Wheatfield v. Beall

MoAdam, J. The defendant, an insurance agent, by agreement dated August 9, 1893,- appointed the plaintiff his subagent to. cam vass for applications of insurance and to forward the same to the Equitable Life. Assurance Society, it being provided that “ if therisks are approved and policies issued by the said society, the said party of the second part ” (the plaintiff) “ shall collect and forthwith pay over to fhe said party of the first part ” (the .defendant) “the premiums on assurances thus effected, unless 'otherwise directed by the said society.” It was further provided that “ Brokerages shall'accrue only as the premiums are paid in cash to said party of the first part, or said society. Ho policy or premium receipt shall, be considered as settled for, nor shall any risk be assumed thereunder by said society,- unless the premium shall have been paid' in cash to said society.” * * * “ Under no circumstances' what [585] ever shall said party of the second part allow a policy of assurance to leave his possession unless the first premium shall have been duly settled, except 'to return the policy "to said party of the first part, or said society.” * * * “ The said party of the second part shall have no claim against said party of the first part, or said society, for brokerages, or any other claim whatever, under this contract not herein specifically authorized.” Plaintiff sued on this agreement to recover commissions claimed to have been earned by him upon a policy of assurance in the form of a twenty-year indemnity bond alleged to have been procured by him, and issued by the Equitable Life Assurance Society of the United States upon the life of one David Haas. Haas was examined by the society’s physician and accepted; the bond was written and received by the plaintiff and delivered to Haas, who did not pay the premium. Subsequently Haas changed his mind and desired an endowment policy. He surrendered the bond, was reexamined for the endowment policy, and rejected. The bond was retained by the society, to which it was surrendered, and it refused to issue any new obligation. As .the premium on the obligation was not paid it is apparent that there can be no- recovery by the plaintiff unless the defendant has by some act of his, irrespective of the question of premium, made himself liable. The plaintiff succeeded in the court below on the theory that the defendant refused to return the bond after the rejection of Haas on the second examination because the applicant was “ growing too fast ” and that thereby the defendant waived tender of the premium, which might have been paid then and there if defendant had placed his refusal to deliver the bond on the ground of nonpayment of premium. The facts may be summarized as follows: David Haas, a young man 18 years of age, made application for one form of policy; was examined; and a policy was written and delivered to him by plaintiff, but no premium paid or offered to be paid. Subsequently the applicant changed his mind and desired a different form of policy. He consented to a surrender of the first policy; surrendered it; was examined for a different character of insurance, and rejected. The society refused to reissue the first policy or make a new one. Finding he could not get the endowmept policy, Haas concluded to repossess himself of the indemnity bond; but he was too late. [586] The applicant-intended that the first policy he returned to the society, and for that purpose it was given to the defendant, who. gave it to the policy clerk of the society; and the defendant could not get it back because the society refused to reissue it. He failed To comply with the demand to return" the policy not. because Haas was growing too fast, but for the reason that the society acted on the surrender of the policy by retaining "it, thereby making it impossible for the defendant to return it. The society had a right to -refuse to issue an endowment policy, and the defendant could npt ' compel it to issue one, for he had no control over its action in that -regard. ’ , - The defendant employed the plaintiff to solicit applications for insurance, and was himself employed by the society for that purpose. He submitted all applications to his employer, which acted upon them as it saw fit, accepting or rejecting at its pleasure'^a course óf business as well understood by the plaintiff as by the defendant. ' Hnder such circumstances the defendant was guilty of no breach of duty to the plaintiff, and did nothing which justifies a recovery against him for brokerage on moneys which never reached his hands, and which, upon the facts disclosed, never-can, ' ■ The only evidence of waiver is that, on a few previous occasions, the plaintiff delivered policies without collecting the premium, and afterward collected the money or paid it “ out of his own pocket,” and, from this, it is argued the plaintiff might extend a short credit to his customers. Assuming this to be so, and that the delivery of . the bond to Haas was with the acquiescence of the defendant, there is nothing in either circumstance which estopped 'the society as to its course of dealing with applicants "or policyholders, or waived, even as to the defendant, the special provision of the contract, that the plaintiff’s right to brokerage .should in no case attach until the premium was first actually paid to defendant or to the society. Haas knew, when he directed that' the. first policy be surrendered to the society, that it might act on the surrender, and keep the policy an an inoperative instrument. He knew also, when he submitted to the second medical examination, that the . society was under no obligation to accept him as a suitable person for an endowment policy, but was at liberty to reject his applica.tion; and he had .no right to expect, much less demand, that the society would conform to his changeable notions respecting’ the kind of insurance he desired. [587] The remark attributed, to the defendant as an excuse'for not 'delivering the policy, that the plaintiff was “ growing too 'fast,” was simply assigned by him as the reason why the society had rejected the second application, and had reference to nothing else. The defendant could not have delivered the policy to the plaintiff or to Haas, at the time it was demanded; even if he had'dé•sired to do so, whether the premium thereon was paid or not, for the unanswerable reason that the insurer had, agreeably to Haas’ desire, accepted the surrender, and thereafter declined to reissue it. And trover would not he against, the defendant for refusal to deliver the policy, for such refusal was not in itself conversion:; in a proper case it would only be evidence of it, and a defendant •is always at liberty to show lawful reasons for not complying with á demand made, such as inability to comply arising from no fault of his. Andrews v. Shattuck, 32 Barb. 396; McClellan v. Wyatt, 34 N. Y. St. Repr. 55. At the trial the defendant and the society were treated as if one and the same person, instead of two.entirely different entities, and its acts were attributed to him, as if he was responsible for its part in the transaction. We fail to. discover any legal ground upon' which the recovery had can be sustained. • - The judgment must be reversed and a new trial ordered, with costs to the appellant to abide the event. .Halt, P. J., and Bischoff, J., concur. . Judgment reversed and new trial ordered, with costs to appellant to abide event.