Hartford Fire Ins. Co. v. Producer's Gin of Hernando, Inc.

• Decision Date: 24 February 1976
• Docket Number: No. 48501,48501
• Citation: 326 So.2d 807
• Parties: HARTFORD FIRE INSURANCE COMPANY et al. v. PRODUCER'S GIN OF HERNANDO, INC.
• Court: Mississippi Supreme Court

Page 807

326 So.2d 807

HARTFORD FIRE INSURANCE COMPANY et al. v. PRODUCER'S GIN OF HERNANDO, INC.

No. 48501.

Supreme Court of Mississippi.

Feb. 24, 1976.

Watkins & Eager, James L. Carroll, Jackson, for appellants.

Walker, Franks, Rone, Bridgforth & Woods, Hernando, for appellees.

Before PATTERSON, ROBERTSON and BROOM, JJ.

BROOM, Justice:

Producer's Gin of Hernando, Inc., plaintiff (bailee), filed suit in the Circuit Court of DeSoto County to collect the market value of cotton destroyed by fire and insured under four policies of fire insurance issued by Hartford Fire Insurance Company, The Home Insurance Company, New Hampshire Insurance Company and United States Fidelity & Guaranty Company, defendants. Defendants appeal from a judgment awarding plaintiff the market value of the cotton as of the time of loss. We affirm.

Chief issues presented are: (1) Where is the venue of an action against a foreign insurance company when service of process is upon the company's resident agent for process? (2) May a bailee insure in his own name and record the whole loss of property of another in his possession? (3) Is the liability of defendants limited to the price at which bailors had contracted to sell insured property to third parties, or do the terms of the insurance policies involved govern as to the liability of defendants?

On October 3, 1973, plaintiff obtained four separate policies of fire insurance in its own name on baled cotton it held as a bailee for the growers (bailors) of the cotton. Each policy provided a maximum coverage of $12,500, required a premium of $198, and covered a period of two months. On October 29, 1973, thirty-one bales of the insured cotton were destroyed by fire at plaintiff's warehouse in DeSoto County. The market value of the cotton at the time of loss was 78.45 cents per pound. In January 1973, prior to issuance of the policies to plaintiff, the bailors of twenty-five of the thirty-one bales had contracted to sell their cotton to third parties for thirty cents per pound.

Plaintiff paid the bailors the market value of the cotton as of the time of loss and filed suit in the Circuit Court of DeSoto County against defendants, foreign insurance companies licensed to do business in Mississippi, to recover the market value of all of the cotton as of the date of loss. Process was served upon the resident agents of defendants, all of whom resided in and were served in Hinds County. Defendants filed their respective answers, alleging as a first defense that venue did not belong in DeSoto County. On the merits, defendants recognized plaintiff's right to recover for both its interests as a bailee (handling charges) and for the bailors' interests and they agreed to pay market value at the time of loss on the six 'uncontracted' bales. As for the remaining twenty-five bales of 'contracted' cotton, defendants contended that plaintiff, recovering for the bailors' interests, could recover no more than the price at which the bailors contracted to sell the cotton-thirty cents per pound.

Sitting without a jury, the Circuit Court held that venue was properly in DeSoto County and that the proper measure of damages was the market value or replacement value of the cotton at the time of the fire. By stipulation that value was fixed at 78.45 cents per pound. ¹

I.

Mississippi Code Annotated section 11-11-7 (1972), governing venue of suits against insurance companies, is divided into two parts. ² Except for changes in punctuation, the first part of section 11-11-7 has remained unchanged since it first appeared in the Revised Code of 1880. It provides:

Actions against insurance companies, groups of insurance companies or an insurance association may be brought in any county in which a loss may occur, or, if on a life policy, in the county in which the beneficiary resides, and process may be sent to any county, to be served as directed by law. Such actions may also be brought in the county where the principal place of business of such corporation or company may be. In case of a foreign corporation or company, such actions may be brought in the county where service of process may be had on an agent of such corporation or company . . ..

Under this part, if process is served on a foreign insurance company's resident agent for process the foreign insurance company may be sued in any one of three places: in the county where the loss occurred, in the county where the beneficiary resides, if on a life insurance policy, or in the county where the resident agent is served. In our jurisprudence, for venue purposes a foreign corporation designating a resident agent for process is treated no differently than a domestic corporation. Mississippi Code Annotated section 11-11-3 (1972); Sanford v. Dixie Constr. Co., 157 Miss. 626, 635, 128 So. 887 (1930).

Fireman's Fund Insurance Company v. Cole, 169 Miss. 634, 152 So. 872 (1934), and Thompson v. Commonwealth Life Insurance Company, 198 Miss. 515, 23 So.2d 539 (1945), relied upon by defendants, are unavailing to them. Fireman's Fund held that if process is served on the state insurance commissioner under the section part of section 11-11-7, venue is in the county where the loss occurred or the plaintiff resides. The Court specifically declined to say where venue lay when service of process was upon the resident agent of a foreign insurance company because the plaintiff in that case admitted that the recipient of process in the county where suit was filed was not an agent of the defendant. Thompson did not answer this question but did hold that a foreign insurance company could be sued in the county where its resident agent for process was served. ³

In our judgment the lower court correctly ruled that service of process upon the resident agents allowed venue to attach in the county where the loss occurred.

II.

The law is now well settled that when one has the custody, care or possession of property for another as bailee, he may, although he has no pecuniary interest therein and is not responsible for its safe keeping, insured it in his...