Opposition Brief — Haines v. Pennsylvania

SKEYSTONE MUTUAL POLICYHOLDERS’ COMMITTEE,

~~ 08.

COMMONWEALTH OF PENNSYLVANIA;

- WILLIAM ET AL;

~~ KURT HITKE AND COMPANY, ET AL;

‘”- CLAUDE B. HANLEY, ANCILLARY RECEIVER

—- OF THE STATE OF MARYLAND Pye

Appellees —

BRIEF IN OPPOSITION TO MOTION

TO DISMISS APPEAL ——

Pont

Exus G. ARNALL

¥ Cresuane E. Grecony, Jr.

ARNALL, GOLDEN AND GREGORY

First National Bank Bldg.

Atlanta, Georgia

INDEX

Susyect INDEX

Page

Brief Opposing Motion to Dismiss Appeal _.___ 1

I. Summary of Relevant Facts. 1

Il. Does Appeal Lie as the Method of Review? 7

III. Does the Court Have Jurisdiction to Review

Either by Way of Appeal or Certiorari? ._.. 14

(1) The Decree of Dissolution Was Not Ap-

pealed _. _ m: *

(2) Was the Federal Question Properly

Raised and Preserved in the State

Courts? __. 15

(3) Is There a Present Case or Controversy? 16

(4) Is a Substantial Federal Question Pre-

(5) Does the Decision Rest Upon Non-Fed-

eral Grounds which = -

port the —— ; 21

IV. Conclusion Lose Rab Se

TABLE OF CasEs

Abie State Bank v. Bryan, 282 U.S. 765, 51 S. Ct.

a Ee ly OI CI eee tinccigniicteinnscbidilasnnancitieasieatine 23

Allen vy. Southern Pacific Railroad Company, 173

U.S. 479, 19 S. Ct. 518, 43 L. ed. 775 24

Anderson National Bank v. Luckett, 321 U.S. 233 64

S. Ct. 599, 88 L. ed. 692_. 10

Armour Transportation Company v v. . Pennsylvania

Public Utility Commission, 138 Pa. Super. Ct.

3, 209 _.. 9

Ballard v. Hunter, 204 U.S. 241 27 S. Ct. 261, 51

L. ed. 461_. 10

Carlson v. Washington, 234 U.S. 103, 34S. Ct. 717,

58 L. ed. 1237 8

Chambers v. Baltimore & Ohio Railroad Company,

207 U.S. 142, 28 S. Ct. 34, 52 L. ed. 143... 8

Coe v. Armour Fertilizer W orks, 237 U.S. 314, 35 S.

Ct. 625, 59 L. ed. 1027 24

Commonwealth ex ret Chidsey v. Keystone Mutual

Casualty Co., 366 Pa. 149 esionnattiiaina Ea

PIE OLE TAO CAP th Mig oO TIE i

ii INDEX

Consolidated Turnpike Company, et al, v. reo

& Ocean View Railway Company, 228 U.S. 596,

33 S. Ct. 510, 57 L. ed. 982. nienbtintiengumnpaans 13

DeJonge v. Oregon, 229 U.S. 353, $75. Ct. 255, 81

L. ed. 278... pas 16

Dohany v. Regers, 281 US. 362 50 S. Ct. 299, 14

ir OR Ge Aiccricncsicenicsinstieetenneeseideacintinerisilibiaghibenisttaties 10

Enterprise Irrigation District v. Farmers Mutual

Canal Company, 243 U.S. 157, 37 S. Ct. 318, 61

L. ed. 644 _ 22, 23

Gelpcke v. The City of Dubuaue, 68 US. a Wall)

175, 17 L. ed. 520... 26

Hansberry v. Lee, 311 US. 32, 61 s. Ct. ‘115, 85 L.

ed, 22 . 13

Lancaster end Minteer’s Appeal, W Pa. 524. 17

Live Oak Water Users’ Ass'n. v. Railway Commie

sion of California, 269 U.S. 354, 46 S. Ct. 149, 70

L. ed. 306_........... ll

Mallinckrodt Chemical W orks v. , Missouri, ¢ ex s rel

Jones, 238 U.S, 41, 35 S. Ct. 671, 59 L. ed. 1192_. 8

Manhattan Life Insurance Company of New York v.

Cohen, 234 U.S. '23, 34S. Ct. 874, 58 L. ed. 1245 9

Memphis Natural Gas Company v. Beeler, 315 U.S.

649, 62 S. Ct. 857, 86 L. ed. 1090... ll

Miedreich v. Lowenstein, 232 U.S. 236, 34 S. Ct.

ee ee ee ee 8

Montana ex rel Haire v. Rice, 204 U.S. 291, 27 S.

Ct. 281, 51 L. ed. 490... oe 8

Montgomery County Bar Ass’ n. V. Rinaldueci +329

eee seen 9

National ye Corp. v. Barfod, 289 na 307. eas 14, 21

New York ex rel Bryant v. Zimmerman, 278 U.S. 63,

rf ee fy fe Se es.

North Carolina Railroad Company v. Zachary, 232

U.S. 248, 34 S. Ct. 305, 58 L. ed. 591... 8

O'Neill v. ~pamede 239 U.S. 244, 36 S. Ct. 54, 60

L. ed. 249... eee

INDEX

i

Penn. General Casualty Co. v. Commonwealth of

Pennsylvania, 294 U.S. 189, 55 S. Ct. 186, 79 L.

ed. 850 - 19

Postal Telegraph-Cable Company \ v. . City of ‘New-

port, 247 U.S. 464, 38S. Ct. 566,62 L.ed.1215. 22, 23

Rose v. Turnpike Co. (Pa.) 3 Watts 46_. 14

St. Louis, [ron Mountain & Southern Railway Com-

pany v. Hesterly, 228 U.S. 702, 33 S. Ct. 703, 57

i S Ree 8

Standard Oil Company of California \ v. . Johnson, 316

U.S. 481, 62 S. Ct. 1168, 86 L. ed. 1611. 25

Texas & Pacific Railway Company v. Abilene Cotton

Oil Co., 204 U.S. 426, 27 S. Ct. 350,51 L.ed.553 15

Union Trust Co. of Pittsburgh Case, 359 Pa. 363. 10

Ward & Gow v. ad 259 U.S. 503, 42 S. Ct.

529, 66 L. ed. 1033_ Se PO: ee eS 25

FeperAL Statutes Cirep

Act of June 25, 1948, C. 646, 62 Stat. 929, 28 U.S.C.

