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eBook details

• Title: Monarch Fire Ins. Co. v. Holmes
• Author : Supreme Court of Montana
• Release Date : January 28, 1942
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 60 KB

Description

Corporations ? Insurance ? Order of Insurance Commissioner Why Alleged Subsidiaries Should Not be Barred from Doing Business in State ? Lack of Jurisdiction ? Writ of Prohibition. Prohibition ? When Writ should Issue. 1. Where, on appeal from an order of the district court granting a motion to quash an alternative writ of prohibition, it is made to appear that that court can under no conceivable circumstances render a valid judgment because of a lack of jurisdiction, the writ - Page 304 should issue to the end that litigants may be saved the needless trouble and expense of prosecuting their litigation to a fruitless judgment. Corporations ? Equity ? When Corporate Identity may be Disregarded. 2. Ordinarily, a corporation whose stock is owned partly or entirely by another corporation, retains its separate and distinct identity, but where it is made to appear that it is a subsidiary and under the control of another corporation and acts as its agent or is so identified with it as in effect to make the two corporations one, its corporate identity will be disregarded by the courts, if it is shown that the corporate cloak is being used as a subterfuge to defeat public convenience, to justify wrong or to perpetuate fraud. Same ? What Sufficient and what not Sufficient to permit Disregard of Corporate Entity. 3. Mere control of a corporation by another is not sufficient to make the rule permitting disregard of the corporate entity applicable; it must be shown that the subsidiary is the mere alter ego of the controlling corporation and that it is a mere adjunct or business conduit of it. Same ? Insurance Corporations ? Order of Insurance Commissioner to Show Cause why Corporation should not be barred from Doing Business in State ? Lack of Jurisdiction ? Prohibition ? Case at Bar. 4. The State Insurance Commissioner issued orders to show cause to two insurance companies, which were licensed separately to do business in the state, why they should not be barred therefrom, not because they had violated any statutory provisions, but because of the alleged wrongdoing of a third (see State ex rel. Pearl Insurance Co. v. Holmes, ante p. ____) said to have control over or ownership of the two, on the theory that the three were actually but one, and that the two had no separate corporate existence. The orders were not directed to the two complaining companies but to the alleged parent corporation. Held, under the above rules as to when only corporate identity may be disregarded, and further because of the failure of the commissioner to address the orders to show cause to the two complaining companies, as required by section 167, Revised Codes, he acquired no jurisdiction to issue them, and therefore the district court improperly sustained a motion to quash alternative writs of prohibition sued out by each of relator companies to restrain the commissioner from hearing and passing upon the orders to show cause.

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