Summary
In Gibbes v. National Hospital Service, Inc., 202 S.C. 304, 24 S.E.2d 513 and Peeples v. Orkin ExterminatingCo., 244 S.C. 173, 135 S.E.2d 845, it was recognized that valid contract rights are property.
Summary of this case from Lott v. Claussens, Inc.Opinion
15509
February 23, 1943.
Before E.H. HENDERSON, J., Aiken County, March, 1942. Affirmed.
Action by Mrs. Virginia Gibbes against National Hospital Service, Inc., on a hospitalization policy, brought in a Court of Magistrate for Aiken County. The defendant corporation, not a resident of Aiken County, denied the jurisdiction of the Magistrate's Court to try the suit. From a judgment for the plaintiff the defendant appealed to the Court of Common Pleas for Aiken County, Judge Henderson, while overruling the Magistrate's rulings in part, sustained the verdict in favor of the plaintiff; so from this judgment the defendant corporation appeals.
The circuit order of Judge Henderson, unanimously adopted as the opinion of the Court, follows:
On July 15, 1939, the defendant National Hospital Service, Inc., issued a policy, known as a hospitalization policy, insuring the plaintiff, Mrs. Virginia Gibbes, against loss by reason of hospitalization.
This action was begun in the Court of Magistrate Dorcey K. Lybrand, at Aiken, to recover for a loss under the policy. The defendant made a special appearance for the purpose of objecting to the jurisdiction of the Court, and raises the point that Aiken County is not the place of defendant's residence. The Magistrate held that he had jurisdiction and proceeded with the trial of the case, resulting in a judgment in favor of the plaintiff in the sum of sixty-eight dollars.
In Article 5, Section 23, of the Constitution, it is provided: "Every civil action cognizable by Magistrates shall be brought before a Magistrate in the County where the defendant resides."
This is not a complex question where the defendant is a natural person, but is more difficult in cases involving a corporation.
"Corporations have no domicile, residence, or citizenship in the sense in which those words apply to natural persons, but only in a metaphorical sense." 18 C.J.S., Corporations, § 176, page 583.
"Residence is an attribute of a natural person, and can be predicated of an artificial being only by a more or less imperfect analogy. Strictly speaking, a corporation can have no logical residence or habitation. It has been said that a corporation is a mere ideal existence, subsisting only in contemplation of law — an invisible being which can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place. However, the sovereignty creating the corporation may give to it a local habitation or residence in law, if not in fact." 13 Amer. Juris., 281, Section 147.
The Constitution does not define the word "resides", and the legislature has power to declare the residence of corporations for the purposes of suit. 19 C.J.S., Corporations, § 1296, page 976. And a domestic corporation may have more than one place of residence. Miller v. Boyle Construction Co., 198 S.C. 166, 17 S.E.2d 312, 313.
The Miller case very clearly sets forth the law as to the residence of domestic corporations.
"We said in Morris v. Peoples Baking Company, 191 S.C. 501, 5 S.E.2d 286, 287: `The residence of a domestic corporation has been declared to be, and such corporation may be sued (1) in the county where its principal place of business is fixed by its charter, and (2) in any county where it has and maintains a place of business, or an agent engaged in conducting and carrying on the business for which it exists. * * *.'
* * * * *"We have thus far considered and discussed the point at issue with reference to the applicability of Section 422, 1932 Code, and in the light of the decisions hereinabove cited. We think, however, that the question raised by the appeal is also governed and controlled by the proviso in Sub-section 1 of Section 434 of the Code, which reads as follows: `Provided, further, That in the case of domestic corporations service as effected under the terms of this section shall be effective and confer jurisdiction over any domestic corporation in any county where such domestic corporation shall own property and transact business regardless of whether or not such domestic corporation maintains an office or has agents in that county.'"
The defendant is a domestic insurance corporation, with its principal place of business at Columbia, in Richland County. The record shows that it has no agent in Aiken County. The group treasurer who collects the premiums from the policyholders there represents the insured persons, and not the defendant. The company has no place of business in Aiken County.
Does the defendant own property and transact business in Aiken County?
At one time, before the institution of this suit, the defendant had a resident agent in Aiken County, who wrote a number of policies in favor of Aiken County residents, and some of these are still in force, the premiums being paid directly to the Columbia office of the company by mail. When the company approves a claim which has been assigned to a hospital by a policyholder, it sometimes pays the claim directly to the hospital.
The magistrate held that the defendant owned property and transacted business in Aiken County, since it has policy contracts there yielding premiums, and it has claims arising in the county which it pays or refuses to pay. The defendant contends that the policies are not property of the company, but of the insured persons; that the chose in action, or right to sue, is properly at its home office at Columbia; and that an insured does not really promise to pay the premium.
The word "property" is not confined to tangible or corporeal objects, but is a word of unusually broad meaning. "Property is a general term to designate the right of ownership; and includes every subject, of whatever nature, upon which such a right can legally attach. It is not necessary that the subject of it should be either lands, goods or chattels; for it extends to money and securities." Pell v. Ball, Speer Eq., 48, at page 83.
In McLemore v. Blocker, Harp. Eq., 272, it said that "the word property, is of very extensive meaning," and includes choses in action.
