Georgia Home Insurance v. Holmes

1. Pleading and PBACTrcis. Foreign corporation. It is not essential that a declaration against, and summons for, a foreig-n corporation, should show that a certain named person was its agent to receive service of process. Continental Ins. Co. v. Mansfield, 45 Miss., 311, condemned. 2. Same. Insurance. Foreign companies. Code 1857, art. 57, pp. 303, 304. The sole object of art. 57, pp. 303, 304, code of 1857, was to prescribe terms upon which foreign insurance companies would be permitted to do business in this state, and the rules of pleading and practice were unaffected by it. Continental Ins. Co. v. Mansfield, 45 Miss., 311, condemned. 3. Same. ' Writing filed with declaration. Code 1892, 2 676; Ih., 2 677. Under code of 1892, 22 676, 677, every writing filed with any pleading, as a part of it, thereby becomes a part of the pleading for all purposes of the action. 4. Same. Code 1892, \ 3433. Under the provisions of code 1892, | 3433, in suits against insurance companies, process may be served on any agent of defendant. A like statute was not in force when Continental Ins. Co. v. Mansfield, 45 Miss., 311, arose and was decided. 5. Pibe Instjbance. Policy issued on insxwer's knowledge without representations by insured. Anti-mortgage clause. Waiver. A fire insurance policy, issued by an insurance company on its own knowledge of the condition of the property, without representations by the insured, cannot be avoided because of a condition therein against existing incumbrances, even if there were a mortgage on the property at the time of the issuance of the policy, the insured being unaware of the anti-mortg-age clause in the policy until after loss. In such case, the insurer waived the anti-mortgage clause of the policy.

From the circuit court of Scott county. Hon. A. G. Mayers, Judge. This was an action upon a fire insurance policy. The plaintiff, David B. Holmes, recovered judgment in the circuit court, and the defendant, the insurance company, appealed to the supreme court. The facts upon which the controverted questions arose are stated in the opinion of the court. 1. The condition limiting the period for bringing suits to twelve months is valid. Ohio v. Ins. Go., 65 Miss., 532. The courts of this state have no original jurisdiction of the persons of foreign insurance corporations; and the manner of acquiring jurisdiction of their persons, in suits in personam, is purely statutory. The code of 1892 provides the only mode for acquiring such jurisdiction, and this is by service on an agent, coupled with the consent or agreement that service on the agent shall be accepted as service of process on the company. It was held, in Continental Ins. Co. v. Mansfield, 45 Miss., 311, that a declaration which did not aver that the insurance company was a foreign corporation, and that it had an agent for the service of process in this state, giving his name, did not aver the necessary jurisdictional facts. The same legislation is repeated, after this interpretation, in the codes of 1880 and 1892. Therefore, the declaration, as filed, did not contain sufficient aver-ments to give the courts jurisdiction of this defendant. If the court has no jurisdiction of the suit commenced within the twelve months, it does not stop the running of this contractual bar. Riddlebarger v. Ins. Co., 7 Wall., 386; McIntyre v. Ins. Co., 52 Mich., 188. A writ issued without authority of law, as this original summons necessarily was, would be void and unamendable. Smith v. Mixon, 73 Miss., 581. The declaration named, legally, no defendant, and the summons could only issue according to the declaration, and, therefore, it could legally name no defendant. The summons must command the officer “to summon the defendant to appear,” etc. Code 1892, § 3414. “There must be an effort to conform to the law, to entitle to the claim of mere irregularity in process. ’ ’ Joinerv. Delta Bank, 71 Miss., 385. Where the process is void, and, on appeal, the cause is. reversed, for that reason the defendant will be held in court to plead. Ib. The venue of this suit could be the county of Scott, where the loss occurred (code 1892, § 652), but in such case “process may be sent to any county to be served as directed by law. ’ ’ lb. The process here could have' been served -if it named the company’s agent in Hinds or Lauderdale counties, as under the act of 1894, p. 50, and code of 1892, § 2323, service could be had on the agents of the company. But this was not done. ‘ ‘ The Georgia Home Insurance Company, a corporation doing business in this state, ’ ’ was the defendant named, and it was sued as if a local corporation. The Georgia corporation of that name was not sued, nor was the name of an agent given in the declaration or summons to Scott county. The sheriff could not create a defendant to the writ by serving it on some one believed by him to be an agent; his beliefs cannot supplant the statute. The writ must be one authorized by law to be issued, and with the purpose, in good faith, of its execution. Seavy v. Bennett, 64 Miss., 737; Jackson v. Scanland, 65 Miss., 487. A suit requires a plaintiff and a defendant, and § 670, code 1892, requires that summons shall be immediately issued for the defendant, in order that a suit may be commenced. Here there was certainly no summons issued for the defendant within the twelve months prescribed by the policy. 