Lloyds of Texas v. Bobbitt

On Motion for Rehearing.

' In paragraph 14 of their motion for rehearing, appellants contend that we erred in holding that the board (insurance commissioners) interpreted the report of W. D. Prince, examiner, made to W. A. Tarver, chairman, as disclosing that the guaranty fund of the exchange was exhausted, and showed a condition of insolvency. Appellants say: “Such holding and finding of fact by the Court of Civil Appeals is unsupported by and contrary to the evidence of the plaintiff, being the appellee herein.” We based this conclusion upon the testimony of Mr. Tarver, who said: “I remember having an examination made of the Lloyds of Texas in the spring of 1930 in the course of my official duties. The firm of Hutehinson-Smith-Prince & Harris made the examination and the report of that firm was submitted to my office. Upon receipt of that report, we communicated with the attorney in fact, calling attention to the fact that the report disclosed an impairment of the guaranty fund, and calling upon him to make it good, but it was not made good.” In a letter written April 19, 1930, to certain underwriters who failed to attend the meeting at Dallas April 14, Mr. Tarver said: “This department’s audit reveals a hopelessly insolvent condition.” In' view of this and other evidence disclosed by the record, there can be no question but that the board proceeded on the idea that the report of the examiners revealed the insolvency of the exchange.

In paragraph 15 appellants say: “The court erred in holding that, the testimony of Mr. Prince was to the effect that the guaranty fund was exhausted, and that the liabilities exceeded the minimum prescribed by the statute by $8,000, for the reason that Mr. Prince did not so testify and there is not a scintilla of testimony in the records to support such a finding by the Court of Givil Appeals.”

A scintilla of evidence means a mere spark, a trifle; hence to charge that the *903court arrived at the conclusion in question “■without a scintilla of evidence” is tantamount to saying that, we acted without any evidence whatever. The conclusion to which appellants leveled the criticism is this, we said: “The testimony of Mr. Prince is to the effect that the guaranty fund was not only exhausted, but that liabilities exceeded the minimum prescribed by statute over $S,000.”' Appellants’ allegations that Prince did not testify as stated, and that our finding in this respect is “without a scintilla of evidence to sustain it,” are, in the light of Prince’s uncontradicted testimony, reckless and unwarranted, for Prince said: “My report, together with the anaylsis of the affairs of the Lloyds of Texas, disclosed the condition of the reserve fund, the guaranty fund. The assets of the company lacked $8,000 amounting to as much as the liabilities. The report shows that the guaranty fund, which should be $60,000, as required by law, instead of having the $60,000 it shows there was no guaranty fund, but that the liabilities exceed the assets by $8,015.39, as reflected by the records of the company.”

Ire several paragraphs, appellants insist that we erred in finding that the board of insurance commissioners, through Mr. Tar-ver, chairman, requested the Attorney General to institute these proceedings. They say the uncontradieted testimony shows that Mr. Tarver acted independently of the board, and that the plural form of pronouns appearing in his testimony — such as “we,” “us,” and “our” — related to the joint action of Tarver, and Mr. Dexter Hamilton, associate counsel, and did not refer to the joint action of Tarver and other members of the insurance board. We do not think Tarver’s testimony is susceptible of the construction contended for by appellants; on the contrary, as stated in the original opinion, we think the testimony shows that throughout Tarver acted in conjunction with other members of the board.

The contention is further made that we erred in holding that the notes of subscribers held by the exchange could not be taken into consideration in determining the question of its solvency. We probably used inapt language; what we meant is, that under the arbitrary rule adopted by the Legislature (article 5017b) a Lloyds Exchange becomes insolvent when its minimum assets ar.e either exhausted or fall below the prescribed level. While notes of underwriters are gross assets, they constitute no part of the guaranty fund, and cannot be considered in determining the sufficiency of the minimum assets required, at all times, for the payment of losses. The language of the original opinion will be corrected to conform to this idea.

After due consideration, .we find no merit in. appellants’ motion for rehearing, and the same is overruled.

Overruled.