1937 (2) —. 10, 12

Act of June 25, 1948, c. 646, 62 Stat. 962, 28 U.S.

C. 2103 13

PENNSYLVANIA STATUTES CITED

Sec. 213, Pennsylvania Insurance Department Act

- May 17, 1921, as amended, P. L. 789 (40 P.

S. 51) 3, 20, 21, 26

Sec. 321, Pennsylvania Insurance Department Act of

May 17, 1921, P. L. 789 (40 P. S. 131). 4, 20, 21, 26

Sec. 502, Pennsylvania Insurance Department Act of

May 17, 1921, as amended, P. L. 789 (40 P. S.

202) .... 5, 17, 18, 19, 20, 21

Sec. 505, Pennsylvania Insurance Department Act of

May 17, 1921, as amended, P. L. 789 (40 P. S.

| ope oe Ye 5S

Sec. 506, Pennsylvania Insurance Department Act of

May 17, 1921, as amended, P. L. 789 (40 P. S.

SOD sessecseailas . 16, 17, 18, 19, 20, 26

Sed do aae

owe ia

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1953

No.

KEYSTONE MUTUAL POLICYHOLDERS’ COMMITTEE

Appellants

vs.

COMMONWEALTH OF PENNSYLVANIA;

WILLIAM GOLDSTEIN, ET AL;

KURT HITKE AND COMPANY, ET AL;

CLAUDE B. HANLEY, ANCILLARY RECEIVER

OF THE STATE OF MARYLAND,

Appellees

BRIEF OPPOSING MOTION

TO DISMISS APPEAL

The purpose of this brief, filed in compliance with the per-

mission granted by Rule 7(3) of the Supreme Court of the

United States is to oppose the motion filed by the Goldstein Com-

mittee, one of the appellees in the above matter, to dismiss the

appeal on jurisdictional grounds. Accordingly, for the con-

venience of the Court, the component parts of the brief will be

numbered to correspond with those parts of the motion which

they undertake to answer.

I. Summary of Relevant Facts

The facts have been set out in some detail in appellants’

Statement of Jurisdiction. However, the “Summary of Relevant

Facts” in the Motion to Dismiss contains a number of conclu-

2

sions which are either unsupported or qualified by the facts

appearing in the record, and which should be mentioned.

The decree of June 26, 1947, established that the company

was insolvent and that its further transaction of business would

be hazardous to its policyholders, its creditors and to the public

as appellees assert, only if the decree was valid. The decree was

not valid if appellants were deprived of rights guaranteed to

them by the Federal Constitution. That is the very issue now

before the Court. Thus the appellees introduce their motion by

assuming the ultimate conclusion now in dispute.

The nature of the “audit” and of the “admissions” by the

oficers who had falsified the annual statement of the company,

and accordingly stood to gain by co-operating with the Com-

missioner, one of whom had already asked the Commissioner

not to prosecute his wife who was the treasurer of the company

(R. 817a, 818a) have been set out in some detail in appellants’

Statement of Jurisdiction.

The inability of the company to raise funds necessary to put

it in a solvent condition was due both to the failure of the Com-

missioner to give it notice of the amount required (R. 896a)

and to the failure to give it the statutory time to make good the

impairment to its reserves. (R. 23la, 238a). Thus, the acknowl-

edgment of the Secretary and managing head of the company

referred to by appellees was as follows:

“After the telegram was sent out from Atlantic City, Mr.

Kann reported to me that they were unable to raise any

money over the period, that the thing had gone on.” (R.

825a)

The period referred to was from the first meeting between Kann

and the Commissioner which occurred a few days after the ex-

amination had commenced (R. 814a) on May 2], 1947 (R.

885a) until the telegram was sent out from Atlantic City on

June 4, 1947 instructing the company not to write any new or

PED OPO ORAL AES GEOL AIRE PORE EO Rh IN NOR Ce BR Hd RL ym : : ae ee

3

renewable non-assessable policies. (R. 823a) The statement by

counsel for the company at the hearing on June 25, 1947 was

as follows:

“* * * Now, when this situation arose the Company was

confronted with a practical question to try to raise money to

meet the department’s requirements. A sincere effort and a

more than sincere effort has been made in that direction

but unfortunately we are told that prospective lenders,

prospective companies who would e interested would need

at least sixty days before they could decide whether or not

they would take this company over. As late as six o’clock

last evening I was in touch with the Vice-President of a

company. This company is owned by one of the largest

merchandising companies in the world. I talked to the

Vice-President personally. He expressed a deep interest

and I impressed on him that this action was to be taken

this morning, at this time. He said ‘Well then, can you get

the Insurance Commissioner if we are interested, to defer

this hearing?’ I said ‘I am afraid not,’ but I said ‘If you

will give us a commitment, I believe that the Insurance

Commissioner will make, as he has made, an honest and

sincere effort to try to save this Company for the benefit of

the stockholders, of the creditors and of the public. I called

him back four hours later. I talked to his secretary and

the secretary said, ‘Mr. Reich, I have just sent you a wire,

“No interest due to lack of time.” ’ I feel that some group

is going to save this company. It is worthwhile saving.”

(R. 1770a)

Section 213 of the Pennsylvania Insurance Department Act of

May 17, 1921, as amended, P.L. 789 (40 P.S. 51) requires the

Insurance Commissioner to grant a hearing to the company ex-

amined before filing a report of examination. Such a hearing

would have put the company on notice of the amount and basis

of the deficit claimed and of the charges. However the company

did not see the report of examination until the hearing; on June

25, 1947. (R. 1765a)

2

Section 321 of the same act P.L. 789 (40 P.S. 131), provides

that the Commissioner shall, in case he finds the capital or

reserve of the company impaired 20%, give notice to the com-

pany to make good the capital or reserve within sixty days. That

notice or time was never given (R. 23la, 238a).

The deficiencies of the notice of the hearing on June 25, 1947,

based upon conclusions drawn from a report of examination

which was not prepared in compliance with statutory require-

ments and which was never furnished to the company before the

hearing, have been pointed out in the appellants’ Statement of

Jurisdiction.

