Wildberger v. Hartford Fire Insurance

Whitfield, J., delivered the opinion of the court. The cases mainly relied on by counsel for appellant are Thompson v. Insurance Co., 136 U. S., 287, and Northrup v. Insurance Co., 33 Am. R., 815, s.c. 48 Wis., 420. The former is wholly inapplicable. Kearney never was the agent of the insurance company, nor was Thompson. But Kearney, being receiver, was approached by the agent of the insurance company, and solicited to insure the trust property, which he did, and paid the premium out of the trust funds, prior to any order directing him to do so, and the company, when sued, set up, as one defense, that he had no authority so to use the trust funds in paying the premium before such order, and that the contract was void as to the company on that ground, which defense was, of course, scouted. The cases are utterly unlike. The court held that the title of property in a receiver’s hands is in its owner, and the possession is the possession of the court; but these matters are aside from the real point under discussion. In the other case, the owner of. the property insured sent his sons to the insurance agent, Edwards, to get insurance, and after it was gotten, put the insurance agent in charge to guard and watch it, and without compensation, so far as appears. The insurance agent was not the general agent of the owner of the property. That this case is understood to hold that the guarding the property was a collateral matter, aside from the insurance, is shown by what Mr. Biddle says about this case in § 497,. vol. 1, of his work on Insurance, when he observes: “Of course a mere employment by the other party, in another matter, would not be material. ’ ’ The opinion in the case confines it strictly within its own limits, and cites no authorities. We have examined all the authorities cited in note 1, p. 380 — 1, of vol. 1 of Am. & Eng. Enc. of Law, and find them to be cases [342] where a ‘ ‘ middle man ’ ’ receives commissions from both parties merely for bringing them together. He was not the agent of either party in the contract made by and between them after they met. Of this class of cases, Dixon, C. J., is quoted in Barry v. Schmidt, 57 Wis., 174 (15 N. W., 24), assaying: "A broker, whose undertaking is merely to find a purchaser at a price fixed by the seller, or at a price which shall be satisfactory to the seller when he and the purchaser meet, is in reality only a ' middle man, ’ whose duty is performed when the buyer and seller are brought together, and as to whom the policy of the law which excludes double compensation has been considered inapplicable.' ’ But where the agent of the seller is the agent of the buyer in the sale itself, a different principle obtains, as is clearly shown in Rupp v. Sampson, 16 Gray (Mass.), 398. The true doctrine governing here is thus expressed in an elaborate note at page 281, 7 Am. St. R. (Potter’s Appeal [Conn.], 12 Atl., 513): “Therefore it is an undisputed rule of law that unless, with the free and intelligent consent of his principal, given after full knowledge of all the facts and circumstances, the agent cannot, in the same transaction, act for both principal and the adverse party. ’ ’ This is the principle which must control here. The receiver here, of his own motion, issued these policies to himself, as receiver, acting in their issuance as the agent of the companies. The companies knew nothing of it till after the property was destroyed. A receiver is not an agent. The very term, receiver, negatives such an idea. He is an indifferent person, holding the property for the parties ultimately entitled. But he receives a commission as receiver, which gives him a direct, personal, pecuniary interest. As agent of the insurance company, it is his duty to look with the clearest and most critical eye to the risk, moral and physical. As a receiver, it is his personal interest to keep in existence the property in his custody, so as to increase his commissions by the increased labor bestowed upon the property. Besides, it is to be noted in this case that an assignment was executed to Wildberger, as [343] assignee, and he therefore had the legal title and possession for the purposes of the trust, under the assignment, in addition to the possession which he had as receiver, which last is really the possession of the court. Counsel on neither side have furnished us with an identical case, and we have been unable to find one. It may very well be that the general principle set forth in Mechem on Agency, secs. 66-68, so manifestly covers the case at bar that it has not been seriously questioned. It -vtas very pertinently observed by Sir W. M. James, L. J., in Panama & S. P. Tel. Co. v. India, Rubber, etc., Co., L. R., 10 Ch. App., 515 (14 Moak’s Eng. R., 759): “The clearer a thing is, the more difficult it is to find any express authority or any dictum exactly to the point. ’ ’ We are clearly of opinion that an insurance agent who has been appointed receiver of property^ cannot, of his own motion, without the consent of his principal, issue, as such agent, to himself, as such receiver, a policy of insurance valid against such principal, because the duties of the two position's are inconsistent, and he does have a direct, personal interest, to the extent at least of his commissions. “A contrivance,” it has been pithily put, ‘ ‘ which reduces the two parties to one, and admits an agent representing antagonistic interests to make a bargain by himself, is so far against the policy of the law that the contract is held to be void, unless the principal chooses afterwards, and with a knowledge of all the circumstances that affect his position, to ratify the act of his agent.” Mercantile, etc., Insurance Co. v. IIope Insurance Co., 8 Mo. App., 411, cited 7 Am. St. R., 281, note. The two parties principal here are the insurance company and Wildberger — acting for himself. And it may with equal force be said that the same human being — subject to the temptations springing from that self-interest which leaves the balance so ‘‘ rarely right adjusted ’ ’ in the best of men — cannot, by some magical process, separate himself into two wholly distinct characters, and, in one character as agent of an insurance company, contract [344] with himself, in another character, as receiver, or otherwise, having always a personal interest in the contract adverse to his principal. It would require a faculty for judicial analysis which could . . . sever and divide A hair twixt north and northwest side— a casuistry too refined and sublimated for the practical affairs of business life, to find in a doctrine that would uphold such a contract, a rule of action safe for common sense dealing. ‘' No man can serve two masters. ’ ’ The decree in each case is, therefore, Affirmed.