2. The plea alleged the mortgage condition, and the existence of the mortgage, without consent. If the replication is analyzed, we find defendant seeking .to make an application in writing for the purpose of disclosing the incum-brances, and averring ignorance that there was any condition against incumbrances. If plaintiff was ignorant of the incumbrance clause, and, therefore, it was not a matter material to the issuance of the policy, so far as he was concerned, whether there were incumbrances or not, it is difficult to perceive how the company could be said to have caused plaintiff to omit to do that which he did not intend to do. "Where it appears that the insured was not misled, all idea of waiver is excluded. That insured claims to have been misled, signified little, and is not the criterion by which to determine the question, which is, was what occurred and is relied on as a waiver, sufficient to lead the average man into the belief that he was relieved from the obligation to do more than he did ? McPike v. Assurance Go., 61 Miss., 37. Doubtless in every case of failure to make proof, or do anything required of him after a loss, the insured might truly claim to be misled, but he may have misled himself or neglected to do what he should from considerations quite independent of anything said by the insurer or its agents. . . . Waiver which rests upon the idea of estoppel cannot be predicated of mere performance of duty or exercise of right,” etc. N. 0. Ins. Asso. v. Matthews, 65 Miss., 313, 314. “All of the following elements must be present in order to an estoppel by conduct: (1) There must have been a representation or concealment of material facts; (2) the representation must have been made with knowledge of the facts; (3) the party to whom it was made must have been ignorant of the truth of the matter; (4) it must have been made with the intention that the other party should act upon it; (5) the other party must have been induced to act upon it. And in this summary all the authorities concur.” Tnrnipseed v. Hudson, 50 Miss., 436. Knowledge of the property and knowledge of the legal title to the property are very different things. Knowledge of the property would be necessary in order to describe it in the policy, rate it properly, etc., but to know all about property does not mean knowledge of incumbrances on it. 1. The point made by appellant’s attorneys, predicated of the -manner of the institution of the suit, the issuance and service of process, and defendant’s appearance, seems to ns to be wholly without merit. It ignores the difference between the questions which are presented by a record of a judgment by default, and one showing a judgment, after the appearance of the defendant, on the merits of the case. The matters discussed on the first assignment of errors are as irrelevant to the real controversy, it seems to us, as would be a brief on the regularity of the service of the summons in a case where defendant had appeared and pleaded to the action. We say it with all due respect, but the logic of appellant’s contention leads to the absurd conclusion that the Georgia Home Insurance Company sued itself. It is not denied that it was sued; it is admitted that a suit was pending against it when it filed its pleas; but the effort is to maintain that everything done by the plaintiff, before the pleas were filed, was absolutely void, and had no legal effect whatever. Section 670, code of 1892, provides "... an action shall, for all purposes, be considered to be commenced and to be pending from the time of the filing of the declaration, if a summons shall be issued thereon for the defendant.” The circuit court of Scott county had jurisdiction of the subject-matter of the suit; the declaration was properly filed there; a summons was regularly issued; if the sheriff had found an agent of the defendant, even casually passing through the county, and the writ ha¡d been served on him, the proceedings would have been above criticism. See §§ 3433 and 652, code of 1892, the one section authorizing suits against insurance companies wherever a loss occurs, and the other the service of summons on any agent. It follows that the suit was instituted in good faith, and rightfully, in Scott county, and the good faith of the issuance of the first summons is not negatived by the plea, as it would have to be certainly before merit can be reasonably claimed for it. In reference to: the case cited, Continental Insurance Company v. Mansfield, 45 Miss., 311, by appellant’s attorneys, we Imre to say that the matter before the court there was the ■validity of a judgment by default; here there was an appearance; and at the time of that decision, the code of 1857 was the law of the case, and it contained no such statutes as §§ 3433 and 652, code 1892. It seems to us perfectly idle to say that the declaration, after the defendant appeared and pleaded to it, was defective for want of an averment that appellant was a foreign corporation. Such an averment, if process had been served under the statute found in code of 1857, might be of consequence to maintain a judgment by default, but not if a defendant appeared; and we do not hesitate to advance the Hew that under our present statutes such an averment would be unnecessary, even to maintain a default judgment. Kelly r. Harrison, 69 Miss., 856, is conclusive, we think, against appellant, as to when the suit was begun. Mere irregularities in the summons did not prevent the suit from being begun; the writ was perfectly regular. There is a substantial difference between the commencement of an action, and its being a pending suit between the parties; the first has reference only to the act of the plaintiff, but the second has reference, also, to the position of the defendant. Allen v. Mandaville, 26 Miss., 397. 2. The next point to be considered arises on the decision of the court below overruling appellant’s demurrer to the replication to the third plea. The third plea set up the existence of a deed of trust on the insured house; the replication, stripped of all extraneous matter, in short, is: Plaintiff asked the insurance company for a blank application, that he might formally apply for the policy; the insurance company responded, “You need make no other application; we know all about, the property,” and thereupon executed the policy. The plaintiff did not know of the anti-mortgage clause until after the fire; supposed he had valid insurance, and paid the premiums on the faith, thereof. Can the insurance company repudiate the con-iract? We think not. One thing is certain, if the policy sued on is void because of the anti-mortgage clause, under the facts of this case, then it was never in force at all, never from the beginning had any validity whatever. If this be so, then the insurance company negotiated with plaintiff for