The resolution of the directors again emphasized that the

inability of the company to raise the money necessary to bring

the reserves of the company up to the amount required by the

Commissioner was due to the lack of time afforded. It recited:

“Whereas, the Company has been advised that the reserves

of the Company do not meet the legal requirements of the

Insurance Department of the Commonwealth of Pennsyl-

vania; and

“Whereas, the Company has made many efforts to raise

sufficient moneys to bring the reserves up to the legal re-

quirements; and

nl ee ee a ee ee ee ae a lOO

“Whereas, the Company has been unable since it was noti-

fied that its reserves were inadequate to raise the additional

moneys necessary to bring the reserves of the Company up

to the legal requirements; and

“Whereas, the Company has been ordered not to do busi-

ness except the right to collect premiums and cancel poli-

cies; * * *” (R. 1761la, 1762a).

The resolution requested the Insurance Commissioner to imme-

diately take charge of the affairs of the Company “in order to

conserve the assets of the Company for the benefit of all con-

cerned” and the resignations of the officers and directors were

accepted “‘in order to facilitate any action of any person or com-

— eNO MP 1 ital PPR AAEM ARE IEA CIO AVEDA AS

5

pany to purchase or rehabilitate the Company.” At that time

the only notice which had been given was of the hearing under

Section 502. The liquidation of the company had never beep

suggeste |.

The ci npany had no officers after June 24, 1947 except Mr.

O'Neill, a Vice-President. (R. 1779a-1786a) The authority of

the attorney for the company who appeared at the hearing on

June 25, 1947, was limited by the resolution of the directors

adopted on june 24th. The resolution was in evidence. (R.

176la) This authority would have sufficed if the hearing had

followed the notice as a Section 502 custodial hearing. The

appearance, waiver of notice and of issuance of the rule, ac.

ceptance of service and consent to the granting of the relief

prayed was also specifically so limited to possession by the

Commissioner for the purposes of sale or rehabilitation; that

is, to possession under the provisions of Section 505 of the Act.

(R. 1839a) This was recognized by the Court to which the decree

of liquidation was presented, the decree reciting only that:

‘“* * * prior to the issuance of the said Rule the said Key.

stone Mutual Casualty Company, appeared by its attorney,

waived the issuance of the Rule, accepted service of the

same, and consented to possession of the company by the

Insurance Commissioner * * *”

(Emphasis added). (R. 1951la)

Also, the Deputy Attorney General who represented the Insur-

ance Department at the hearing testified:

“Q. You will agree with me there is nothing in that resolu-

tion that authorized the liquidation of the company, is

there?

* * *

The Witness:

No, Mr. Reich said the farthest he can agree is to go along

on having the Insurance Commissioner take over, because

that is what the resolution says, ‘and that is what my au

Se PMI er BPM EET) WF Hae

6

thority is.’ I said, ‘Can we agree to this decree we have

drawn up?’ Then in answe-, ‘First I can’t agree to the de-

cree; the best we can do is .\ccept service and agree to the

terms of the resolution that was given by my authority.’

** *

Q. Did Joseph Reich or any representative of the company

either urge or agree that this company be liquidated?

** *

The Witness:

They did not, quite to the contrary, they were insistent they

could get more money. Particularly Reich, he was insis-

tent he could get more money and put himself and the

Company in good shape and he said he had been trying to

do that for a considerable period of time. He had no au-

thority to agree to anything other than the Insurance Com-

missioner to take over, and hold until such time as he could

accomplish that purpose.* * *” (R. 299a, 303a)

Thus, the attorney for the company did not join in the prayer of

the Suggestion of the Attorney General for the liquidation of the

company, as stated in the Motion to Dismiss; and, in any event,

he had no authority to do so, which was well known both to the

Court and to counsel for the Insurance Department.

The statement in the Motion to Dismiss regarding the turning

over of assets by other states to the Pennsylvania insurance

Commissioner, the settlement of claims, waiver of rights and

abandonment of claims is not supported by any factual record

references, the reference there being to the argument in the

opinion of the Court of Common Pleas in support of its judgment

which, itself, does not lend support, except inferentially, to

such statements.

The statement in the Motion to Dismiss that “No appeal was

ever taken from the entry of this final decree,” if it has any sig-

nificance, again presupposes a valid decree of which appellants

had prior notice and an adequate opportunity to resist. They

had neither. The decree was attacked by the intervention of the

Matlack Committee on June 2, 1948. It has been under attack

ever since. The complaint of lack of notice and i

to be heard was not first raised on the appeal to the Supreme

Court of Pennsylvania, as stated in the Motion to Dismiss, but

was raised before the Court of Common Pleas and was discussed

and decided by that Court in its opinion filed March 17, 1952,

(R. 1735a-1739a) Neither was it necessary to elicit testimony

at the hearing from the officers and directors regarding the lack

of adequate notice and of opportunity to be heard. As Pointed

out in appellants’ Statement of Jurisdiction, it was completely

and thoroughly shown by the evidence.

Il. Does Appeal Lie as the Method of Review?

Much of this section of the Motion to Dismiss is devoted to an

effort to establish that the petition to vacate the decree of June

26, 1947, did not raise the Federal question; that under the

law of Pennsylvania the issue was determined by the pleadings,

and that matters not properly raised in the Court below cannot

be invoked on appeal, notwithstanding that they involve con-

stitutional questions. Appellees argument would have some merit

if the Supreme Court of Pennsylvania (as did the Court of

Common Pleas) had not considered the Federal question to be

properly before the Court and decided it against the appellants.

It said:

“The appellant intervenors contend that the decree of June

26, 1947, was void * * * (2) because it was entered with-

out the required notice or hearing * * *”

Again:

“In order to determine whether the decree of the court

below dated June **, 1947, was valid, it is necessary first

to consider (1) the provisions and requirements of the

Insurance Code of May 17, 1921, and (2) the constitu-

tional requirement of due process, i.e., notice of a hearing

and an opportunity to be heard. These are so closely related

Se —— = -

8

that they will be considered together.”

Again:

“= * The reason why this issue was never previously

raised must be obvious; there was adequate notice

ample opportunity to be heard in June 1947 and conse-

quently there was no failure of due process.”

And again:

“In the light of all these unusual and indisputable facts, it

would strain our credulity to believe and it would be

stretching the technicalities of the law far beyond reason

for us to hold that the officers and directors of this company

did not have adequate notice of the hearing, or that they

did not waive the technical requirements of the Insurance

and direct the Insurance Commissioner to take possession

of the Company for the purpose of liquidating it.”

Where it appears from the opinion of the State Supreme Court

that the Federal question was treated as being sufficiently raised,

and was specifically dealt with and ruled against the plaintiff

in error, and was necessary to its decision, this is sufficient to

confer jurisdiction upon the Supreme Court of the United States.

