thereafter be conducted in the same manner as though it had been commenced in the county to which it had been transferred”. When the relevant sections of the Code are read in relation to one another, it is clear that the phrase “said court” in section 1012 refers to the court in which the proceeding was commenced only when there is no removal or transfer as contemplated in section 1040. Otherwise it applies to the court of transfer which under the positive language of section 1040 shall then conduct “the proceeding ... in the same manner as though it had been commenced in the county to which it had been transferred”. Any other construction would violate the plain language and intention of the legislature. Moreover, to restrict under all circumstances the meaning of the words “said court” ap
The respondent court contends further that the removal provision of section 1040 was intended to permit removal of the principal office of a company and transfer of a rehabilitation proceeding “to” but not “from” San Francisco. In brief, it urges that such transfer may be made from any county to either San Francisco or Los Angeles, the places designated in the statute, but that such transfer may not be made from one of said designated places to the other. This contention, far from being borne out by the history of the statute, seems actually to be precluded thereby.
The Liquidation Act, as originally enacted (Stats. 1919, p. 268) provided in section 12 that at any time after commencement of a proceeding thereunder the commissioner might remove the principal office of the company involved “to the city and county of San Francisco”. At that time, the only office maintained by the commissioner was located in San Francisco by virtue of statutory requirement. (Sec. 592, Pol. Code.) This section was amended in 1927 by adding thereto “and shall also keep an office in the City of Sacramento”. In 1935 it was codified and became section 12905 of the Insurance Code, at which time there was added thereto “and an office in the City of Los Angeles”. In conformity with such amendment, the legislature amended the 1919 Liquidation Act and incorporated it in the Insurance Code as section 1040. Since 1935, therefore, the section has required the commissioner to maintain offices in San Francisco, Sacramento and Los Angeles. When the several sections of the Insurance Code are read as a whole, it is clear that they pro
Throughout the proceeding in the respondent court the commissioner repeatedly sought to establish a lack of jurisdiction in the respondent court to proceed after his removal of the principal office of the insurer and his application
While the conservator has requested only prohibition to stay further proceedings in the respondent court, this court has authority to grant any appropriate relief within the issues presented by the pleadings. (Board of Trustees v. State Bd. of Education, 1 Cal. (2d) 784, 787 [37 Pac. (2d) 84, 96 A. L. R. 775]; 9 Cal. Jur. Ten-Year Supp. 567, sec. 29.) The respondent court is therefore required not only to refrain from further action in the conservatorship proceeding but to transfer that proceeding to Los Angeles County in conformity with the conservator’s removal of the principal office of the insurer and in pursuance of his application for such transfer, as authorized by the statutes in question.
In determining this matter we have had access to and have considered the briefs filed by the respondents in three companion cases. Nothing in those briefs requires a contrary conclusion herein.
Let peremptory writs of prohibition and mandate issue respectively restraining the respondent Superior Court from taking any further steps or proceedings in the conservator-ship proceeding, now pending in that court, and directing that court to transfer the proceeding to the Superior Court of the State of California in and for the County of Los Angeles.
Gibson, C. J., did not participate in the decision.
Dissenting Opinion
I cannot agree that the Insurance Code allows the commissioner, immediately upon his appointment as conservator of a company having its principal office in San Francisco, to remove that office to Los Angeles. Undoubtedly the purpose of section 1040 is to facilitate the work of the commissioner. But as he maintains an office in San Francisco, removal of the insurance company’s office to Los Angeles appears to be a most drastic procedure which should not be approved in the absence of express statutory authority therefor.
During this time, particularly, his work should be accompanied with a minimum of inconvenience to the company whose assets he is conserving. In organizations of any size there may be many thousands of policyholders and creditors. To allow him to summarily remove the company’s office from the city where it has been carrying on its business for many years, and where he has a large administrative staff, seems to me to impose hardships which the legislature has not sanctioned.
Until 1935, the Liquidation Act (Stats. 1919, p. 268) authorized the commissioner to remove the principal office of a company whose business he was administering “to the city and county of San Francisco.” When the Insurance Code was enacted, the legislature made a requirement that the commissioner shall maintain an office in Los Angeles and added to the provision authorizing removal the words “or to the city of Los Angeles.” To me, these changes indicate a legislative purpose to broaden his power of removal to include the new office at Los Angeles, but I cannot read into them an intention to authorize the removal of an insurance company’s office from San Francisco, where the commissioner also maintains an office, to Los Angeles.
For these reasons, I believe that the writs sought by the applicant should be denied.
Rehearing denied. Edmonds, J., voted for a rehearing.
Reference
- Full Case Name
- A. CAMINETTI, Jr., as Insurance Commissioner, Etc., Petitioner, v. SUPERIOR COURT OF THE CITY AND COUNTY OF SAN FRANCISCO, Respondent
- Cited By
- 24 cases
- Status
- Published