Lumbermen's Underwriting Alliance v. First Nat. Bank & Trust Co.

• Decision Date: 25 September 1958
• Docket Number: No. 37310,No. 2,37310,2
• Citation: 105 S.E.2d 585,98 Ga.App. 289
• Parties: LUMBERMEN'S UNDERWRITING ALLIANCE v. FIRST NATIONAL BANK & TRUST COMPANY, etc
• Court: Georgia Court of Appeals

Page 585

105 S.E.2d 585

98 Ga.App. 289

LUMBERMEN'S UNDERWRITING ALLIANCE v. FIRST NATIONAL BANK & TRUST COMPANY, etc.

No. 37310.

Court of Appeals of Georgia, Division No. 2.

Sept. 25, 1958.

Rehearing Denied Oct. 7, 1958.

Syllabus by the Court.

The court properly overruled the demurrers to the petition.

First National Bank & Trust Company of Macon, Georgia, filed a petition against Lumbermen's Underwriting Alliance. The petition, filed March 25, 1958, will be set out substantially hereinafter. On April 25, 1958 the defendant demurred to the petition and filed an answer. This answer was amended on May 9, 1958. The plaintiff amended the petition on May 12, 1958, in response to the demurrers. The defendant then renewed its demurrers on May 23, 1958. On June 6, 1958 the plaintiff filed a second amendment. The Judge of the Superior Court of Laurens County overruled all the demurrers on June 6, 1958. It is on this order overruling the demurrers that the case is here for review. The petition reads: 'The petition of the First National Bank & Trust Company in Macon, a national banking association with its principal office in Macon, Bibb County, Georgia, against Lumbermen's Underwriting Alliance, respectfully shows: 1. Lumbermen's Underwriting Alliance, hereinafter referred to as defendant, is an unincorporated reciprocal insurance exchange, organized under an existing by virtue of the laws of the State of Missouri, composed of numerous individuals, firms and corporations residing in various states of the United States, and some of them residing in the State of Georgia. Defendant is engaged in the business in the State of Georgia of issuing policies of fire insurance, and was so engaged on all of the dates hereinafter mentioned.

'2. On July 29, 1957, defendant, through its attorney in fact, U. S. Epperson Underwriting Company, issued to W. L. Jessup, Jr., d/b/a Brooks-Jessup Lumber Company, its policy of fire insurance number 41911 in the total amount of $66,500 covering certain specific buildings and machinery designated therein, which said policy was endorsed on August 19, 1957, to increase the amount thereof to $68,500.

'3. There was attached to and made a part of the aforesaid policy of insurance a mortgagee clause endorsement making the loss or damage, if any, under said policy, payable to plaintiff, First National Bank & Trust Company in Macon, as interest may appear, subject to the provisions of the mortgagee clause appearing on the back thereof.

'4. A copy of the material parts of the aforesaid policy of insurance, including the schedule of buildings and machinery designated therein, and including the material parts of the aforesaid mortgagee clause endorsement, is attached hereto as Exhibit A, and by reference made a part hereof.

'5. At the time said policy insurance was issued, and at all times thereafter, plaintiff was and still is the holder of an indebtedness secured by the buildings and machinery scheduled in said policy of insurance, and insured thereunder, in an amount exceeding the amount of said insurance, and exceeding the amount of the loss under said policy hereinafter alleged.

'6. On or about September 4, 1957, a part of the property described in said policy of insurance was destroyed by fire, and thereafter, in due course, the insured, in accordance with the terms of said policy, gave timely notice of said loss, and on October 8, 1957, filed with the company sworn proofs of loss showing the amount of loss claimed to be due under said policy to be the sum of $16,100.

'7. Sixty days having expired after the filing of said proofs of loss, and payment thereof not having been made, the insured made formal demand upon the defendant for payment of said loss, and thereafter on the 12th day of December, 1957, plaintiff, as mortgagee as aforesaid, made demand for payment to it of the full amount of the loss under said policy.

'8. Defendant has failed for more than sixty days after demand to make payment to plaintiff of the loss under said policy, and such failure is in bad faith within the provisions of Georgia Code Section 56-706.

'9. Plaintiff has complied with all of the terms and conditions of said policy of insurance pertaining to defendant's liability thereunder to plaintiff, and defendant is liable and indebted to plaintiff under said policy in the principal amount of $16,100, plus an amount equal to interest thereon at the rate of 7% from December 12, 1957, and by reason of defendant's failure in bad faith to pay the amount of said loss within sixty days after demand defendant in further liable and indebted to plaintiff in the amount of twenty-five percent of said principal amount as damages, plus reasonable attorneys' fees in the amount of $3,000 for which amounts plaintiff prays the judgment of this court.

