The opinion of the court was delivered by: COOPER
This action, tried to the Court, centers on the dealings of two insurance companies, plaintiff United States Underwriters Incorporated (Underwriters) and defendant Simcoe & Erie General Insurance Company (Simcoe). Underwriters alleges that in 1967 efforts were undertaken to license Simcoe in the state of Georgia; that monies had to be deposited with the Georgia Insurance Department as a security requirement; that a portion of this security requirement, $ 64,000, was deposited by Underwriters on behalf of Simcoe; and that the return of the monies so advanced is now due on the basis of a contract entered into on October 23, 1967 or by virtue of a separate and distinct promise to repay the debt. For its part, Simcoe denies liability whatever and affirmatively seeks to impose the applicable statute of limitations.
For reasons set forth below, we dismiss the complaint in its entirety.
The essential facts are not in dispute. Underwriters, a Georgia corporation, was formed in late 1966 by Joseph Fogarty (Fogarty) and Lindsey Hopkins (Hopkins) for the purpose of underwriting insurance. At the time of its formation, Fogarty was president of Associated Marine Underwriters (AMU), a concern engaged exclusively in the underwriting of ocean marine insurance. In 1966, discussions were held among the principals of AMU with a view towards expanding their business-the end result being the formation of Underwriters for the expressed purpose of handling new areas of insurance such as property and casualty.
Defendant Simcoe, currently and at all times relevant herein, is a Canadian chartered insurance company dealing in marine risk insurance.
In late 1966, John C. Stradwick (Stradwick) then executive vice-president of Simcoe had several discussion meetings with Fogarty and Hopkins concerning possible business arrangements between the various companies operated by the litigants before us.
Stradwick testified that these discussions related to fishing vessel insurance business in the Caribbean and the Gulf of Mexico; that Fogarty was interested in establishing a "Lloyds" type market in the southeast.
Simcoe had contact in the Lloyds market and had done "quite a bit of business" with one Lloyds broker in particular, Robert Bradford Overseas Limited.
Stradwick further testified that Fogarty and Lloyds had come to an understanding concerning their proposed business arrangement: A company "able to accept reinsurance from Lloyds" would have to issue the policies in the southeastern states in which Fogarty wished to do business.
The parties finally agreed that Simcoe would act as the corporate vehicle issuing policies and reinsuring the risks in the Lloyds market. Efforts were then undertaken to license Simcoe in the southeast. Originally, attempts were made at licensing Simcoe in Florida, but for reasons never made clear at trial, a license was not secured there. Ultimately, Georgia
was selected as Fogarty and Hopkins had "very good connections" in that state.
Sometime in the first half of 1967, Stradwick met with Mr. Bentley (Bentley) the Commissioner of Insurance for the State of Georgia to discuss Simcoe's application for a license. Stradwick testified that it was a "very, very friendly meeting" and Bentley was "quite prepared to back our application."
At this initial or subsequent meeting with Bentley the subject of a security deposit was discussed.
The first figure mentioned for this purpose was $ 30,000 and Fogarty "volunteered" to put up the entire sum.
However, Fogarty was subsequently informed that this security requirement would amount to $ 125,000. Fogarty then notified Stradwick of the increase. Stradwick testified he told Fogarty that the latter's offer to cover the cost of the security deposit would now have to be increased to 50% of $ 125,000 ($ 62,500).
In the spring of 1967 Fogarty and Stradwick met in Miami, Florida where continued discussions were held regarding this proposed business arrangement. Stradwick testified that he told Fogarty that he needed a sign of "good faith"; that if Fogarty would "put up" 50% of the security requirement, then in the event Simcoe made a profit "an underwriting profit based on an underwriting year account basis," Fogarty would be repaid out of such profits; that "we would share and share alike" as to the original capital; and if the venture was not successful each side would lose $ 62,500. Stradwick further testified that Fogarty agreed to these conditions and stated he would have his people draft an agreement to that effect.
Simcoe first filed its application with the Georgia Insurance Department sometime prior to February, 1967.
Raymond C. Addicks (Addicks), a vice-president of Underwriters in 1967 and a former Georgia Insurance Deputy Commissioner, testified that Fogarty had informed him that Underwriters would put up funds to be applied to Simcoe's deposit; and that it was his responsibility to see that this was done in a manner acceptable to the Georgia Insurance Department.
In July, 1967 Addicks established a temporary deposit with the Georgia Insurance Department by depositing with it a check for $ 50,000 from the Maryland National Insurance Company and another check for $ 12,500 from Underwriters.
Once this temporary deposit was established, Addicks testified that he then undertook, at Fogarty's direction, to purchase interest bearing securities to replace the previously deposited funds. Shortly thereafter, Addicks contacted the Fulton National Bank; purchased $ 62,500 worth of government bonds and registered them with the insurance department on Simcoe's behalf. Addicks further testified that to the best of his knowledge Simcoe itself deposited an additional $ 62,500 worth of securities bringing the total to the requisite $ 125,000.
On June 30, 1967 Simcoe received its Georgia license.
Once Simcoe's license was granted, Fogarty had a proposed agreement prepared and sent to Stradwick's Canadian offices. Stradwick signed this agreement on October 23, 1967 and admitted that it was based upon the earlier discussions he had with Fogarty.
The agreement, in ...