Robertson v. Ætna Ins.

Anderson, J.,

delivered the opinion of the court.

Appellees, insurance companies doing business in this state, filed their bill in the chancery court of Hinds county to correct the decree so far as it affected them entered in the case of Stokes V. Robertson, Revenue Agent, v. Ætna Insurance Company et al., in said court, and to have entered the decree sought and intended by the parties to be entered in said cause. A decree was rendered sustaining the prayer of appellees’ bill, from which appellant was granted an appeal to settle the principles of the cause.

The following case is presented: In February, 1921, the insurance commissioner through the attorney-general filed an intervention petition in the case of Stokes V. Robertson, Revenue Agent, v. Ætna Insurance Company et al., pending in the chancery court of Hinds county. By this intervention petition the insurance commissioner sought to recover under the provisions of sections 2625 and 2607, Code of 1906 (sections 5090 and 5070, Hemingway’s Code), from the insurance companies, defendants in that suit (among whom were appellees), the premium taxes due by them to the state for the last half of 1920, and sought to have the state’s claim therefor made a prior lien on the funds in the hands of the receivers in said cause, and also sought a personal decree against the defendants. In order to ascertain the amount of premiums written by the defendants in that case during the period mentioned discovery was prayed for against them, asking that in their answers they discover the amount of insurance written during the period in question. The appellees filed their answers showing the gross premiums received by them during said period and the amount of premiums returned on account of cancellations, but failed to claim credit for reinsurance premiums.

In November, 1921, a personal decree with six per cent, interest thereon from the date of said decree, was taken against each of appellees for the amount of the gross premiums shown by their answers to have been written by them less cancellations, no deduction whatever being made on account of reinsurance. Thereafter it was ascertained by appellees that they had failed to discover in their answers and claim credit for premiums paid on account of reinsurance. Thereupon appellees filed their bill in said cause, which was the origin of the present case, to correct said decree so as to give appellees credit for premiums paid by insurance companies who had reinsured part of the appellee’s business. Appellees charge in their bill that the state did not assert a claim in said cause against them or either of them for any amount other than the tax provided by said statute on the gross premiums written by them for the period in question, that by reason of mutual mistake of appellees and appellant a decree was rendered against appellees for an amount in excess of said tax, and that said mistake arose by reason of tbe fact that the appellees had ceded a portion of the insurance written by them in the state to other insurance companies who were also parties defendant in said receivership, and that in said decree appellees were charged with the full amount of gross premiums written by them, and such other insurance companies were likewise charged with the full amount of gross premiums written by them, including reinsurance premiums, and therefore the result was as to such insurance to impose double liability for the same premium. In other words, the recovery as had in said cause for premium taxes against appellees and other companies therein sued overlapped on account of appellees through mistake in their answers failing to discover the amount of reinsurance premiums for which they were entitled to credit. The bill charged that the state in said cause did not assert any such liability against appellees and that appellees did not intend to confess such liability in their answers; that it was the purpose and intent of both the state and the defendants in said .cause that the state recover alone what it was entitled to under the law, namely, premium taxes on the gross amount of premiums received by appellees less cancellations, and deduction for taxes paid on reinsurance of appellees ’ business by other companies; that except for such mistake the decree that was entered would not have been entered, but instead the decree now sought in this cause would have been entered.

The court below granted the prayer of appellees’ bill and entered the decree that was intended to be entered in the said receivership cause. Appellant contends that the court was without authority to so decree; that although the decree that was entered in said receivership cause would not have been entered except for said mistake of appellees in making discovery in their answers in said cause, still appellees have had their day in court and there is no remedy at a subsequent term of the court to correct said mistake.

Where through accident, mistake, or fraud a judgment or decree is incorrectly entered arid is not the judgment or decree which would have been entered had not such accident, mistake, or fraud intervened, then in such case a court of equity will afford relief and correct such judgment or decree. The power of a court of equity in such a case does not depend upon nor is it restrained by section 1016, Code of 1906 (section 736, Hemingway’s Code), but is an independent ground of equity jurisdiction. The power of the court of equity in such cases to grant relief is complete. One of the original heads of equity jurisdiction is the power to correct judgments for fraud, accident, or mistake. The jurisdiction of equity in case of accident or mistake is as broad as its jurisdiction in cases of fraud. Where the parties to a cause and the court trying the cause, acting on the belief that a certain state of facts existed, entered a judgment based on such facts, but by reason of mistake as to facts such judgment would work a hardship to any of the parties, equity will give relief. Webster v. Skipwith, 26 Miss. 341; Wilson v. Town of Handsboro, 99 Miss. 252, 54 So. 845, Ann. Cas. 1913E, 345; Brown v. Wesson, 114 Miss. 216, 74 So. 831. In discussing a like question in Webster v. Skipmth, supra, the court quoted with approval the following from Story and Chief Justice Marshall:

“ ‘That in all cases where by accident, mistake, or fraud, or otherwise, a party has an unfair advantage in proceeding in a court of law, which must necessarily make that court an instrument of injustice, and it is, therefore, against conscience that he should use that advantage, a court of equity will interfere and restrain him from using the advantage.’ 2 Story’s Eq. Jur., section 885.

“Chief Justice Marshall thus states the rule: ‘Any fact which proves it to be against conscience to execute such judgment, and of which the injured party could not have availed himself in a court of law, or of which he might have availed himself at law, but was prevented by fraud or accident, unmixed with any fault or negligence of himself or of his agents, will _ authorize a court of equity to interference.’ Marine Insurance Co. v. Hodgson, 7 Cranch (U. S.) 332, 3 L. Ed. 362.”

We have here a judgment entered admittedly on account of a misapprehension of the true facts by the parties to the cause and the court entering the judgment; a judgment not authorized by law and a judgment not sought by the complainant. Appellees in their answers undertook .to discover the true amount, namely the gross premiums received by them during the period inquired about, less cancellations and deductions on account of reinsurance. In making discovery they overlooked claiming credit for reinsurance. Both parties were seeking the same facts. There was no misunderstanding between them. They both, misconceived the facts. There could be no controversy as to what the true amount was when the gross amount of premiums received had been shown with the deductions for cancellations and reinsurance. The parties simply intended to have one judgment entered and through mistake they had another and a different judgment entered. We think the case comes clearly within the principles laid down in the authorities cited.

Affirmed and remanded as to the following companies: London & Lancashire Insurance Company, Limited, Palatine Insurance Company of Great Britain, Urbaine Insurance Company, Providence-Washington Company, and Providence Underwriters’ Agency Insurance Company.

Affirmed and remanded.