'10. Pursuant to statute, and applicable regulations, defendant has designated a process agent upon whom service of the petition and process in this case may be made, to wit, Mr. Smythe Gambrell, who resides in and may be served in Fulton County, Georgia.

'11. At the time of the issuance of the aforesaid policy, and at the time of the loss thereunder, defendant had an agent in Laurens County, Georgia and the Superior Court of Laurens County has jurisdiction of this complaint.

'12. The aforesaid sworn proof of loss filed by the insured, and the demand in writing made by the insured more than sixty days after the filing of said proof of loss are both in the possession of the defendant, and the defendant is notified to have and produce the same in the Superior Court of Laurens County upon the trial of this case to be used as evidence for the plaintiff.'

The defendant demurred, through its attorney in fact, U. S. Epperson Underwriting Company, filing general and special demurrers as follows: '1. The defendant demurs generally to the petition in that the petition shows that this court has no jurisdiction of this action.

'2. Defendant demurs generally to the petition in that the petition sets out no cause of action against this defendant.

'3. Defendant demurs generally to said petition in that the petition shows that this defendant is not a legal entity.

'4. Defendant demurs specially to the petition in that the petition shows that the defendant is a legal nullity composed of a voluntary association of subscribers who are individuals, partnerships and corporations, some of whom are citizens of the State of Georgia; that said subscribers are the real parties at interest; and that said subscribers who are citizens of Georgia are necessary and indispensable parties to this action.

'5. Defendant demurs specially to the petition in that the petition shows that the defendant is a legal nullity, being merely a nomen collectivum for a group of subscribers contracting to act as insurers each of the others only by and through an attorney in fact, U. S. Epperson Underwriting Company, which company is a real party at interest and is a necessary and indispensable party to this action.

'6. Defendant demurs specially to said petition in that the petition shows that W. L. Jessup, Jr., of Eastman, Dodge County, Georgia, is the real party at interest and is a necessary and indispensable party to this action.

'7. Defendant demurs specially to paragraph 7 of the petition for indefiniteness and uncertainty and calls upon petitioner to allege in what manner any demand was made by petitioner of payment of this claim, where such demand was made, by whom and to whom such demand was made.

'8. Defendant demurs specially to paragraph 8 of the petition as pleaded in that the same is highly prejudicial, immaterial, irrelevant and a conclusion of the petitioner unsupported by any allegation of fact in said paragraph or elsewhere in the petition. Defendant also demurs specially to paragraph 8 for uncertainty and calls upon petitioner to quote Georgia Code Section 56-706 as said Code section has no application to the issues in this action.

'9. Defendant demurs specially to paragraph 9 of the petition for indefiniteness and uncertainty and calls upon the petitioner to itemize the claim of $16,100 showing the buildings and machinery which it is claiming were destroyed by fire, petitioner's claimed value therefor in order that defendant can determine how and in what manner petitioner arrives at such loss figure. Defendant also demurs specially to all that portion of paragraph 9 following the numerals '1957' as being immaterial, irrelevant, highly prejudicial and a conclusion of the petitioner unsupported by any allegation of fact in said paragraph or elsewhere in the petition and defendant moves that such portion of this paragraph be stricken.

'Wherefore, for these and other causes of demurrer appearing in the petition and in exhibits attached, defendant demurs to said petition and requests the judgment of this court whether defendant shall be called upon to make any further or other answer to the petition; and prays to be dismissed with costs incurred charged to petitioner.'

On the same day the defendant filed an answer as follows: 'Now comes the defendant, Lumberman's Underwriting Alliance, by and through its attorney in fact, U. S. Epperson Underwriting Company, and, specifically reserving its defense by reason of the lack of jurisdiction of this court, and without waiving any and all other defenses raised by defendant in its demurrer, and without waiving any other legal defense which it has to this action, files this its answer to the above-stated petition.

'1. The defendant admits paragraphs 1, 2, 3, 4, 5, 6, 10, 11 and 12 of the petition.

'2. Defendant denies paragraphs 7, 8 and 9 of the petition as pleaded.

'3. For further plea and answer defendant states that no separate demand has been made upon it for payment of this claim by the petitioner until the filing of this action.

'4. Said claim was presented by the assured, W. L. Jessup, Jr., in conjunction with his claim under policy No....