Mallinckrodt Chemical Works v. Missouri, ex rel Jones,

238 U.S. 41, 49, 35 S. Ct. 671, 59 L. ed. 1192.

North Carolina Railroad Company v. Zachary, 232 U.S.

248, 257, 34S. Ct. 305, 58 L. ed. 591.

Miedreich v. Lowenstein, 232 U.S. 236, 242, 34 S. Ct. 309,

58 L. ed. 584.

Carlson v. Washington, 234 U.S. 103, 105, 106, 34 S. Ct.

717, 58 L. ed. 1237.

St. Louis, Iron Mountain & Southern Railway Company v.

Hesterly, 228 U.S. 702, 704, 33 S. Ct. 703, 57 L. ed. 1031.

Montana ex rel Haire v. Rice, 204 U.S. 291, 298, 299, 27

S, Ct. 281, 51 L. ed. 490.

Chambers v. Baltimore & Ohio Railroad Company, 207

U.S. 142, 148, 28 S. Ct. 34, 52 L. ed. 143.

9

This would be true even though there were nothing in the present

record to show that the Federal question was raised in the court

below. When it appears that the Federal question was actually

considered and decided by the State Supreme Court it is irrele.

vant to inquire how and when it was raised in a court below,

Manhattan Life Insurance Company of New York v. Cohen,

234 U.S. 123, 134, 34 S. Ct. 874, 58 L. ed. 1245.

Although not here significant, it is interesting to observe that

in one of the cases cited by appellees as authority to the contrary,

the Supreme Court of Pennsylvania has passed upon important

constitutional questions which were not raised in the court below.

Montgomery County Bar Ass'n. v. Rinalducci, 329 Pa. 296,

Appellees next contend in their Motion to Dismiss that ques.

tion number 5 in appellant’s statement of the questions to be

argued on appeal in the Supreme Court of Pennsylvania, and

the opinion of the Supreme Court of that State make no specific

reference to the due process clause of the Federal Constitution,

as distinguished from the due process clause of the State Con-

stitution.

The opinion of the Court of Common Pleas shows clearly that

the attack was launched under the due process provisions of both

Federal and State Constitutions. Thus, it said:

“The Commonwealth has advanced the contention that this

company was cavalierly interred because certain adminis-

trative deficiencies constituted a lack of procedural due

process, as required by our Federal and State Constitutions,

and further because the entry of our decree of June 26,

1947 deprived the company and its member policyholders

of their property without due process of law, since it was

entered without compliance with the requisite statutory

requirements in the matter of notice and hearing: Armour

Transportation Company v. Pennsylvania Public Utility

— 138 Pa. Super. Ct. 243, 249 (1939).” (R.

)

10

The appellants, in their printed brief on appeal to the Su-

Court of Pennsylvania again made reference in the argu-

ment to the due process provisions of both the State and Federal

Constitutions. (Brief, pp. 37-49; R. —)

The Supreme Court of Pennsylvania understood that the chal-

lenge was under the due process provisions of both the Federal

and State Constitutions, and so decided it. It said:

“The fundamental requirements of due process in a pro-

ceeding affecting property interests are (1) a notice of pro-

ceedings appropriate to the nature of the case and adequate

to safeguard the rights of the parties, and (2) an oppor-

tunity to be heard. Anderson National Bank v. Luckett, 321

U.S 233; Dohaney v. Rogers, 281 U.S. 362; Ballard v.

Hunter, 204 U.S. 241; Union Trust Co. of Pittsburgh Case,

359 Pa. 363." (R. —)

The three cases first cited set out the requirements of due process

under the 14th Amendment to the Constitution of the United

States; the last cited case sets out the requirements under the

similar provision of the State Constitution.

In the case of New York ex rel Bryant v. Zimmerman, 278

U.S. 63, 68, 69, 49 S. Ct. 61, 73 L. ed. 184, under very similar

facts, this Court looked to the opinion of the intermediate ap-

pellate court, the printed briefs there, and the authority cited

by the highest appellate court of the State, from which the appeal

was taken, in order to determine that the challenge was under

the 14th Amendment to the Federal Constitution.

Appellees next contend in the Motion to Dismiss that the

Supreme Court of Pennsylvania was never asked to, and did not,

pass on the validity of the state statute, which is necessary to

give this Court jurisdiction on appeal under the provisions of

28 U.S.C. 1257(2).

Although question number five of appellants’ statement of the

questions to be argued on appeal in the Supreme Court of Penn-

SS ARR. HE LOO He

11

sylvania did not specifically assert the invalidity of the statute

as construed or applied, in attacking the decree as depriving

the company and its policyholders of property without due proc.

ess of law, it, of course, was predicated upon the challenge that

either the statute was violated or, if not, as had been held by the

Court of Common Pleas, the statute as so construed and applied

to permit the decree was invaiid. Reference to appellants

printed brief in the Supreme Court of Pennsylvania confirms

this as the argument. Thus, in the “Statement of Questions In.

volved” the question was stated in the alternative, as follows;

“1. Was the entry of the decree of liquidation and for.

feiture a violation of the applicable statutes or a denial of

due process of law? (Denied)”

(Briefp.1,R. )

The only logical interpretation of that question is that if the

decree did not violate the statutes, the statutes as construed and

applied violated due process. As acknowledged in appellees’

Motion to Dismiss (p. 6) the brief also makes reference to the

particular sections of the Insurance Department Act drawn in

question (Brief pp. 37-49, R. ) It is proper to refer to

the briefs in a state supreme court, which have been certified

as a part of the record, where assignments of error are not used,

in order to interpret the question which was decided by that

court.

New York ex rel Bryant v. Zimmerman, 278 U.S. 63, 68,

69, 49 S. Ct. 61, 73 L. ed. 184.

It would not be proper, as held in Live Oak Water Users Ass'n.

v. Railroad Commission of California, 269 U.S. 354, 357-358,

46 S. Ct. 149, 70 L. ed. 305, cited by appellees, and in Memphis

Natural Gas Company v. Beeler, 315 U.S. 649, 651, 62 S. Ct.

857, 86 L. Ed. 1090, if the state supreme court had not passed

on the Federal question and there was no showing that the ques-

tion could be properly raised under the state court practice in

that manner.

