Pringle v. Aetna Life Insurance

ELLISON, J. Plaintiff was a contractor and engaged in doing certain work in which he had others employed in his service. He obtained from defendant a policy of indemnity insurance in case he incurred liability to such employees by reason of an injury happening to them. One of his employees was injured and obtained judgment against him for near two thousand dol- - lars. The judgment was by default and plaintiff was successful in his effort to have it set aside. The case was afterwards dismissed, but plaintiff was put to an expense on account of it in the sum of $630, for which amount he obtained judgment in the trial court. The policy contained a provision that if an employee was injured the insurance company, should be notified and that if thereafter suit was instituted by the employee, the summons when served upon the plaintiff would be forwarded by him to the company. The question to be decided is whether the latter provision was complied with and that involves, in some degree, the law of the agency. It appears that Joseph. Rush was general agent of the Fidelity & Casualty Company at Kansas City and [713] that one of his employees named Nichols solicited plaintiff for his insurance and obtained it. But the Fidelity Company would not accept the risk. Nichols then arranged with plaintiff to place the insurance with some other company. He submitted it to the Ocean Company and it also refused the risk. He then submitted it to the defendant company, which accepted the risk and issued the policy in suit. T. J. Mastin was defendant’s general agent in Kansas City and the insurance was placed by Nichols through the agency of Mastin. Rush (acting through Nichols) collected the premium and he and Mastin divided the commission by taking it out of the premium. When the accident happened to plaintiff’s employee plaintiff notified Rush and Rush notified the defendant company through Mastín. When the summons was served on the plaintiff on February 25, 1903, at the suit of his employee, he delivered it to Rush and the latter, instead of sending it to defendant, or delivering it to Mastin, by mistake, mailed it to the Fidelity Company for which he was agent. Some weeks after-wards (in the latter part of April) the Fidelity Company returned it to Rush and he then delivered it to Mas-tin. The judgment obtained by plaintiff’s employee was about the same date of the delivery of the summons to Mastin. The exact date of the delivery to Mastin. is not clear, but it is not disputed that it was too late to be a compliance with the policy. So that the case is made to depend upon whether the delivery to Rush was a compliance and that depends upon the question whether Rush was defendant’s agent in the subject-matter of this insurance. It is clear that for the transaction of a general business in Kansas City Mastin was the defendant’s agent and that Rush was not, and that this plaintiff knew these facts. If Rush was defendant’s agent so as to bind it by receiving the summons from plaintiff, the agency must have arisen by some special circumstance or con [714] sideration, which arose in the conduct of the particular business relating to this policy. The plaintiff knowing that Rush was not defendant’s agent, must have known that he, Rush, was procuring the insurance as a broker from some other company. In other words, he knew him to be a broker as defined by- our statute (section 7997, Revised Statutes 1899). It is a general statement of law that a broker is the agent of the assured and not of the insurer. If he is the agent of the insurer it is because of some special condition or circumstance in the particular case. “A mere insurance broker cannot be converted into an agent of the insurance company, without evidence of some a,ction on the part of the company, or of facts, from which a general authority to represent it might be fairly inferred.” [123 N. Y. 6,16.] A broker after fulfilling the object of his service, viz., obtaining a valid contract of insurance is no longer the agent of either party. While he may perform acts which will bind the company in consummating the contract, his agency is not a continuing one. He is not an agent for future acts. [Rothschild v. Insurance Co., 74 Mo. 41; Gardner v. Insurance Co., 58 Mo. App. 611; Edwards v. Insurance Co., 100 Mo. App. 695; McCartney v. Insurance Co., 33 Mo. App. 652; Huggins v. Insurance Co., 41 Mo. App. 530; Bradley v. Insurance Co., 90 Mo. App. 369; 2 Clark & Skyles on Agency, 1720; 1 May on Insurance, 218; 2 Clements on Insurance, 474.] But there is no reason why one who has acted as broker may not have his ordinary relations to the company from which he procures the insurance enlarged. If there was a custom of business among insurance companies at Kansas City to treat the broker who solicits the insurance as in this case, as the agent of such company beyond the mere delivery of the policy, his act, within the limits of such custom, ought to bind the company. If therefore there was a custom in Kansas City (known to defendant) for the broker who solicited the [715] insurance for the insuring company to receive notices of accidents and summons for actions brought on account of such accidents, then Rush was a person to whom the summons in this case could be properly delivered. The trial court found that there was such custom and the finding is supported by evidence. The testimony of Guthrie, the general manager of Mastin’s office, showed such custom as to notices of accidents and notices of suits thereon. There was other testimony of like tendency. But the defendant argues that though the insurer permitted the broker to receive and transmit to it notices of accidents and suits thereon, it did not follow that his agency for that purpose was recognized. We think it does follow. Any other rule would be unjust and deceptive. Permitting such action to be taken is inviting it to be taken, gee in illustration of the foregoing the following authorities cited by plaintiff: Queen Ins. Co. v. Bank, 111 Fed. Rep. 697; Ins. Co. v. Hartwell, 123 Ind. 177; McGraw v. Ins. Co., 54 Mich. 145; Ins. Co. v. Wiard, 59 Neb. 452; May v. Ins. Co., 27 Fed. Rep. 260. The result is that we consider the trial court’s view of the law as correct and hence affirm the judgment. All concur.