Franklin Life Insurance v. People ex rel. Atwood

Mr. Justice Hand delivered the opinion of the court: This is an appeal from a judgment of the Appellate Court for the Fourth District affirming a judgment of the circuit court of Williamson county in an action of debt to recover a penalty for a violation of the provisions of an act entitled “An act to correct certain abuses and prevent unjust discriminations of and by life insurance companies doing business in this State, between insurants of the same class and equal expectation of life, in the rates, amount or payment of premiums, in the return of premiums, dividends, rebates or other benefits,” approved June 19, 1891, in force July 1, 1891, (Hurd’s Stat. 1899, p. 978,) for unjustly discriminating between life insurants of the same class. The declaration alleged the issue of a life policy to one A. J. Kimmel for $1000 by the appellant, acting through one H. G-. Parr, agent, and charged an unjust distinction and discrimination in its established rates in favor of said Kimmel, and which discrimination is not embodied in said policy. The general issue was filed. A jury was waived and a trial had before the court, which resulted in a finding and judgment in favor of the appellee for $500 and costs, and an appeal has been prosecuted to this court. It appears from the evidence that the charge to said Kimmel as the first annual premium by the agent, Parr, was $28.02, when the regular rate for Kimmel’s age was $32.02 on a thousand dollar policy. It further appeared that the discrimination was made without the knowledge or consent of the appellant, and that it had not ratified the action of its agent. Propositions of law were submitted to the court to the effect that the act of the agent in making the distinction or discrimination would not render the appellant liable without proof that it authorized or ratified the action of the agent in making the distinction or discrimination, which were refused, and the action of the court in that behalf has been assigned as error. Section 1 of said act provides, among other things, that no life insurance company or association organized under the laws of this State or doing business within this State shall make or permit any distinction or discrimination between insurants of the same class and equal expectation of life, in its established rates. Section 2 provides: “If any such life insurance company, or association, its agent or agents, as aforesaid, shall make any unjust discriminations, as enumerated in section 1 of this, act, the same shall be deemed guilty of having violated the provisions of this act, and upon conviction thereof shall be dealt with as hereinafter provided.” Section 3 provides: “Any such life insurance company or association which shall transact its business in this State in violation of the provisions of this act, shall, together with the agent or agents so unlawfully transacting said business, jointly and' severally, be subject to a penalty of not less than five hundred dollars ($500), or more than one thousand dollars ($1000), to be sued for and recovered in the name of the People of the State of Illinois, by the State’s attorney of the county in which such agent or agents may reside, or in the county in which the offense is committed.” From the repeated decisions of this court it is clear the legislature had the power to pass a statute making the appellant liable for the acts of its agent in making distinctions or discriminations in its established rates although it did not authorize the distinction or discrimination to be made and had not ratified the making thereof, but had expressly directed its agent not to make the same. (Mullinix v. People, 76 Ill. 211; Noecker v. People, 91 id. 494; Toledo, Wabash and Western Railway Co. v. People, 81 id. 141.) The doctrine announced in these cases seems to be conceded by appellant, but it is contended that in this statute the legislature has not declared that an insurance company or association shall be held liable for the acts of its agent in making distinctions or discriminations in the established rates to insurants of the same class, without proof that the company or association authorized, consented to or ratified the acts of its agent in making such distinction or discrimination. We do not think the statute under consideration will bear the construction contended for by appellant. To so construe it would be to nullify it. The statute provides that “if any such life insurance company or association, its agent or agents as aforesaid, shall make any unjust discriminations,” etc., it shall be deemed guilty of having violated the provisions of the act, and the company "or association, together with the agent or agents so unlawfully transacting said business, shall become jointly and severally liable for the penalty prescribed. The statute is unqualified, and in express terms provides that if the statute be violated, the company or association, and its agent or agents, shall be jointly and severally liable. In the NoecJcer case the terms of the statute there under consideration were no broader than the statute in question, and it was there held that the defendant was liable for sales of intoxicating liquor made by his agent, no matter what may have been his instructions to him; and in Indianapolis and St. Louis Railroad Co. v. People, 91 Ill. 452, that it was no defense in an action against a railroad company to recover the penalty imposed by statute for a failure to stop its train at a railroad crossing, that the company had a rule in force, with which the engineer was familiar, requiring him to comply with the law and stop at all railroad crossings, which he disregarded without the consent of the company. From an examination of this statute, in connection with the decisions above referred to, it is clear the circuit court properly refused to hold as law the propositions submitted on behalf of appellant. The legislature had authority to fix the terms upon which appellant had the right to do business in this State. In effecting its organization and prosecuting its business within the State it accepted the conditions imposed upon it, one of which was that it should be liable for the acts of its agent performed in violation of said statute. If it employed a reckless person who had no regard for the law, it can not shield itself from responsibility by reason of the fact that its agent violated its instructions. Mullinix v. People, supra. The judgment of the Appellate Court will be affirmed. Judgment affirmed.