12

The opinion of the Pennsylvania Supreme Court leaves no

doubt that it construed the statute and considered and passed

upon the validity of the statute as so construed and applied to

the company under the facts shown by the evidence. It examined

the pertinent statutory requirements of notice and hearing to

see whether they complied with due process. Thus it said:

“In order to determine whether the decree of the court be-

low dated June 26, 1947, was valid, it is necessary first to

consider (1) the provisions and requirements of the Insur-

ance Code of May 17, 1921, and (2) the constitutional

requirement of due process, i. e., notice of a hearing and an

opportunity to be heard. These are so closely related that

they will be considered together.” (R. _)

It then noted the requirements of Sections 502 and 506 of the

statute relating to notice and hearing and set out the funda-

mental requirements of due process in a proceeding affecting

property interests. It did not note any defect in the statutory

requirements. However, dealing specifically with the statutory

requirements of an order to show cause and of a full hearing,

the Court construed them to be “technical requirements” which

had been complied with by the giving of “adequate notice of the

hearing” to the officers and directors of the company, or which

had been waived by the officers and directors; so that the court

had the right to authorize and direct the Insurance Commissioner

to take possession of the company for the purpose of liquidating

it. The Court specifically held that “* * * there was adequate

notice and ample opportunity to be heard in June 1947 and con-

sequently there was no failure of due process.” In thus holding

that the officers and directors of the company had adequate no-

tice of the hearing and ample opportunity to be heard, and that

there was no violation of the statute or failure of due process,

the Court necessarily sustained the validity of the statute as so

construed and applied, which meets the jurisdictional require-

ments for an appeal under the provisions of 28 U.S.C. 1257(2).

See the cases cited in appellants’ Statement of Jurisdiction. The

13

inadequacy of the “waiver” both factually and legally as ,

non-Federal ground which will support the judgment has also

been discussed there.

In the final analysis, even if the question raised and answered

had been only that rights, privileges or immunities guaranteed

to appellants under the due process provision of the 14th

Amendment to the Federal Constitution were violated, and the

question had not reached the validity of the statute as construed

or applied, this alone would not be ground for dismissal. Act

of June 25, 1948, c. 646, &% Stat. 962, 28 U.S.C. 2103. Under

the provisions of that statute, the papers whereon the appeal

was taken would be regarded and acted on as a petition for writ

of certiorari and as if duly presented to the Supreme Court at

the time the appeal was taken.

Where the facts show, as they do here, that petitioner’s prop.

erty was taken by a plain and substantial departure by the

Commonwealth from the fundamental rights so guaranteed by

the 14th Amendment to the Federal Constitution, a Federal

question of serious import is presented.

Consolidated Turnpike Company, et al., v. Norfolk &

Ocean View Railway Company, 228 U.S. 596, 599, 33 S.,

Ct. 510, 57 L. ed. 982, 983.

Hansberry v. Lee, 311 U.S. 32, 40, 61 S. Ct. 115, 85 L. ed.

22, 26.

O'Neill v. Leamer, 239 U.S. 244, 249, 36 S. Ct. 54, 60 L.

ed. 249, 264.

The forfeiture of the charter and the liquidation of the mutual

insurance company is not only a matter of utmost concern to

the Commonwealth, to the 26 states in which it has been conduct-

ing business, to the assureds (of whom there are approximately

105,000) who, as its members, are interested both in its assets

and their possible assessment liability (Commonwealth ex rel

Chidsey v. Keystone Mutual Casualty Co., 366 Pa. 149, 152;

AI GRRE, SLR ELIOT LILI ELIE ILL 6 SAE TN GAT SION ES

14

Rose v. Turnpike Co. (pa) 3 Watts 46, 48) and to its creditors,

but the decision has resulted in an apparent and unexplained

conflict in the decisions of the Supreme Court of Pennsylvania

regarding the necessity of compliance by the Commonwealth

with the notice and hearing provisions of the statute. In National

Auto Corp. v. Barfod, 289 Pa. 307, such provisions were held

essential to the validity of a statute under the 14th Amendment

to the Federal Constitution. In this case they were held to be

“technical requirements” which were either complied with or

which did not have to be complied with under the facts shown

by the evidence. This Court would not be expected to resolve

that conflict by construing the Pennsylvania Statute, but it can,

and should, insure the stability of the rights guaranteed by the

14th Amendment to the Federal Constitution against such vacil-

lation of a state court; especially when it involves a statute of

frequent application and of large public importance.

III. Does the Court Have Jurisdiction to Review

Either by Way of Appeal or Certiorari?

(1) The Decree of Dissolution Was Not Appealed.

The contention made in the Motion to Dismiss that the origi-

nal decree of June 26, 1947 was a final order and decree from

which no appeal was taken and, accordingly, appellants can

expect nothing more than that some consideration be given to

the allegation of lack of due process as one of a number of other

factors to influence the exercise of the equitable powers of the

court, is a question of state practice which has been precluded

by the decision of the Supreme Court of Pennsylvania. That

Court considered and decided the Federal question, not as an

additional reason for inducing the exercise of equitable powers,

but as going to the validity of the decree. It said:

“In order to determine whether the decree of the court be-

low dated June 26, 1947, was valid, it is necessary first to

consider (1) the provisions and requirements of the Insur-

NGG CEN RS GE EMTS LEO AIL

15

ance Code of May 17, 1921, and (2) the constitutional

requirement of due process, i.e., notice of a hearing and an

opportunity to be heard.” (R. +)

As heretofore shown, the decision of the Pennsylvanic Supreme

Court is sufficient to confer jurisdiction upon the Supreme Court

of the United States. It is worthy of comment, however, that it

was the very failure to give adequate notice and a full hearing,

now complained of, which prevented appellants or anyone in

their behalf from appealing the decree of June 26, 1947 within

the period of three months permitted by Pennsylvania practice,

(2) Was the Federal Question Properly Raised and

Preserved in the State Courts?

The issues raised in this section of the Motion to Dismiss have

been discussed in an earlier portion of this brief. Decisions of

this Court were cited which hold that where the federal question

is considered and decided adversely to the plaintiff in error by

the Supreme Court of a State, and is necessary to its decision,

that is sufficient to give jurisdiction to the Supreme Court of the

United States and it is irrelevant to inquire how and when it was

raised in the court below. Those decisions also dispose of the

efforts of appellees to interpret statements made by counsel and

the judge in the trial court as limiting the issues which may now

be considered by this Court. It is significant to observe, however,

that the Court of Common Pleas itself did not consider the ques-

tion so limited and considered and denied the objections raised

under the due process provisions of the Federal and State Con-

stitutions. (R. 1735a-1739a)

The case of Texas & Pacific Railway Company v. Abilene

Cotton Oil Co., 204 U.S. 426, 434-435, 27 S. Ct. 350, 51 L. ed.