"The term `property' is, in law, a generic term of extensive application. It is a term of large import, of broad and exceedingly complex meaning, of the broadest and most extensive signification, a very comprehensive word, and is the most comprehensive of all terms which can be used. The term is often called `nomen generalissimum,' and is employed to signify any valuable right or interest protected by law, and the subject matter or things in which rights or interest exist." 50 Corpus Juris, 729.
"Thus the term is defined as any valuable right or interest considered primarily as a source or element of wealth, or any civil right of a pecuniary nature." 50 Corpus Juris, 730.
"In modern legal systems, property includes practically all valuable rights. The term is indicative and descriptive of every possible interest which a person can have, extends to every species of valuable right or interest, and comprises a vast variety of rights." 50 Corpus Juris, 738.
In the case of State v. Broad River Power Company, 177 S.C. 240, at page 265, 181 S.E., 41, at page 52, it was said: "The state had `property rights' in the canal, as any valid contract rights are `property.'"
It is stated in Lynch v. United States, 292 U.S. 571, 54 S.Ct., 840, 843, 78 L.Ed., 1434, that "valid contracts are property."
Considering the wide scope of the word, I think that the magistrate was correct in holding that the policy contracts in Aiken County constitute property of the defendant there. Such contracts are of great value to insurance companies, and no doubt furnish their principal source of income. Insurance companies strive to write as many sound policies as is possible, and the success and standing of a company is often regarded as being based upon the amount of its outstanding insurance, with the consequent large income from the premiums. It is quite true that a policy also represents an obligation of the company, but from its standpoint it is a valuable right also, since the aggregate of its premiums from all policies without doubt exceeds the total of its payments of claims. The paying of these Aiken County policies is the transacting of business there.
Plaintiff also contends that Section 7997 of the Code is a declaration by the legislature that the residence of a domestic insurance corporation is in any county where a loss occurs, and the magistrate was of that opinion. That section provides, in part: "All suits brought against any and all fire, life, or other insurance companies doing business in this State, may be brought in the county where the loss occurs."
I do not think that the section refers to residence, or that it makes the place of loss the residence of an insurance company. On the contrary, it seems to me that the statute is intended to permit such corporations to be sued, not only in the county of their residence, but also in the county where the loss occurs. There is a clear distinction between a place of residence, and a place where a cause of action arises. This distinction is shown by Sections 421 and 422 of the Code, where it is provided that certain actions may be brought in the county where the cause arose, other actions to be brought in the county where the defendant resides.
See, generally, Baker v. Irvine, 62 S.C. 293, 40 S.E., 672.
As applied to the Court of Common Pleas, Section 7997 gives the plaintiff a choice of suing his claim either in the county of the defendant's residence, or in the county where the loss occurs. However, when applied to the Court of Magistrate, we are met by the positive provisions of Article 5, Section 23, of the Constitution, that such cases, without exception, must be tried in the county where the defendant resides.
The legislature, of course, would be without power to authorize suits in the Magistrate Court in counties other than that of the defendant's residence. Dill v. Durham, 56 S.C. 423, 35 S.E., 3.
Without doubt the General Assembly does have the power to declare in so many words that the place of residence of a domestic corporation includes the county where the loss occurs under an insurance policy, but I do not think that this has been done by Section 7997. In my opinion, while the section applies to the Court of Common Pleas and other Courts having appropriate jurisdiction it is not applicable to the Courts of Magistrate in view of the constitutional provisions.
This section is referred to in the case of Harrison v. Carolina Mut. Ben. Corporation, 174 S.C. 338, 177 S.E., 395, but the question here involved was not raised by the parties nor in any way passed upon by the Court since there it was held that the suit was not one to recover a loss sustained under a policy.
It is ordered, that the fourth exception of the defendant be, and it is hereby, sustained.
It is ordered that the other three exceptions be, and they are hereby, overruled.
It is ordered that the holding of the magistrate that he had jurisdiction be, and it is hereby, affirmed for the reasons stated above.
It is ordered that the judgment of the magistrate in favor of the plaintiff in the sum of sixty-eight dollars be, and it is hereby, affirmed.
Mr. Carlisle Roberts, of Columbia, Counsel for Appellant, cites: As to jurisdiction of Magistrate's Court to try a suit against an Insurance Company not a resident of the County in which suit is brought: Constitution of S.C. of 1895, Article 5, Section 23.
Messrs. Williams Busbee, of Aiken, Counsel for Respondent, cite: As to defendant corporation being subject to suit in Magistrate's Court of a County other than the one of corporation's residence: 62 S.C. 293, 40 S.E., 692; C.J. S., Vol. 19, Sec. 1296; Id., Sec. 1298; Id., 1299; 2 S.E.2d 669 (Ga.); C.J., 14-A, Secs. 2882, 2883, and 2884, Footnotes; 28 A.L.R., 1292.
Counsel for Appellant, in Reply Brief, cites: As to Defendant Corporation being subject to suit in Magistrate's Court of Aiken County: 13 North Carolina Law Review,
February 23, 1943.
The Court is satisfied, from a careful study of the questions presented by this appeal, that Judge Henderson correctly disposed of all issues involved in the case. For the reasons stated by him in his decree, which will be reported, the judgment of the Circuit Court is affirmed.
MR. CHIEF JUSTICE BONHAM, MESSRS. ASSOCIATE JUSTICES FISHBURNE and STUKES, and CIRCUIT JUDGE L.D. LIDE, ACTING ASSOCIATE JUSTICE, concur.