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Taylor v. Betts

Supreme Court of Arizona

April 20, 1942

ELLA TAYLOR, Appellant,
v.
AMOS A. BETTS, WILSON T. WRIGHT, and WILLIAM M. COX, and FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Corporation, and FIDELITY & CASUALTY COMPANY OF NEW YORK, a Corporation, Appellees

APPEAL from a judgment of the Superior Court of the County of Maricopa. Arthur T. LaPrade, Judge. Judgment affirmed.

Messrs. Struckmeyer & Struckmeyer, and Mr. H. S. McCluskey, for Appellant.

Mr. Joe Conway, Attorney General, and Mr. W. E. Polley, Assistant Attorney General, for Appellees Betts, Wright and Cox.

Messrs. Baker & Whitney, and Mr. Lawrence L. Howe, for Appellees Cox and Fidelity and Deposit Company of Maryland.

Mr. Riney B. Salmon, for Appellees Wright and Fidelity & Casualty Company of New York.

Messrs. Perry, Silverthorne & Johnson, for Appellee Fidelity and Deposit Company of Maryland.

Messrs. Stockton & Karam, for Appellee Betts.

OPINION

Page 765

[59 Ariz. 174] LOCKWOOD, C.J.

Ella Taylor, plaintiff, on December 21, 1938, filed suit against Charles R. Howe and five other members and ex-members of the corporation commission and their bondsmen, defendants, alleging, in substance, that they had willfully and unlawfully issued certificates authorizing the Union Reserve Life Insurance Company, called the company, to transact business in the State of Arizona without its having first complied with the laws of Arizona, and had renewed such certificates from time to time, when said company, as a matter of fact, was insolvent, all of which facts defendants knew, or by reasonable diligence in the discharge of their official duties should have known, and that they had willfully concealed from the legislature and the general public the true [59 Ariz. 175] condition of said company; that plaintiff's husband, the insured, in 1933 had secured a life insurance policy from the company, relying upon the fact that defendants had issued certificates of authority to it to do business, and had died in 1937, but that the company, because of its insolvency, failed to pay said insurance policy according to its terms. It was further alleged that the insured would not have purchased the policy had he known the true condition of the company but would have purchased insurance from a solvent company authorized to do business in Arizona, and that he had no knowledge at any time of the company's true condition, but relied upon the acts of defendants in licensing it as an assurance that it was at all times solvent.

Defendants demurred to the complaint on several grounds, among them being that there was a defect of parties defendant and a misjoinder of parties defendant, and that the causes of action set up in the complaint were barred by the statute of limitations. The court sustained the demurrer both on the ground of misjoinder and statute of limitations, granting leave to plaintiff to amend, but she stood upon her complaint and judgment was rendered in favor of defendants.

The case came before us on appeal, together with another case in which Alice Bankhead was plaintiff and the defendants in the Taylor case were defendants, wherein an almost identical state of facts was set up, and the trial court made the same ruling as in the Taylor case. It was agreed that the same rules of law applied to both cases, and that the same judgment might be rendered in both of them by this court based upon one opinion. In the Bankhead v. Howe case, 56 Ariz. 257, 107 P.2d 198, 201, 131 A.L.R. 269, after setting up the facts, we said: [59 Ariz. 176]

"We have held, in the case of Button v. Nevin, 44 Ariz. 247, 36 P.2d 568, that a state superintendent of banks who willfully and knowingly neglects or fails to perform his official duties is liable upon his bond for any damages suffered to parties through such neglect and failure, and that when he allows a bank to engage in business without having fulfilled the conditions specifically required by law, he and his bondsmen are liable for damages to any private parties sustained through the subsequent insolvency of the bank. We think, in reason, the same rule applies if the officers charged with the supervision of insurance companies permit them to engage in the business of selling insurance in Arizona when such officers know, or with reasonable diligence in the discharge of their official duties should have known, that the companies have failed to comply with the specific prerequisites set up by the law as a condition to their engaging in business." But we further held that there was an improper joinder of parties defendant for reasons set forth in the opinion, and stated:

"Since the demurrer was properly sustained on the ground of misjoinder and judgment rendered thereafter, it is unnecessary for us to consider the effect of the statutes of limitation and the other questions raised by the ...


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