Norwich Union Fire Ins. Co. v. Standard Drug Co.

• Decision Date: 15 April 1918
• Docket Number: 20053
• Court: Mississippi Supreme Court
• Parties: NORWICH UNION FIRE INSURANCE COMPANY v. STANDARD DRUG COMPANY

78 So. 353

117 Miss. 429

NORWICH UNION FIRE INSURANCE COMPANY v. STANDARD DRUG COMPANY

No. 20053

Supreme Court of Mississippi

April 15, 1918

Division B

APPEAL from the chancery court of Lauderdale county, HON. G. C TANN, Chancellor.

Suit by the Standard Drug Company against the Norwich Fire Insurance Company. From a judgment for plaintiff, defendant appeals.

The facts are fully stated in the opinion of the court.

Affirmed and remanded.

McLaurin & Arminstead, for appellant.

Amis &amp Dunn, for appellee.

OPINION

STEVENS, J.

Appellee, Standard Drug Company, sued in equity to recover from appellant one thousand five hundred dollars, statutory penalties under section 500, Code of 1906, and chapter 250, Acts of 1912, section 3289, Hemingway's Code; and also to recover back certain alleged overcharges on premiums exacted by appellant on three fire insurance policies. A demurrer was interposed to the original bill, the demurrer confessed, and thereafter the bill was amended. To the bill as amended the defendant interposed three demurrers. It is conceded that one of these demurrers is a general demurrer charging in substance that there is no equity on the face of the bill; that the complainant has a clear, adequate, and complete remedy at law; and that the chancery court has no jurisdiction of the subject-matter of this suit. The other two demurrers are termed by appellant as special demurrers. A statement of the grounds of one of these alleged special demurrers will illustrate the general character of each demurrer. The grounds of one of these so-called special demurrers are as follows:

"(1) Because the penalties demanded in the bill of five hundred dollars each, totaling one thousand five hundred dollars, on policies Nos. 6560370, dated January 5, 1913, 718960, dated January 5, 1914, and 7189947, dated January 5, 1914, are barred by the one year's statute of limitations, section 3101 of the Code of 1906.

"(2) Because the attempt to avoid the effect of the statute of limitations, section 3101 of the Code of 1906, by a charge of concealed fraud, is not sufficient, because the date of the discovery of the alleged fraud is not sufficiently shown.

"(3) Because the amended bill does not show when or how the fraud was discovered; that is, the allegations in reference to fraud are not sufficiently clear and distinct.

"(4) Because the averments charging a failure to discover the fraud charged in said bill, whereby complainant seeks to avoid the effect of section 3101 of the Code of 1906, do not show due diligence on the part of the complainant.

"(5) Because the character of the fraud charged is such that it must necessarily have been discovered more than a year before this suit was filed if complainant had used any diligence whatever in connection with ascertaining the reasonableness of his rates, if they were unreasonable, when he took out said policies of insurance.

"(6) Because the bill does not set up or show any relation of trust or confidence between the defendant, the party charged with the fraud, and the party affected by it, the complainant, which rendered it the duty of the defendant to disclose to complainant any particular information as to the cost of insurance, nor does it show any positive act of fraudulent representation or concealment done directly toward the complainant.

"(7) Because the fraud alleged, if it constitutes an exception, would only be an exception from the time it could have been discovered by due diligence, and the bill does not negative the idea that due diligence would not have discovered it sooner.

"(8) The amended bill as to the penalties under section 5007 sets up a new cause of action, and it does not show on its face that the fraud complained of was discovered within a year before the amended bill was filed.

"(9) Because the amended bill does not show that more than a year did not elapse between the date of the discovery of the fraud and the date of filing the amended bill.

"(10) Because the statute on trusts and combines, section 5007 of the Code of 1906, and the amendments thereto, do not authorize a recovery by an individual suffering loss from a combine of the insurance companies to maintain rates.

"(11) Because the statute authorizing a recovery by an individual for any injury or damage as the result of a trust or combine only authorizes a recovery where the party complaining 'has been compelled to pay more for any commodity, or to accept less for any commodity, or to pay more for any service rendered by any corporation exercising a public franchise by reason of the unlawful act or agreement of the defendant trust, its officers, agents or attorneys, than he would have been compelled to give or accept, but for such unlawful act or agreement'; and that this statute gives no right of action to the complainant in this suit.

"(12) Because insurance is neither a commodity nor a service rendered by a corporation exercising a public franchise.

"(13) Because, even if the bill of complaint herein states a cause of action against this defendant, complainant would only have a right to recover the actual damages, if any, proven, plus five hundred dollars, and not the actual damages and five hundred dollars, for each overcharge, as is sought to be recovered here.

"(14) And for other causes to be assigned on the hearing."

In addition to the three demurrers, appellant, as defendant in the court below, filed an answer. Presumably, this answer of the defendant was filed for the purpose of denying the fraud charged in the amended bill, but the answer in fact denies practically all of the material allegation of the bill. The bill as amended charges that during the time from January 5, 1911, to January 5, 1915, the defendant and all other fire insurance companies doing business in Mississippi committed to the Mississippi Advisory Rating Company at Vicksburg the right and power to fix premium rates to be charged by all fire insurance companies in this state that this Advisory Rating Company did fix the premium rates; that all insurance companies abided by the rates fixed by the rating company; that these premium rates were unreasonable, exorbitant, and oppressive; that the rate as fixed was one dollar and twenty cents per hundred, which rate the complainant was required to pay on three policies listed in an exhibit to the bill; that a reasonable rate would have been forty cents per hundred; that there was no competition between the insurance companies on rates, and the result of the agreement of the said companies was to prevent competition; that the complainant has been actually damaged in the sum of one hundred and six dollars and fifty cents overcharges, which amount complainant is entitled to sue for and recover back; that the defendant has violated the statutes of Mississippi, especially chapter 250, Laws of 1912, and section 5007, Code of 1906, and complainant is entitled to recover five hundred dollars penalty for each of the unlawful acts complained of;...