Gates v. Justice

Hatcher, Judge: The plaintiff obtained through the defendant two fire insurance policies which were written by foreign companies not admitted to transact business in this state. The plaintiff was unable to collect from the companies for a loss under the policies. In this action he seeks to hold defendant personally liable by virtue of section 53, Chapter 34, Code. The defense is that the defendant acted as agent for the plaintiff, ánd not for the insurance companies. The jury found for the defendant, and the trial court sustained the verdict. The defendant conducted a general insurance business under the name of “Lee Justice Insurance Agency.” The plaintiff testified that the defendant solicited this insurance; that after the policies were delivered, a bill was sent him for the premiums in the name of defendant’s agency for $102.85, which amount he paid directly to the agency; and that when the loss occurred the defendant said he “would call up his man at Charleston that represented him and his company,” and have the loss adjusted. The defendant was not a licensed fire insurance agent at that time, although he had formerly been one. He testified that he did not solicit fire insurance business; but merely wrote fire insurance when requested to do so, as “an accommodation”, and that he did not solicit plaintiff, but wrote the policies at plaintiff’s request. He stated that he had procured a number of policies for other parties in the two companies, the premiums of which amounted to about $8,000.00. He explained his connection with the companies by saying that their general agent in Philadelphia had written him that they “could place some outside business.” He detailed his system as follows: “When fellows would come for insurance, I would take the application and *333 mail it to tbe companies and get policies for them.” He would then collect tbe regular premiums and deduct therefrom bis commission. He admitted be did not tell plaintiff or any one else that be was acting as bis agent'instead of agent for tbe companies; that although be knew several months before tbe fire that tbe companies were not.licensed in this state, be did not inform plaintiff; that be bad authority from tbe general agent of tbe two companies to adjust small losses and to sign its name “in case of a light transfer”, upon printed forms furnished for that purpose, which be bad done; and that if be bad not thought tbe companies all right, be “would not have been working for them.” He also admitted be bad written a letter to tbe general agent of tbe two companies after tbe fire', in which be stated that the plaintiff was “talking all over town” about bis failure to collect tbe policies, and that “be has caused me to lose several good prospects. ’ ’ His explanation of that statement is: ‘ ‘ So many people came in with policies even in casualty companies —and fire companies too — for cancellation, and I would have to pay back their money on them up to tbe amount of several hundred dollars, and that is what hurt me.” He further stated that since learning that tbe companies were not licensed in this state, be bad not “written any business for them at all.” Tbe statute above referred to is: “Tbe agent of any insurance company of any other state or foreign government, which has not been admitted to transact business in this state, shall be personally liable upon all contracts made by or through him, directly or indirectly, for or in behalf of any such company.” An insurance agent is ordinarily defined as one appointed by an insurance company “to perform some act or acts in furtherance of tbe business of bis principal. * * Whether upon a given state of facts one is or is not to be deemed tbe agent of tbe insurer has generally been held to be a question of law.” 16 A. & E. Ency. Law, p. 907, 32 C. J., p. 1052. Here tbe uncontradicted evidence shows that tbe general agent of tbe two companies bad written defendant in regard to placing “outside business” for them; that be received and *334 transmitted applications to them, delivered tbeir policies to and collected premiums from tbe insured, adjusted small losses, signed transfers, and refunded premiums for them; that be not only bad effected a large amount of insurance for them prior to plaintiff’s loss but bad “good prospects” for further insurance contracts, and that be regarded bimself as “working” for them. His authority to perform these acts for them was express and is not even left to implication. That be was tbeir agent is so apparent as to need no further comment. Simmons v. Vaughn and Blackwell, 165 Ky. 167, 177; Price v. Garvin, (Tex.) 69 S. W. 985; 2 C. J., p. 419, sec. 1; 21 R. C. L., p. 817. As tbeir agent it is a well settled principle of law that be “cannot be considered in any sense as tbe agent of insured in any matter connected with tbe issuance of tbe policy.” 16 A. & E. Ency. Law 909. 32 C. J., p. 1053, sec. 128; Dietz v. Ins. Co., 31 W. Va. 851, 856. That tbe defendant did not solicit tbe insurance in tbe first instance is of no evidential consequence. In a case under a statute similar to ours, tbe Supreme Court of Iowa pertinently said: “Now, while Giberon did not solicit tbe insurance in tbe sense of having importuned defendants to apply for it, be did procure tbe application within tbe meaning of tbe statute; for be received it, and at bis request tbe policy was issued upon it. To bold otherwise would be to put an exceedingly narrow construction upon tbe words of tbe enactment, and one which in many cases would defeat tbe manifest legislative intent. Tbe manner in which such business is transacted is known to all men. Prudent business-men and property-owners do not wait to be personally solicited before procuring insurance on tbeir property, but tbeir custom is to apply to tbe agent of some company or association engaged in tbe business of insurance; and, if tbe agent is a mere solicitor, tbeir application is forwarded to some agent or officer having authority to accept or reject it. Tbe statute was as certainly intended to apply to transactions of that kind as to those in which tbe agent procured tbe application by personal solicitation. ” St. Paul, etc. Ins. Co. v. Shaver, 76 Iowa 282, 286. *335 Under tbe statute the defendant is personally liable upon tbe insurance contracts in tbis case. See generally 32 C. J., p. 1001, sec. 38; Cooley’s Briefs on Ins. (2nd Ed.), pp. 491 to 495. Tbe verdict of tbe jury was therefore contrary to law, and will be set aside, and tbe judgment of tbe lower court sustaining it will be reversed. Reversed; verdict set aside.