Georgia Home Insurance v. Holmes

Woods, C. J., delivered the opinion of the court. There are two serious questions presented by this appeal, and 1hey are as follows: 1. Was this action begun within one year after the loss by fire of the assured property occurred? 2. AVas the policy avoided by the anti-mortgage clause contained therein? We consider them in the order named. The loss is shown to have occurred on the 30th day of November, 1894, and the declaration was filed on October 8, 1895, and summons issued for the Georgia Home Insurance Company immediately, to Scott county, returnable to the next term of the court. This process was not executed, as it appears, because no agent of the company was to be found in that county. In June, 1896, a substituted declaration w-as filed, the original, as well as the original policy of insurance sued on, having been lost, as is shown by the affidavit of appellee’s counsel, and alias summons for the Georgia Home Insurance Company, and Ross and Yer-ger, agents, was then sent to Hinds county, and returned executed on Ross and Yerger, agents, August 3, 1896. On the 3d of August, 1896, an alias summons was sent to Lauderdale county, for the Georgia Home Insiuance Company, and this summons was returned August 10, executed on I. I. Solomon, agent for the Georgia Home Insurance Company. The company, by its counsel, appeared in court on Septem [400] ber 21, 1896, and filed many pleas, and on March. 15, 1897, the company’s counsel withdrew its fifth plea, and filed, by leave, what is called the substituted fifth plea. This substituted fifth plea it is which raises the question of the limitation, of the one year provision as to bringing suit. By this substituted fifth plea, it is averred that the declaration named no defendant, failed to show that the defendant was a foreign insurance company, and did not state the names of the agents of this foreign company who were authorized to accept service of process. In a word, the plea avers an absence from the declaration of -the facts necessary to confer jurisdiction upon the court in which it was filed, and sets up, also, the facts as to the summons already stated by us, and the further fact that when appellee’s counsel were informed by the sheriff of Scott county that no agent of the company was in that county, they directed that officer to do nothing further with the writ until be should hear from them, and that nothing further was done with the writ. Was it essential that the declaration and summons should have shown that the defendant was a foreign corporation, and that certain named persons were its designated agents to receive service of process? In Continental Insurance Company v. Mansfield, 45 Miss., 311, this question appears to have been answered affirmatively. Certainly it is held in that case that the declaration must show these so-called jurisdictional facts, and it is said that it would have been well if the summons had followed the declaration in these particulars. We are not quite sure what the opinion of the court was. If it holds, as counsel for appellant in the case now before us thinks it does, that the declaration was no declaration, and that the summons was void, then the judgment in that case was most singular, for by it the suit is treated as a pending one, and ‘leave given the plaintiff to apply for liberty to amend.” How could he amend a pleading which was a nullity? And how amend a summons which was Anoid? [401] But, regarding the court as holding in that case that, the declaration and summons must allege that the defendant is a foreign insurance company, and that certain named persons are the duly authorized agents of the company to receive service of summons, ve feel constrained to declare the holding erroneous. It rests upon what seems to us a total misconception of the nature of the act which it was attempting to construe. The act was not one of pleading or practice. Its manifest object, its sole object, was to prescribe the terms and conditions upon which foreign insurance companies would be permitted to enter this state, and do business with our people, and all our rules of pleading and practice were left wholly unaffected by it. We refer to' the case to condemn it, simply that it may not mislead further. In addition, in the case before us, the original policy, which was filed with the declaration as part of it, and which is expressly made so by our statute, secs. 676, 677, code of 1892, plainly discloses on its face, that the defendant herein is a foreign corporation, to wit: a corporation under the laws of the state of Georgia. Then, too, by section 3438, code of 1892, and the amendatory act of February 2, 1894, it is now distinctly provided that in suits against insurance companies, process may be served on any agent of the defendant. This provision as to seawice of process on insurance companies was not contained in the code of 1857, which was in force when Continental Ins. Co. v. Mansfield arose and was decided. We see no reason for believing that the first summons to'Scott county was not issued in good faith, and, under the views already announced, we are of opinion that the suit was instituted within one year after the loss occurred. 2. Was the policy avoided by the anti-mortgage clause contained therein? The evidence shows that the appellee sent to the company’s agent who issued the policy, requesting him to send a blank [402] form of application for insurance, and also. to send a man to inspect the lionise on which, the insurance was desired. The .company’s agent did neither, saying, in effect, that he knew the condition of the property. It now appears that this agent was mistaken in two important particulars. He made out a policy, without any written application having been made, or, indeed, any application other than that contained in what we have just stated, and sent it to Holmes. This agent, vdio. kneiv about the property, made out the policy for a single story house, when, in fact, it was a two-story building, and he thought the property was free :irom incumbrance, perhaps, when, in fact, it was incumbered by a trust deed of record for $150. The first policy, which misdescribed the house, was replaced by another, correctly describing it, the policy sent appellee (who never read it until after the loss occurred, and who was in ignorance of the anti-mortgage clause until his attention was called to it by the company's agent when a settlement of the loss was sought), and the premium paid and accepted. This is a case, then, in which no application — no formal application — was made, because the agent held it unnecessary, inasmuch as he knew about the condition of the property, and a case in which appellee did not know there was any anti-mortgage clause contained in the policy until after the loss, and the. question is, whether the company shall now he permitted to repudiate its contract made, not upon any misrepresentations, or even representations, of the insured, but upon its own knowledge of the condition of the property. If tins policy was issued upon the knowledge of the company as to the condition of the property, and after refusal to furnish the usual blank application-, whereby ihe insured would have apprised the insurer of the true con diiion of the property, and not upon any representation of the insured, then the anti-mortgage clause must be held to have teen waived. Any other view would involve the holding by us of this proposition: that the insurance company, waiving [403] any application by tbe person desiring insurance and issuing a policy upon its awn knowledge of tbe condition of tbe property, may receive tbe premiums paid far tbe indemnity, and defeat a recovery for a loss sustained by inserting in tbe policy a pro-idsion invalidating tbe contract from the moment it was signed and delivered, thus inducing tbe insured to rest upon a contract which tbe company never intended to carry out. This cannot be sound law. Affirmed.