Simpson v. M-P Enterprises, Inc., M-P

• Decision Date: 28 June 1971
• Docket Number: M-P,No. 46081,46081
• Citation: 252 So.2d 202
• Parties: Glynne A. SIMPSON et al. v.ENTERPRISES, INC.
• Court: Mississippi Supreme Court

Page 202

252 So.2d 202

Glynne A. SIMPSON et al. v. M-P ENTERPRISES, INC.

No. 46081.

Supreme Court of Mississippi.

June 28, 1971.

Rehearing Denied Sept. 14, 1971.

Young, Young & Scanlon, Butler, Snow, O'Mara, Stevens & Cannada, W. Scott Welch, III, Roger C. Landrum, Sullivan, Sullivan & Keyes, Jackson, for appellants.

Watkins & Eager, Elizabeth Hulen, Hassell H. Whitworth, Jackson, for appellee.

INZER, Justice.

This is an appeal by Glynne A. Simpson, Jesse H. Bardin, Aaron B. Dupuy, Jr., Harold W. Busching and Dupuy-Busching General Agency, Inc., from a decree of the Chancery Court of the First Judicial District of Hinds County awarding appellee, M-P Enterprises, inc., a joint and several judgment against the appellants for the sum of $13,733. The decree also awarded appellee a judgment against Simpson and Bardin, doing business as Bardin-Simpson Insurance Agency, for $729.83 representing unearned surplus line tax refund and a credit balance on an open account. The decree further awarded appellant, Jesse H. Bardin, as cross-complainant, individually a judgment for $3,249.84 against appellee M-P Enterprises, Inc., cross defendant for the balance due on a promissory note assigned to Bardin by Deposit Guaranty National Bank. A cross bill by Bardin against Harold W. Busching, Aaron B. Dupuy, Jr. and Dupuy-Busching General Agency, Inc., was dismissed with prejudice.

M-P Enterprises, hereinafter referred to as M-P, is a Mississippi corporation engaging in the business of manufacturing pylofoam and cotton felt at its plant in Houston, Mississippi. It carried $658,000 insurance on its buildings and contents. In March 1967 some of the companies carrying a part of its insurance cancelled their coverage. M-P contacted Glynne A. Simpson, referred to as Simpson, a partner with Jesse H. Bardin, referred to as Bardin, doing business as Bardin-Simpson Insurance Agency, referred to as Bardin-Simpson, to secure coverage it needed to replace the cancelled insurance. Bardin-Simpson agreed that they would secure the coverage, but they felt that they needed assistance and on their own accord contacted Aaron B. Dupuy, Jr., referred to as Dupuy, and Harold W. Busching, referred to as Busching, owners and operators of Dupuy-Busching General Agency, Inc., and referred to as Dupuy-Busching, to assist them in placing the coverage. Simpson informed M-P of this fact and this action was acquiesced in by M-P, since it was relying on Simpson to secure the necessary coverage. Dupuy-Busching was able to place the M-P insurance risk through several different companies. However, in August the companies carrying eight percent of the coverage cancelled.

Being unable to place the coverage through admitted companies qualified to do business in Mississippi, Dupuy and Busching went to Chicago where they contacted Whitcomb & Associates, insurance brokers, hereinafter referred to as Whitcomb. They dealt with a representative of that agency named Bedrosian. By September 27, 1967, M-P was notified that the necessary coverage had been secured with $460,000 of the coverage purportedly placed with Fidelity General Insurance Agency effective September 22, 1967.

A policy was issued by Fidelity General Insurance Company on the application of Whitcomb. It was dated October 4, 1967, in the amount of $29,400 with the effective date of September 29, 1967, to September 29, 1968, by an endorsement the amount of the coverage was increased to $32,900. Attached to the policy when received sometime later were two other endorsements purportedly issued by Fidelity, one of which amended the effective date of the policy to September 22, 1967, instead of September 29. The other increased the coverage by $427,700, making a new total of $460,600. These two endorsements were signed 'Charles A. White' by a person whose initials appeared to be 'T.B.'

