Case Name: Southbay Motel, Inc., v. Nationwide Mutual Fire Ins. Co.
Court: Mercer County Court of Common Pleas
Jurisdiction: Ohio
Decision Date: 1969-12-31
Citations: 23 Ohio Misc. 319
Docket Number: No. 16225
Parties: Southbay Motel, Inc., v. Nationwide Mutual Fire Ins. Co.
Judges: 
Reporter: Ohio Miscellaneous Reports
Volume: 23
Pages: 319–325

Head Matter:
Southbay Motel, Inc., v. Nationwide Mutual Fire Ins. Co.
[Cite as Southbay Motel v. Nationwide Ins. Co. (1969), 23 Ohio Misc. 319.]
(No. 16225
Decided December 31, 1969.)
Common Pleas Court of Mercer County.
Messrs. Koch & Koch, for plaintiff.
Messrs. Spidel, Staley, Hole & Hanes and Messrs. Hinders & Klosterman, for defendant.

Opinion:
Dull, J.
This action is one brought by the plaintiff to recover on an insurance policy issued by the defendant for "loss of earnings resulting directly from necessary interruption of business caused by the perils insured against damaging or destroying the building(s) or business per sonal property at a location described in this endorsement # # * >>
On September 20, 1969, the defendant filed the following motion:
"Now comes the defendant, Nationwide Mutual Fire Insurance Company, Columbus, Ohio, by its attorneys, for the purpose of this Motion and for no other purpose, and without submitting itself to the jurisdiction of this court, and moves the court to set aside the summons issued herein against it, the service thereof made on it, and the return of the sheriff thereon, for the reason that the provisions of R. C. 2703.11 have not been complied with."
On November 15, 1969, the plaintiff filed the following motion:
"Now comes the plaintiff by its counsel, including Spi-del, Staley, Hole & Hanes, who are now associated with original counsel, representing plaintiff, and move that the court reconsider the opinion filed herein on October 31, 1969, and that (1) the plaintiff, in the furtherance of justice, be permitted to amend at bar, or in the alternative, to file an amended petition alleging that the defendant is a domestic insurance corporation; and (2) that the plaintiff be permitted to issue summons to the Sheriff of Franklin County, Ohio, to be served upon the defendant, Franklin County being the place where the principal offices of the defendant are located."
At the outset it will be noted that according to Section 1701.07(0), Revised Code, there is no provision for a statutory agent for domestic insurance companies.
Section 2703.11, Revised Code, provides:
"When the defendant is an insurance company, and the action is brought in a county in which it has an agency, the service may be upon the chief officer of such agency."
Service was originally made, on May 16, 1969, upon "Lester J. Brandewie, agent for the defendant within the (Mercer) County."
On June 5, 1969, the defendant filed a motion identical to the one quoted above. This motion was sustained. Thereafter, on August 20, 1969, service was again made upon "Lester J. Brandewie, chief officer of an agency of the defendant."
Section 3929.27, Revised Code, provides:
"A person who solicits insurance and procures the application therefor shall be considered as the agent of the party, company, or association thereafter issuing a policy upon such application or a renewal thereof, despite any contrary provisions in the application or policy."
• Lester J. Brandewie is one of four other representatives of the defendant company who solicit and sell insurance and issue policies for the defendant company in Mercer County, Ohio, and are considered "independent contractors." All such representatives have equal powers and authority. There is no central or chief agency or agent located in Mercer County.
Paragraph one of the syllabus of Royal Ins. Co. v. Silberman (1904), 24 C. C. (N. S.) 511, 34 C. D. 737, reads:
"Section 3644, Revised Statutes [Section 3929.27, R. C.], making the agent who solicits insurance the agent of the company, does not make him the agent of the company for all purposes, but only those connected with the negotiations of the contract, and notice of loss given to such, agent will not constitute notice to the company."
Paragraph one of the headnotes of Thomas v. Fields (1964), 94 Ohio Law Abs. 48, reads:
"The solicitor of insurance under the purview of R. C. 3929.27 is the agent of the insurer only to the extent of the matters and questions contained in the application; he does not become the agent of the insurer for the duration, of the policy."
Therefore, it is the finding of the court that the defendant has no agency or chief officer of such agency in Mercer County upon which service can be made under the provisions of Section 2703.11, Revised Code, whereby the court can acquire jurisdiction of the person of the defendant.
However, Section 2307.36, Revised Code, provides:
"An action other than one of those mentioned in Sections 2307.32 to 2307.35, inclusive, of the Revised Code. against a corporation created under the laws of this state, may be brought in the county in which such corporation is situated, or has or had its principal office or place of business, or in which such corporation has an office or agent or in any county in which a summons may be served upon the president, chairman, or president of the board of directors or trustees or other chief officer. If such corporation is an insurance company, the action may be brought in the county wherein the cause of action or some part thereof arose # *
By virtue of the permissive provisions of this statute the court in Mercer County can, without question, acquire jurisdiction of the subject matter of the action.
