Dependable Ins. Co. v. Gibbs

• Decision Date: 18 September 1962
• Docket Number: No. 21730,21730
• Citation: 127 S.E.2d 454,218 Ga. 305
• Parties: DEPENDABLE INSURANCE CO., Inc. v. James F. GIBBS.
• Court: Georgia Supreme Court

Page 454

127 S.E.2d 454

218 Ga. 305

DEPENDABLE INSURANCE CO., Inc. v. James F. GIBBS.

No. 21730.

Supreme Court of Georgia.

Sept. 18, 1962.

Rehearing Denied Oct. 1, 1962.

Syllabus by the Court

1. Ga.L.1960, p. 500 (Code § 56-1201(4)) is not unconstitutional as violative of Art. VI, Sec. XIV, Par. VI of the Constitution because that constitutional provision contains no restriction as to where a defendant shall reside but rather merely declares that in whatever county a defendant may reside, there shall he be sued unless the case falls within one of the exceptions contained in Paragraphs I through V of Art. VI, Sec. XIV.

2. The statutory provision under attack does not deny due process of law in violation of Art. I, Sec. I, Par. III of the Constitution (Code § 2-103).

3. The act's classification of insurance companies does not violate Art. I, Sec. I, Par. II of the Constitution (Code § 2-102).

4. The attack under Art. I, Sec. III, Par. II of the Constitution (Code § 2-302) not having been argued by counsel for plaintiff in error in his brief or orally before this court is treated as abandoned.

5. The general grounds of the motion for new trial are considered as abandoned.

6. The letters constituting plaintiff's exhibits 'F-1' through 'F-6' are not inadmissible as being admissions or propositions made with a view to a compromise.

7. The trial court charged the proper measure of damages.

8. There being a reasonable ground for the insurer to contest the claim, there is no bad faith, and it was error for the trial court to charge the jury relative to bad faith penalties and attorney's fees.

The insured, a resident of Turner County, filed his petition seeking to recover damages for the alleged breach of an automobile collision insurance contract against the insurer, a Florida corporation with an agent and office in Albany, Dougherty County, in the Superior Court of Turner County, alleging that the insurer was a resident of Turner County within the meaning of Ga.L.1960, p. 500 (Code § 56-1201(4)). The insurer filed its plea to the jurisdiction of the Superior Court of Turner County on the ground that the act of the General Assembly in question was violative of the Georgia Constitution in several particulars which are hereinafter set out. To the overruling of its plea to the jurisdiction the defendant has excepted and has assigned the same as error. After the overruling of defendant's plea, the case proceeded to verdict and judgment for plaintiff. Defendant moved for a new trial on the general and several special grounds. To the denial of its amended motion for a new trial defendant has excepted and has assigned the same as error. All the aforesaid exceptions are presented in the present writ of error.

D. C. Campbell, Jr., H. G. Rawls, Albany, for plaintiff in error.

John R. Rogers, Ashburn, for defendant in error.

MOBLEY, Justice.

1. Ga.L.1960, p. 500 (Code § 56-1201) provides as follows: 'Except for actions arising against unauthorized insurers or under surplus line contracts which are provided for in Chapter 56-6, whenever any person shall have a claim or demand on any insurer, such person may institute suit in any of the following places: * * * (4) In any county where the property covered by an insurance contract upon which an action is brought is located or where the person entitled to the proceeds of an insurance contract upon which action is brought maintains his legal residence. For the purpose of this subsection personal property shall be deemed to be located in the county of the legal residence of the owner thereof, and for the purpose of bringing suit under this subsection a company which has written a contract of insurance upon persons or property located in a particular county, or which has become surety for the performance of an obligation in a particular county shall be deemed to be transacting business in such county and shall be deemed to be a legal resident of such county; Provided further, that any action or suit on the bond of a sheriff, or other arresting or law enforcement officer, upon which any guaranty or surety company or fidelity insurance company is bound and obligated as surety, shall be instituted in the county of the residence of such officer, and not in any other county; and the county of the residence of such officer is hereby fixed as the venue of any action or suit on such bond; and such officer may be made a party defendant or may by intervention become a party defendant.'

Because this case is not one of the types enumerated in Paragraphs I through V of Art. VI, Sec. XIV of the Constitution (Code §§ 2-4901 through 2-4905), it must according to Paragraph VI of that article and section (Code § 2-4906) be tried 'in the county where the defendant resides.' Plaintiff's allegations as to the jurisdiction of the Superior Court of Turner County over defendant are based solely on Ga.L.1960, p. 500 (Code § 56-1201(4)), those allegations being that the suit was brought on an insurance policy covering personal property located in Turner County; that plaintiff is the person entitled to the proceeds of the insurance policy; that plaintiff on the date of the making of the contract, and on the date of the alleged breach was, and on the date of the suit is, a legal resident of Turner County; that therefore the defendant is a legal resident of Georgia and of Turner County within the meaning of § 56-1201(4). Defendant in its plea to the jurisdiction alleges that it is a corporation, that it has no agent, office or place of business in Turner County, and that therefore it cannot reside in Turner County within the meaning of Georgia Constitution Art. VI, Sec. XIV, Par. VI (Code § 2-4906).