After M-P was notified that the necessary coverage had been secured and that $460,600 was purportedly placed with Fidelity General Insurance Company, it immediately arranged to and did pay the premium for the full coverage. It borrowed $24,276.26 from the Deposit Guaranty National Bank and executed a promissory note for that amount. The note was payable in eight monthly installments of $3,155.92. Bardin-Simpson executed as a part of this transaction an insurance agency guarantee wherein they warranted that the policies listed on the note were valid and in full force and effect. They also guaranteed that if any representation relative to the policies listed was inaccurate or incorrect that they would pay the balance due on the note. They further agreed with the bank that any returned unearned premiums due M-P on the policies would be paid to the bank. Bardin-Simpson received the proceeds of this note, together with a check from M-P in the amount of $8,092.08, Making a premium payment of $32,368.34. From this amount Bardin-Simpson deducted its ten percent commission and forwarded the balance to Dupuy-Busching. Dupuy-Busching sent Whitcomb $5,000 on October 2, 1967, but retained the balance of the premium until in December 1967. At that time M-P was notified by Whitcomb that unless the balance of the premium was immediately received that M-P's insurance would be cancelled. M-P, believing that unless Dupuy-Busching forwarded the balance of the premium to Whitcomb its insurance would be cancelled, insisted that Dupuy-Busching remit the balance of the premium. Dupuy-Busching then paid Whitcomb $14,041.90 and gave Whitcomb credit on its books for the balance due Dupuy-Busching on a separate transaction.

On September 27, 1967, M-P suffered a fire loss which was adjusted by Church Adjustment Company of Tupelo at the request of Dupuy-Busching. When Church reported the loss to Fidelity it notified Dupuy-Busching that the loss was not covered by its policy for the reason that it occurred prior to the effective date of the policy and that its coverage was limited to $32,900. Also, it advised Dupuy-Busching that its policy was being cancelled effective December 1, 1967. Dupuy-Busching did not advise M-P of the contents of this letter and on November 29, Dupuy-Busching received a telegram purportedly sent by Fidelity to disregard the notice of cancellation. On December 30, 1967, Whitcomb sent M-P a check for $5,717.25 which according to letter of transmittal was 42 percent of the $13,612.50 due M-P as a result of the September 27, 1967, loss. On January 26, 1968, M-P received a check from Whitcomb for $1,497.37 as payment on the loss. On March 5, 1968, M-P received another check from Whitcomb for $680.62, and finally on March 18, 1968, M-P received a check from Whitcomb for $5,717.26 representing the balance due as a result of the loss.

On April 11, 1968, M-P, having secured insurance through another agent in other companies, sent Whitcomb notice to reduce its coverage by thirty percent and thus became entitled to a return premium of $2,902. Thereafter on June 21, 1968, it cancelled the balance of its coverage that it had secured through Bardin-Simpson and then became entitled to an additional return premium of $5,182, making a total of $8,084 which has not been paid.

When the final installment of the note to the bank became due, M-P refused to pay it and notified the bank that it was entitled to the returned premium from Bardin-Simpson which was more than enough to cover the payment. The bank told M-P to ignore its demands that they would require Bardin-Simpson to pay on the guarantee. Bardin then paid the balance on the note, and the bank assigned the note to him. He then filed suit against M-P in the county court of Hinds County seeking a judgment on the note.

In the meantime M-P not having received the premium refund, requested its attorney to collect the premium. The attorney in his investigation discovered that the endorsements changing the effective date of the insurance and the endorsement increasing the amount of the insurance were not executed by an authorized agent of Fidelity Insurance Company. M-P then filed this suit in the chancery court against the appellants seeking a discovery and an accounting. It alleged by virtue of the unauthorized endorsements its increased coverage never became effective and that it was entitled to a return of the premium for the increased coverage in the amount of $24,569.05, for which it prayed for a monetary judgment.

Bardin-Simpson had dissolved its partnership in the latter part of 1968, and Simpson at the time the suit was filed was working for Dupuy-Busching. Bardin filed a separte answer and a cross bill. In his answer he denied that he was liable to M-P for any amount and by a cross bill he sought to recover the balance due on the note assigned to him by the bank, together with interest and attorney's fee. It having been agreed between M-P and Bardin that the suit in county court would be dismissed and the matter settled in one suit. Bardin also sought to recover by a cross bill from M-P the sum of $1,637.09, alleged to be due it by M-P on an open account. By agreement of the parties Bardin filed a cross bill against Dupuy-Busching and...