As stated by Professor Robert L. Wills in his analytic article, "The Effect of Improper Venue Upon Jurisdiction of the Person and Jurisdiction of the Subject Matter," found in Volume 11 at page 291, et seq., Ohio State Law Journal (1950):
" jurisdiction may be defined as the power to hear and determine. Venue, on the other hand, may be defined as the 'locality of a law suit — the place where judicial authority may be exercised.'
" there are two kinds of jurisdiction . The first is jurisdiction of the subject matter . If a court does not have jurisdiction of the subject matter, it cannot render a valid judgment.
" # ag to the second kind of jurisdiction — jurisdiction of the person. If a court does not have jurisdiction of the person of the defendant, it cannot render a valid in personam judgment against the defendant, even though it has jurisdiction of the subject matter of the particular action. But, unlike jurisdiction of the subject matter, a party may waive the objection of lack of jurisdiction of his person. Thus, even if a court at first lacks jurisdiction of the person of the defendant, the defendant may enter a general appearance and thereby confer upon the court jurisdiction of his person."
The defendant, however, has not waived the lack of jurisdiction of the person of the defendant, but on the contrary has objected to it twice. Neither has the defendant entered a general appearance to confer upon the court jurisdiction of the person of the defendant.
Section 2703.10, Revised Code, provides, in part:
"A summons against a corporation may be served upon the president, mayor, chairman, or president of the board of directors or trustees, or other chief officer; or if its chief officer is not found in the county, upon its cashier, treasurer, secretary, cleric, or managing agent; or, if none of such officers can be found, by a copy left at the office or usual place of business of the corporation with the person having charge thereof."
The principal office and the officers of the defendant, a domestic corporation, are situated in Columbus, Franklin County, Ohio, where service of summons can properly be made in compliance with the provisions of Section 2703.10, Revised Code, and thus jurisdiction acquired of the person of the defendant. Thus, the court in Franklin County can acquire jurisdiction of the person of the defendant and of the jurisdiction of the subject matter by virtue of the permissive provisions of Section 2307.36, Revised Code, supra.
However, Section 2703.04, Revised Code, provides in part:
"When the action is rightly brought in any county, according to Sections 2307.32 to 2307.40, inclusive, of the Revised Code, a summons may be issued to any other county against one or more of the defendants at the plaintiff's request ."
This statute specifically includes Section 2307.36, Revised Code, being one of the Sections from 2307.32 to 2307.-40, inclusive, Revised Code. Hence, the court finds that the action being "rightly brought" in Mercer County under the permissive provisions of Section 2307.36, Revised Code, whereby the court can acquire jurisdiction of the subject matter of the action, summons may be issued to Franklin County for service upon one of the principal officers of the defendant, whereby the court can acquire jurisdiction of the person of the defendant.
Paragraphs three and four of the syllabus of Gauder v. Canton Provision Co. (1937), 56 Ohio App. 170, state:
"3. The only time a court can acquire jurisdiction over a domestic corporation by process issued to a county other than the one in which the suit is brought (except under a few special and specific statutes), is when such corporation defendant is properly joined with a defendant over whom jurisdiction is obtained in the county of the suit.
"4. The Legislature, by the enactment of Section 11282, General Code (Section 2703.04, Revised Code), did not intend to provide that, in a suit against a domestic corporation alone, the court could acquire jurisdiction over the corporation in the county of suit where the corporation could not be served with summons by the officers of such county."
The rule of the Gauder case applies to domestic corporations generally; that is to say: the only way for the court to acquire jurisdiction of the person of a domestic corporation alone is to follow the provisions of Section 2703.10, Revised Code, supra.
However, the defendant in the Gauder case was not a domestic insurance company. The defendant in the instant case is a domestic insurance company and the court so finds. Hence, the procedure whereby jurisdiction of the person of the defendant, a domestic insurance company, can be acquired is an exception to the rule stated in the Gauder case by reason of Section 2307.36, Revised Code, a special and specific statute.
The case of Tinker v. Warner, 20 Ohio Law Abs. 622, cited by the defendant, can be distinguished. Although that court held that the suit against an insurance company could be brought in the county where the cause of action arose, such holding was in order to properly join a beneficiary of the policy as a party defendant in that county although it was not the county of the beneficiary's residence. Further, in the Tinker case, the insurance company filed an answer and the case proceeded to judgment.
Thus, the court in Franklin County can acquire jurisdiction of the subject matter of the. action and also juris.r. diction of the person of the defendant. And thus, also, the court in Mercer County can acquire jurisdiction of the subject matter of the action and also the jurisdiction of the person of the defendant. The plaintiff has exercised his choice and brought the action in Mercer County. Hence, the plaintiff will be permitted to amend his petition by alleging that the defendant is a domestic insurance corporation and summons may be issued to Franklin County to be served upon one of the principal officers of the defendant.
Any expressions of opinion, findings, rulings or orders of the court contained in the opinion of the court filed October 31, 1969, that are contrary to the expressions of opinion, findings, rulings or orders contained herein are hereby superseded.
Motion to amend sustained.