Thus the issue presented is whether or not the General Assembly may constitutionally provide that a corporation engaged in business as an insurer is for the purpose of the venue of suits of this type a legal resident within the meaning of Art. VI, Sec. XIV, Par. VI of the Constitution (Code § 2-4906) of the county in which the property covered by the insurance contract upon which action is brought is located, or in the county where the person entitled to the proceeds of an insurance contract upon which action is brought maintains his legal residence.

The Constitution Art. VI, § XIV, Par. VI (Code § 2-4906) applies to corporations as well as to natural persons and therefore a corporation must be sued in the county of its residence unless the case comes within one of the exceptions set out in the Constitution. Central Bank of Ga. v. Gibson, 11 Ga. 453(2); McCall v. Central of Ga. Ry., 120 Ga. 602, 604, 48 S.E. 157; Northern Contracting Co. v. Maddux, 144 Ga. 686(1), 87 S.E. 892; Lloyd Adams, Inc. v. Liberty Mutual Ins. Co., 190 Ga. 633, 637, 10 S.E.2d 46; Benton Rapid Express v. Johnson, 202 Ga. 597, 598, 43 S.E.2d 667. Numerous cases have held that the General Assembly has the power to declare the residence of corporations. Davis v. Central R. & Bkg. Co., 17 Ga. 323, 336; Georgia R. & Bkg. Co. v. Oaks, 52 Ga. 410(2); Merritt v. Cotton States Life Ins. Co., 55 Ga. 103(2); Savannah F. & W. R. Co v. Atkinson, 94 Ga. 780, 783, 21 S.E. 1010; Gilbert v. Georgia R. & Banking Co., 104 Ga. 412, 416, 30 S.E. 673; McCall v. Central of Ga. Ry., 120 Ga. 602, 604, 48 S.E. 157; Jefferson Fire Ins. Co. v. Brackin, 140 Ga. 637, 79 S.E. 467; Central Ga. Power Co. v. Stubbs, 141 Ga. 172, 181, 80 S.E. 636; Citizens & Sou. Bank v. Taggart, 164 Ga. 351, 356, 138 S.E. 898; Martin & Thompson v. Allen, 188 Ga. 42, 44, 2 S.E.2d 668; Speed Oil Co. v. Aycock, 188 Ga. 46(1), 2 S.E.2d 666. Some of these cases just cited are, we think, particularly significant.

In Gilbert v. Georgia R. & Banking Co., supra, the act of 1892 (now Code § 94-1101) was challenged as violative of the venue in county of residence provision of the Constitution of 1877 (now Art. VI, Sec. XIV, Par. VI of the Constitution of 1945; Code § 2-4906) in that by permitting a tort suit to be brought against a railroad in the county where the cause of action originated without regard to whether or not the railroad had an office, agent or place of business in the county it allowed a railroad to be sued in a county other than the county of its residence. That act provided that: 'All railroad companies shall be sued in the county in which the cause of action originated by any one whose person or property has been injured by such railroad company * * * and also on all contracts made or to be performed in the county where the suit is brought.' The court held the act constitutional, relying on Davis v. Central R. & Banking Co., supra, and reasoning as follows: 'It was there held [in the Davis case] that the act of the general assembly which permitted railroad companies to be sued in counties other than the county in which the principal office of the company was located was constitutional and valid, the ground upon which the decision was based being that the general assembly had a right to declare what was the residence of all persons, both natural and artificial. If the general assembly could declare that a railroad company resided in every county through which its lines of road run, it was undoubtedly within its power to declare also that suits against railroad companies should be brought in the counties where the cause of action in each case arose. The constitutional provision simply prescribes that the suits must be brought in the county of the defendant's residence, and the whole subject of domicile and residence of persons, both natural and artificial, is left to be determined by the general assembly.'

In Central Georgia Power Co. v. Stubbs, 141 Ga. 172, 80 S.E. 636, a tort action was brought against an electric power company under Ga.L.1912, p. 68, § 4 (now Code § 94-1101). Citing the Davis and Gilbert cases, supra, the court held the statute constitutional as against a challenge under the residence provision of the Constitution of 1877 (now Constitution...