insurance, pro-, i'essing to know all about the property, waived any communication from Holmes on the subject, pretended to insure him, and received the premium, but delivered him a policy which was void -the instant it was issued, and the appellant assumed no liability whatever; delivered a policy which in no- manner effected the purpose which appellant pretended and led Holmes to believe it would effect, and by such pretenses obtained Holmes’ money. If appellant’s contention be correct, only one condition of the policy was ever in force, and that was the felo de se clause, providing that, inasmuch as a part of the property, which appellant intended to- insure, was mortgaged — a fact which existed but had not been made a condition of the- agreement as negotiated — -the policy was entirely void. If this interpretation is the proper one to be upheld by the court, its result is that Holmes negotiated for insurance on his property, making no false statements concerning it; the appellant undertook and assumed to place the risk upon it for a valuable consideration, and received Holmes’ money for a paper which provided that he had no insurance — a result not according to the negotiations —because no inquiry -was made as to a mortgage, and no- mention was made that the company would not take a risk on mortgaged property. To construe this policy as void would be to impute turpitude to the conduct of appellant; it would be assuming that appellant attempted to, and did, obtain Holmes’ money under unscrupulous- business methods, if not by false pretenses. It must be assumed that the provisions of the policy were known io appellant, and in this case they were, according to the replication, unknown to Holmes; and the only way in which it is pretended that the insurance company made known its provisions to Holmes was by delivering to him a void policy. If the policy is void for one purpose, it is void for all purposes; if it was not valid insurance when delivered, it can have no effect to charge notice on Holmes, and appellant’s position is contradictory. It insists that the policy was good enough to charge Holmes with notice and to procure his money, but is utterly invalid to bind the company in any way. Appellant’s attempted construction implies a scheme to obtain the premiums, and issue no. insurance, and on the one hand, if no loss occurred, the premiums would be acquired without the assumption of risk; if, on the other hand, a loss occurred, the policy would be repudiated and liability escaped, but the premiums pocketed all the same. Of course, the scheme further involved the misleading of Holmes into the belief that he had insurance when he had none. Such cannot be the true construction. The appellant, by writing the insurance without inquiry as to mortgages thereon, consented to take the risk, with the mortgage on the property, as effectually as if consent thereto had been a part of the policy. Hut it is said by opposing counsel that the declaration of the insurance agent, that “we know all about the property,” cannot refer to the state of the title. To this we answer, it makes no difference what the agent had in mind when he used the expression, because he stated also, at least his act in sending the policy demonstrated, that no other application was necessary, and he thereby fully waived all communications from Holmes about the property. But it is untrue that the words, “We know all about the property,” when used in reference to insurance, do not relate to the state of the title. The property is never insured; it is simply the subject of insurance,' and the owner, or contracting person, is insured; he is insured or indemnified against loss. When, therefore, an insurance company professes to know all about the property, its professions relate to an' insurance contract, and they do cover the question of the quantum of interest which the party proposed to be insured has in the property. The following authorities maintain our position: Wright v. Fire Insurance Co., 12 Mont., 474, s.c. 31 Pae. Rep., 87; Philadelphia Tool Co. v. British. Am. Assurance Co., 132 Penn. St., 236, s.c. 19 Am. St. Rep., 596; German Mutual Ins. Co. v. Niewedde, 11 Ind. App. Ct. Rep., 624, s.c. 39 N. E. Rep., 534; Mascotte'Y. First Nat. Fire Ins. Co. (Vt.), 37 All. <Rep., 255; Monotoe Ins. Co. v. Rodifer, 92 Va., 747, s.c. 24 S. E. Rep., 393; Ins. Co. of N. A. v. Bachler, 62 N. W. Rep., 912, s.c. 44 Neb., 549; Hanover, etc., Co. v. Bohn, 67 N. W. Rep., 774. Wood, in his work on Fire Insurance, sec. 162, p. 310, tells us: “When a policy is issued upon a verbal application, without any representations in reference thereto, all information relative to the risk, except such as is unusual and extraordinary, is waived."’ Certainly a mortgage on real estate is not unusual or extraordinary. Many other authorities might be cited. Mr. Freeman’s syllabus to Western & Atlantic Pipe Lines v. Homes Insurance Co., 27 Am. St. Rep., 703, announces: “Where an insurance policy is issued without any application or written request describing the interest of the insured in the property, and it.does not appear that any actual representations of any kind were made by the assured, it will be presumed that the policy u as written Upon the knowledge of the insurer, and intended to cover, in good faith, the interest of the assured in the property,” and this, too-, is a case -where the insurer did not say, “We know all about the property;” and a case in perfect analogy is Loril-larcl Fire Ins. Co. v. McCulloch, 21 Ohio St., 176, s.c. 8 Am. Rep., 52, a case where, in a written application, some of the inquiries were left unanswered, in which it was held that the issuance of the policy without answer to the questions was a waiver, etc. We think, too, the last paragraph of the opinion of this court, delivered by one of our respected opposing counsel, as special judge, in the ease of Am. Fire Ins. Oo. v. First Fat. Bank, 73 Miss., 469, is a very pertinent authority for appellee. We cite, also, on the subject of waiver of the anti-mortgage clause in this case, Liverpool & London c& Gloie Ins. Go. v. Sheffy, '71 Miss., 919.