Jones v. Horn

BROADDUS, J. The plaintiff in the year 1900 was engaged in the mercantile business and owned two drugstores, one at Cleveland and the other at Kings-ville, Mo., during which time defendant was engaged as a fire insurance agent at Harrisonville, Mo. On July 16, 1900, the defendant issued and delivered to the plaintiff a policy of insurance executed by the Mercantile Insurance Company, of Chicago, HI., insuring plain — 708 — tiff’s stock of drugs, fixtures, etc., in Ms store at Kings-ville. Prior to tMs date, however, the defendant had issued a policy of insurance on plaintiff’s goods at Cleveland. At one time appellant saw plaintiff at his stort in Kingsville when it was arranged that defendant should insure his goods at that place. He placed plaintiff’s insurance in a company which was not doing business in small towns like Kingsville but the company cancelled the policy; whereupon defendant proffered to insure him in some good company He then returned to his home in Harrisonville and sent to plaintiff a blank application for insurance in said Mercantile Insurance Company, together with a printed financial statement, and also an application for insurance in the Marshall Town Mutual Insurance Co. In a letter which accompanied these applications he referred to the cancelled policy and stated that he would keep on and get plaintiff in a good company, and that both the companies to which applications were enclosed were good companies. The plaintiff signed the application to the Mercantile Insurance Co. dated July 13, 1900. Upon receipt of this signed application from plaintiff, the defendant inserted in it a description of the property, which plaintiff had omitted, and also filled out and signed the blank on the back of the application designated “Agent’s Survey. ’ ’ On the following day he wrote to agents of the Insurance Co. at Chicago the following letter: “Gentlemen: — Please find enclosed application for $1,800, insurance on drug stock of H. E. Jones, Kings-ville, Mo. Premium $27. Please issue this policy and get it to me by return mail. The company I represent Mck some on country stores, consequently if I can arrange with you I will give you a good string of business. Have you arranged with the State so that I can issue policies here, and send report of same to you? If you can do this I can give you a good volume of good bus — 709 — iness. I have a fine territory and my business will run $3,000 per year in premiums. Think hard on this, as I can and will do you good if you will place me in position to do so. Get this policy to me and be sure to get all matters as I have them here. Your part of the cash will come promptly. Awaiting yonr favorable reply, I am, very truly, etc. ’ ’ The evidence does not show that the company made answer to the writer’s inquiry whether it had arranged to do business in the State. However, the defendant received the policy issued by the company and on the 17th day of July he mailed it to the plaintiff with the following letter: “Mr. H. E. Jones, Kingsville, Mo. Dear sir: Please find enclosed insurance policy No. 11166, Mercantile, of Chicago, Ill. This is a gilt-edge company as you will see from their statement enclosed, the only reason I did not put this in this company at first was I wanted to write the policy myself, but I have now arranged matters so it is just the same, and you have as good insurance as anybody in Kingsville. I have to pay these people spot cash so please enclose the premium, $27, in the return envelope, and everything is O. K. If you should have a loss wire the company at their expense and write me. I will see that you have prompt service of adjuster, and that you get a fair, square settlement,” etc. The plaintiff paid the premium which defendant after deducting his commission, forwarded to the insurance company. Subsequently, plaintiff’s property was destroyed by fire. The company failed to pay his loss and he then ascertained that it was not authorized to do business in the State. Before the evidence was heard the court was asked to make a finding of facts. Amongst other things, the finding was that the defendant was acting as agent for the Mercantile Insurance Co; that — 710 — the insurance was obtained upon the representations of defendant; that said company was financially good and responsible; that plaintiff, at the time he received the policy, did not know the company was not authorized to do business in the State; that defendant had such knowledge ; that it was not shown that said company was insolvent at the date of the policy; and that it was not shown that it had any property in the State. The plaintiff in his petition relies for recovery on the ground of the representations of defendant, the inducement for his acceptance of the policy that the company was “financially good and responsible;” that at the time of the issue of the policy the insurance company was insolvent, and that it is still insolvent; that defendant knew at the time of said insolvency of which plaintiff was ignorant, and that plaintiff did not know that said company was unauthorized to do business in this State. The finding was for plaintiff. At the beginning of the trial defendant objected to the admission of any evidence on the ground that the petition did not state a cause of action. The statute prohibits insurance companies from doing business in this State