553, cited by appellees is one in which the highest appellate

court of a state, to which the writ of error was directed, in de-

ciding the case had expressly declared that the course of the

argument and briefs of cour sel before it confined the case to a

16

single issue. DeJonge v. Oregon, 229 U.S. 353, 358, 57 S. Ct.

255, 81 L. ed. 278 was a case in which there was a stipulation

of facts filed in the State Supreme Court after appeal to the

Supreme Court of the United States had been allowed.

The sufficiency of the Federal question which was raised by

appellants, and considered and decided by the Supreme Court

of Pennsylvania, to give this Court jurisdiction on appeal has

already been discussed.

Appellees contention that the intervention by the Matlack

Committee and that of appellants was not timely has been con-

sidered and decided adversely to appellees by the Pennsylvania

Supreme Court.

Comm. ex rel Chidsey v. Keystone Mutual Casualty Co.,

366 Pa. 149.

(3) Is There a Present Case or Controversy?

In this section of their Motion to Dismiss appellees again

advance an argument which should have been advanced in the

State courts. They cite no facts which were not before the Su-

preme Court of Pennsylvania and that Court did not refuse te

consider the appeal nor did it predicate its decision upon the

basis that the question was moot. Appellees’ argument here again

assumes the validity of the decree of June 26, 1947, and further

assumes that the burden of proving the solvency of the Company

on the petition to vacate the decree was properly cast. If so much

of the decree as provided for the dissolution of the company, the

vacation of its charter, and the liquidation of its affairs was

void, as is here contended, because entered without the notice

and hearing required by due process, the burden of proof would

be on the Commonwealth if a liquidation proceeding were

brought under Section 506 of the Pennsylvania Insurance De-

partment Act. In

SF uew ets oe rer |

baliat jas

yates ABS ily

FR NM PAM In BR BOT Me

Ne a I Pe ee a eS ee

17

Lancaster and Mintzer’s Appeal, 111 Pa. 524, 533

the Supreme Court of Pennsylvania, in reversing a refusal to

vacate a decree which had been entered without due notice,

rejected the theory of the Court below which placed upon the

petitioner the burden of disproving the facts which the decree

sought to adjudicate. It said:

“Where an order, decree, or judgment has been wrongfully

entered without notice to a party who was entitled to notice,

such party may demand its vacation, at least to the extent

that it affects his interest. His right is that he be heard

before the judge or court decides, not that there may be an

ex parte hearing and adjudication, after which he may, if

he can, show that the adjudication unjustly affects him.”

The “doubts” the Insurance Commissioner who initiated the

petition to vacate the decree on the theory of solvency of the

company expressed to the Supreme Court of Pennsylvania in

his answer to a petition for supersedeas that a rehabilitation of

the company could now be consummated contradicts both his

petition and his brief in the Court of Common Pleas and cannot

constitute the basis for a decision on the question of rehabilita-

tion which was not involved in the case and concerning which

the company is entitled to a hearing upon application duly made

under the statute. Section 505, Pennsylvania Insurance Depart-

ment Act of May 17, 1921, as amended, 40 P.S. 205.

(4) Is a Substantial Federal Question Presented?

Appellees correctly state in this section of their Motion to

Dismiss that Sections 502 through 506 of the Pennsylvania In-

surance Department Act of May 17, 1921, are related steps of

an integral whole governing the manner of handling an insur-

ance company when its business can no longer be conducted

safely with due regard for the public interest. Appellants’ con-

tentions, however, do not depend upon a “strained construction,”

but are based upon the unadorned language of the statute.

18

Section 502 provides that whenever an insurance company is

insolvent or in any other specified manner or for any other

specified reason has become unstable or unsound

““* * * the Insurance Commissioner shall communicate the

facts to the Attorney General, who shall, after hearing

apply to the court of common pleas of Dauphin County

* * * for an order directing such company * * * to show

cause why its business should not be closed, and the Insur-

ance Commissioner should not take possession of its prop-

erty and conduct its business, and for such other relief as

the nature of the case and the interests of its policyholders,

creditors, stockholders, or the public may require.”

Section 504 provides the manner of giving notice.

Section 505 provides with respect to a show cause order, that

“On the return of such order to show cause, and after full

hearing before the court * * * the court shall either deny

the application or direct the Insurance Commissioner forth-

with to take possession of the property and conduct the

business of such company * * * and retain such possession

and conduct such business until, on the application either

of the commissioner, through the Attorney General, or of

such company * * * it shall after a like hearing, appear

to the court that the ground for such order directing the

Insurance Commissioner to take possession has been re-

moved, and that the company * * * can properly resume

possession of its property and the conduct of its business.”

Section 506 provides that

“If on a like application and order to show cause, and after

a full hearing, the court shall order the liquidation of the

business of such company * * * such liquidation shall be

made by and under the direction of the Insurance Com-

missioner * * *”

Several conclusions are irresistible from a mere reading of

the statute.

There must be a hearing before application by the Attorney

Pot er

cs eee

Ere +

BLEED. THROUGH POOR COPY

19

General to the Court, regardless of the relief requested which,

of course, should be consistent with the nature of the facts estab.

lished at the hearing.

There must be a “full hearing” on the rule to show cause why

a possession order should not issue.

After possession is taken, if the Insurance Commissioner is

not to engage in the permanent operation of the business, two

outcomes are possible. The company may be rehabilitated under

the provisions of Section 505 or it may be liquidated under the

provisions of Section 506. In either event an application and

hearing is required. Section 506 specifies an order to show

cause and a full hearing before an order of liquidation.

The rules to show cause required by the separate sections 505

and 506 of the Act must give notice of the objectives set forth

in their respective sections.

If “such other relief” referred to in Section 502 includes

liquidation, then Section 506 which specifically provides for

liquidation and requires “a like application and order to show

cause, and * * * a full hearing” must be followed and notice of

liquidation must be given.

Appellees say that this is not the censtruction placed upon

these sections by the Pennsylvania courts. It is the enactment of

the General Assembly of Pennsylvania wi.ich is sufficiently

clear to require no construction, and which had nwt been rejected

by the Supreme Court of Pennsylvania until it eld in this case

that the decree of June 26, 1947 neither violated these “techni-

cal requirements” of the statute nor deprived appellants of

due process of law.

