Phenix Ins. Co. v. Dorsey

• Decision Date: 17 June 1912
• Docket Number: 15,238
• Court: Mississippi Supreme Court
• Parties: PHENIX INSURANCE COMPANY v. A. I. DORSEY ET AL

58 So. 778

102 Miss. 81

PHENIX INSURANCE COMPANY v. A. I. DORSEY ET AL

No. 15,238

Supreme Court of Mississippi

June 17, 1912

APPEAL from the chancery court of Tunica county, HON. M. E. DENTON Chancellor.

Suit by A. I. Dorsey et al. against the Phenix Insurance Company. From a judgment for plaintiffs, defendant appeals.

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

Reversed and remanded.

J. W Cutrer, for appellant.

Fontaine & Fontaine and Flowers, Alexander & Whitfield, for appellee.

Counsel for both sides filed elaborate briefs too long for publication.

OPINION

COOK, J.

There are many singular features about this case, and, in order tat the conclusions reached by us may be appreciated at their full value, a brief recital of the facts leading up to the litigation and a short history of the long drawn out litigation is deemed important.

In the month of September, 1902, the appellee, J. G. Smith, a resident of Pontotoc, Miss., established a general mercantile business in Sunflower county, Miss., placing the management of his business there in the hands of his brother, A. D Smith. This business was continued until some time in June, 1903, when it is alleged that the storehouse and merchandise stored therein were destroyed by fire. In August, 1903, the general officers of the Phenix Insurance Company received a notice from Mr. Smith, stating that he held policy No. 33429 issued by the company covering said stock of goods, valued at five thousand dollars, and the house, valued at three hundred dollars. The insurance company, upon investigation, found that their agent, A. I. Dorsey, located at Tunica, Miss., reported policy No. 33429 as having been issued by him to cover his own personal effects, valued at two hundred and fifty dollars, and situated at Tunica. It was also developed that Dorsey had reported to the insurance company that he had written policy No. , insuring the same property described by the policy claimed to be held by Smith, and bearing about the same date.

The records of the insurance company showed that the last-named policy had been promptly canceled by the insurance company upon receipt of Dorsey's report, and the policy had been returned to the company. It afterwards developed that Smith did have in his possession policy No. 33429, and it did cover the property alleged to have been burned. The company, after making further investigations, denied all liability under this policy, and, on the 2d day of October, 1903, filed in the chancery court of Tunica county its bill of complaint against Smith and Dorsey, charging a conspiracy between them to defraud the company, and praying that the policy be canceled as fraudulent and void.

Smith filed his answer to this bill on November 20, 1903, denying all the allegations of the bill. Depositions of witnesses for both parties were taken August 24, 1904, at which time the case of appellee was outlined and developed. Smith was present, but did not give his deposition, and did not testify at all until March 31, 1910. The case moved along until April 23, 1907, when Smith obtained leave to make his answer a cross-bill, praying for a decree against the insurance company for the amount covered by the policy. What we wish to emphasize is that the answer of Smith was not made a cross-bill, and no affirmative relief was asked by Smith, until four years after the fire and alleged loss, and that he did not testify in his own behalf until March 31, 1910, nearly seven years after the beginning of this litigation.

Many other anomalous circumstances were developed in the case, but it is unnecessary to mention them all. Smith's answer and cross-bill prayed for a reformation of the policy because of a mutual mistake in the location of the property upon which the risk was assumed. The policy produced by Smith bears no date. It purports to cover the property from November 9, 1902, to November 9, 1903, and it thus appears that Smith's property was insured for thirty days prior to the time he applied for insurance, according to his own testimony. The policy located the property in one place, whereas, in fact, the property was located in an entirely different place. Smith testifies that his brother filled out a written application for this policy and brought it from Pentecost to Pontotoc for his inspection and approval, and that this application correctly described the location and ownership of the property; that he, in person, mailed the application to Dorsey, the agent, and Dorsey, in writing the policy, made a mistake in the location and ownership of the property to be insured; that Dorsey insured his property for one month before the application for insurance was mailed to him. This application for insurance was never seen by any officer of the insurance company, and it disappears from view after Smith mailed it to Dorsey.

It develops later that Smith had never been to Pentecost until after the fire and had never seen the house insured, and while he does say that Dorsey delivered the policy about the 6th of March, 1903, yet it fully appears that he received this information from his brother, if at all. In fact, Smith knew nothing of value to this controversy, except what his brother is alleged to have told him, and we think it is clear from Smith's own deposition that he never saw the policy of insurance until after the fire.

Among other matters in controversy is the alleged failure of Smith to pay the premium on the policy, and while, ordinarily, this may not be important, if Dorsey is to be treated as the general agent of the insurance company, yet it must be borne in mind that the original bill was filed to cancel this policy because of an alleged combination and conspiracy between the agent of the company and the assured to defraud the...