unless they comply with .certain of its provisions among which is one requiring them to deposit with the insurance commissioner a fund to be held by him as security for the benefit of the policy holders. When this is done and other requirements of the statute are complied with, the commissioner issues a certificate authorizing the company to do insurance business in this State. By section 7989, Revised Statutes 1899, no insurance company is authorized to do business in the State without such certificate, a copy of which shall be held by every agent or solicitor of such company in the State. Section 8001 provides, that any person who shall act as such agent or solicitor without first having obtained from the superintendent of insurance a certificate as required by said section 7989 shall be guilty of a misdemeanor and on conviction shall be fined not less than — 711 — ten nor more than one hundred dollars, or imprisoned in the county or city jail not less than ten days nor more than six months, or by both such fine and imprisonment. It is contended by defendant that where a statute creates a duty and imposes a penalty for failure to perform it, the penalty so prescribed is exclusive. In Utley v. Hill, 155 Mo. 232, the court so held. That was an action by a, depositor against the directors of the bank for deceit, “charging that plaintiff was induced to make such deposits by reason of false and fraudulent representations that the bank was solvent. Such representations consisting of reports made to the Secretary of State, as required by section 2752, Eevised Statutes 1889. That ease and the one under consideration here are similar in principle. This is what might be called an action of deceit, the misrepresentation consisting in the fact that defendant stated he would procure plaintiff insurance in a good company, whereas he procured him insurance in a company that was not authorized to do business in the State. In the Utley case the court cited many authorities to support the holding, among which was that of Wells v. Supervisors, 102 U. S. 625, and quoted the following language: “When a law imposes a punishment which acts upon the offender alone and not as a reparation to the party injured, and where it is entirely within the discretion of the lawgiver, it will not be presumed that he intended that it should extend further than is expressed. ’ ’ The statute regulating insurance like that in relation to banks, imposes a penalty upon the agent for a violation of its provisions and not as a reparation to the party injured. The plaintiff has cited decisions of the courts of other States to the effect that the representations of defendant that he would procure for him a good policy, imported that it should be the policy of a company that was authorized to do.business in this State and that the Mercantile Insurance Company not being so authorized was as a matter of law insolvent. Such was the holding — 712 — in Landusky v. Bierne, 80 N. Y. Supp. 238. And it was further held in said case that the policy itself was invalid. The law is different in that respect in this State. Our courts hold that such policies are not invalid. See Ins. Co. v. Railroad, 149 Mo. 165. Plaintiff also cites the case of McCutcheon v. Rivers, 68 Mo. 122,. in which an agent had received a premium, for a policy from an insurance company whose authority to do business in the State had been revoked. The court held that the party paying the premium could recover from the agent. If said case is to be considered as having any bearing here it is certainly in conflict with the Utley case, supra. The opinion is short, only a few lines, and no reason whatever is given for the holding. Whatever may be its effect we are bound to follow the later case. It therefore necessarily follows from what has been said that the representations relied on, though none was in fact made, that the defendant would procure plaintiff insurance in a company doing business in the State,, would not render defendant liable in this action. The burden was there upon the plaintiff to prove' the insolvency of said company. This he claims that he did. The representation of the defendant was tantamount to saying that he would procure plaintiff a policy in a company that was solvent. The plaintiff insists-that he established by evidence that said Mercantile Insurance Company was insolvent at the time the policy was issued. But the difficulty is that the court found that he failed to prove such fact. The plaintiff made-no exception to such finding and has taken no appeal'. . therefrom. On the contrary, he is here insisting that, the finding and judgment be affirmed. As he invokes-the finding he is precluded from denying its truth in any respect. Besides, there was evidence tending to support it. As the defendant incurred no -liability other than the penalty imposed by the statute for insuring plain- . — 713 — tiff’s property in a company not authorized to do business in the State, and as there is no presumption of insolvency because said company was not so authorized to do business, and a finding against plaintiff as to such insolvency, the plaintiff was not entitled to recover on any theory of the case. As the questions decided are conclusive of the case, we deem it unprofitable to pass upon other questions raised by the defendant. For the reasons given the cause is reversed. All concur.