The Motion to Dismiss cites no other cases in which the Su-

preme Court of Pennsylvania, or this Court, have approved a

different construction of the statutes. In the cited quotation

from Penn General Casualty Co. v. Commonwealth of Pennsyl-

20

pania, 294 U.S. 189, 55 S. Ct. 186, 79 L. ed. 850, where the

question of the construction of the statute was not in issue, the

Court was merely undertaking to show the authority of the state

court to proceed with the cause in the absence of jurisdiction

having been obtained by a district court. In that case a hearing

was had before the Insurance Commissioner on September 14,

1933. A further hearing was held before the Attorney General

on October 14, 1933. The suggestion praying for the liquidation

of the company was filed in the Court of Common Pleas on

December 8, 1933. The order to show cause was served on De-

cember 11, 1933. The Court entered its decree liquidating the

company March 14, 1934. The company had ample notice and

opportunity to defend.

The hearing before the Attorney General under Section

502 of the statute, which may lead to a possession order and

subsequent rehabilitation, is not the order to show cause and full

hearing required by Section 506 before an order of liquidation

is entered and by which specific notice of liquidation must be

given. A company may readily consent to the former which

would never consent to the latter.

The necessity, under the circumstances which were knuwn hy

the court and by counsel for the Insurance Department to exist,

of affording some sort of notice which would have protected the

policyholders as a class, has already been discussed i the

Statement of Jurisdiction.

Appellees next contend in this section of the Motion to Dis:iiss

that the company was not entitled to the hearing before the filing

of the report of examination provided by Section 213 of the Act

nor to the notice of impairment of reserves and an opportunity

to repair them provided by Section 321 because these sections

do not relate to insolvent companies; that in such cases, Sec-

tions 502-506 control.

In making this contention appellees, by construction, have

21

read limitations into these sections of the Act which have not

been placed there by the carefully considered language of the

Pennsylvania General Assembly or by the Courts. Obviously a

company should be permitted every opportunity afforded by the

statute to challenge a report of examination which purports to

find it insolvent because its very existence is then threatened.

Obviously, also, such a report may hinder but does not preclude

a repair of the impairment to its reserves. It is evident that

Sections 213 and 321 were not intended to deal only with factual

situations not covered by Section 502 when it is reflected that

in almost any instance where it is found that there is an impair.

ment of 20% in the capital or reserves which the Common-

wealth deemed were necessary to insure the safety of the public,

a finding would also be authorized that the further transaction

of business would be hazardous to the policyholders, creditors,

or the public within the meaning of Section 502.

The only construction of the statute which is significant here

is that which has been adopted by the Supreme Court of Pennsyl-

vania in this case. This Court is not required to indulge in

statutory construction in order to determine and protect appel-

lants’ rights under the due process provision of the Federal Con-

stitution. Those rights would exist, and would have been vio-

lated by the manner of liquidation of the company under the

statute regardless of whether any provision of the statute re-

quired prior notice and hearing. Cf National Auto Corp. v.

Barfod, 289 Pa. 307. These requirements of the statute, which

the Supreme Court of Pennsylvania held were not circumvented,

merely serve to underscore and emphasize the violation by the

Commonwealth of appellants’ constitutional rights.

(5) Does the Decision Rest Ur=x Non-Federal Grounds

Which Independently Support the Judgment?

The first three non-Federal grounds which appellees claim in-

dependently and: adequately support the judgment are: (a) peti-

tioner did not carry the burden of proving the solvency of the

company at June 26, 1947, as alleged in the petition to vacate;

(b) the company was in a precarious financial condition on

June 26, 1947, its officers having admitted its insolvency, that

its affairs were mismanaged, its records manipulated and its

financial condition fraudulently misrepresented; and, (c) the

company was insolvent as of the date of the filing of the petition

to vacate. Each of these grounds assumes the validity of the

decree of June 26, 1947, and, accordingly, that the burden of

proof was properly cast on the petitioner in the hearings on the

yetition to vacate the decree. If the decree of dissolution was

nvalid, as contended by appellants, because they were deprived

d constitutional rights, the burden would be on the Common-

vealth in a new proceeding for liquidation, at a full hearing

alorded after adequate notice, to establish one or more of the

sututory causes for the liquidation of the company. Accord-

imly, as no one of these grounds can be supported unless the

Federal question is determined in favor of the validity of the

limidation decree of June 26, 1947, so no one of them can

inependently and adequately support the judgment of the

Swreme Court of Pennsylvania.

1 is only where the non-Federal ground does not depend upon

thedecision of any Federal question, and is broad enough to

susain the judgment, that the Supreme Court has no power to

disurb it.

Enterprise Irrigation District v. Farmers Mutual Canal

Company, 243 U.S. 157, 164, 37 S. Ct. 318, 61 L. ed. 644,

and citations;

Postal Telegraph-Cable Company v. City of Newport, 247

U.S. 464, 475, 38 S. Ct. 566, 62 L. ed. 1215.

Te Supreme Court of the United States has jurisdiction to

reiew a decision of a state court based upon a Federal and a

na-Federal ground where the non-Federal ground is so inter-

ee ae ee

woven with the other as not to be an independent matter, or js

not of sufficient breadth to sustain the judgment without any

decision on the other.

Abie State Bank v. Bryan, 282 U.S. 765, 773, 51 S. Ct. 252,

75 L. ed. 690.

Enterprise Irrigation District vy. Farmers Mutual Canal

Company, 243 U.S. 157, 164, 37 S. Ct. 318, 61 L. ed. 644,

Appellees next contend that the finding by the Supreme Court

of Pennsylvania that the officers and directors waived all of the

requirements of notice under the Insurance Code was a non.

Federal ground which independently and adequately supported

the judgment.

It is the duty of the Federal Supreme Court to review and

correct the error of a state court in resting its decision denying

asserted Federal rights upon a basis of fact which has no sup.

port in the record.

Postal Telegraph-Cable Company v. City of Newport, 247

U.S. 464, 473, 38 S. Ct. 566, 62 L. ed. 1215.

The limited authority of the officers and directors under the

law of Pennsylvania, the limited scope of the resolutions

adopted by the directors, and the limited relief to which the

attorney consented has already been pointed out in the State-

ment of Jurisdiction and in the discussion of facts in this brief.

It is significant also that the very language of the decree entered

on July 26, 1947 assumes a consent “to possession” but no-

where, by its specific terms, recognizes or assumes any agree-

ment to the prayers or to all the averments of the Suggestion or

any consent, on behalf of the company, that it be dissolved or

liquidated. (R. 195la) There was no such consent. This finding

has no factual support in the record and, if it had occurred,

could not bind the company or its members under the law of

Pennsylvania. It is without substance.

Appellees next contend that the case was decided by the lower

court upon issues of fact involving non-Federal grounds and

concludes that this Court is bound by such findings of fact of

the State Court. In inquiring whether the State Court rested its

decision upon independent non-Federal grounds adequate to

support the judgment, the Supreme Court of the United States

is unconcerned with the conclusions of the trial court, or with

those of an intermediate appellate court, and considers only the

action of the Supreme Court of the State from which the appeal

s taken.

Allen v. Southern Pacific Railroad Company, 173 U.S.

479, 489, 19 S. Ct. 518, 43 L. ed. 775.

It is the judgment of the Supreme Court of Pennsylvania

which is sought to be reviewed here; not that of the lower court.

Tle State Supreme Court specifically passed upon the Federal

question and decided it against the contentions of Appellants.

Apellees cannot reach down to the lower court in their frantic

seach for substantial non-Federal grounds. Any specific issues

of fict, involving non-Federal grounds, which independently and

adequately supported the judgment in the State Supreme Court

appealed from should be pointed out by appellees.

Ir subdivision (e) it is contended that the notice and hearing

provisions of the Insurance Code, as construed by the Pennsy]l-

vania Courts, relate only to solvency, and as the findings of fact

estallish the insolvency of the company, no one has been harmed

by leck of notice or of opportunity to be heard.

Itis no answer to one who protests against the taking of his

property without due process of law that due process of law

would have led to the same result.

Coe v. Armour Fertilizer W orks, 237 U.S. 314, 424, 35 S.

Ct. 625, 59 L. ed. 1027.

Certainly Appellees cannot and do not clajm that the company

wasnot hurt by a finding, at the hearing of which it was denied

BLEED. THROUGH POOR COPY

0 eae ga — |

FRET OTE oe

adequate notice, of one of the very charges against which it was

not permitted the time or opportunity to defend. Accordingly,

we must assume that this contention has reference to the findings

of the Court of Common Pleas on the petition to vacate the

decree. These findings were based upon the assumption of the

validity of the decvee of June 26, 1947, which the Court held to

impose upon the Commonwealth the burden of establishing by

“clear and satisfactory” evidence that the company was solvent

on the date of dissolution and that this burden was not carried.

(R. 1725a, 1726a) Thus again, this contention is dependent

upon the decision of the Federal question. However, it should

also be noted that neither the Supreme Court of Pennsylvania in

this case nor any other authority cited by appellees has held in

express terms nor in language which may readily be so inter.

preted that the notice and hearing provisions of the Insurance

Code relate only to the issue of solvency. Such a construction

would certainly be at variance with the unambiguous words of

the statute. But it would also, unquestionably, give this Court

jurisdiction on appeal in a case where the company was denied

adequate notice and a full hearing on several vague and general

charges which included not only its solvency but also misman-

agement, the writing of hazardous business, maintaining inade-

quate records, falsifying an annual report and issuing cash or

nonassessable policies beyond the date when it was possessed of

the surplus required by law. (R. 1760a) The question then

would involve not only the proper construction of a state statute,

as suggested by appellees, but also whether the statute as con-

strued to require notice and a full hearing only on the charge

of insolvency and not on the other charges would be repugnant

to the due process provision of the Federal Constitution.

Standard Oil Company of California v. Johnson, 316 U.S.

481, 482, 62 S. Ct. 1168, 86 L. ed. 1611.

Ward & Gow v. Krinsky, 259 U.S. 503, 510, 42 St. Ct. 529,

66 L. ed. 1033.

Pr eee ree eee efi

Finally, in subsection (f{) of their Motion to Dismiss appellees

contend ‘hat the Court did not uphold the validity of the decree

against an attack on federal grounds but discussed “due proc-

ess” generally. This question has been sufficiently answered in

an earlier part of this brief and it is deemed unnecessary to

repeat the language of that decision specifically so deciding.

IV. Conclusion

In Gelpcke v. City of Dubuque, 68 U.S. (1 Wall.) 175, 206,

17 L. ed. 520, this Court said:

“We shall never immolate truth, jrstice, and the law, be-

cause a state tribunal has erected the altar and decreed the

sacrifice.”

The requirements of Section 213 of the Pennsylvania Insur-

ance Department Act that the Insurance Commissioner grant the

company a hearing before a report of examination is filed;

those of Section 321 that he give the company sixty days notice

to make good an impairment of twenty per centum in the com-

pany’s reserves; and those of Section 506 that an order to show

cause issue 1 a full hearing be granted before the court de-

crees the li — tion of the company were intended to provide

the company | its members with adequate notice of any

charges which | ht result in the liquidation of the company,

and an opportunity to be heard concerning them. If the charges

are contained in or based upon a report of examination, addi-

tional notice and hearing are provided. These provisions are

effective, however, and will afford the protection required by

due process only if they are obligatory upon the Insurance

Commissioner and upon the Commonwealth.

In this case the protection which the plain language of those

sections appears to require was not afforded to the company or

to appellants. The charges were not made specific and were

etd ee

Soe Eaves otal BN 8

27

based upon a report of examination which was not completed

until June 24, 1947 and was not shown to the company until

June 25, 1947, at which time the dissolution of the company

was first suggested. On the following morning its dissolution

was decreed. Thus, the blindfold was »:moved barely in time

for the company to see, but not to resist, the coup de’ grace.

When the Supreme Court of Pennsylvania held that these

“technical requirements” of the Insurance Code had not been

violated, or had been waived, it unquestionably vested jurisdic.

tion by way of appeal in this Court because it construed the

Act and found it valid as so construed and applied. It also

erected the altar and decreed the sacrifice when it found a waiver

which the facts and the law abundantly demonstrate did not and

could not exist. Appellants respectfully submit that this Court

has jurisdiction on appeal and that the Motion to Dismiss should

be denied.

Exvuis G. ARNALL

CLEBURNE E. Grecory, Jr.

ARNALL, GoLpEN & GREGORY

621 First National Bank Bldg.

Atlanta, Georgia

Water M. NEwMAN

Wacker & NEWMAN

1100 Jones Law Bldg.

Pittsburgh, Pennsylvania

Attorneys for Appellants.