Metropolitan Life Ins. Co. v. Gosney

Citation101 F.2d 167
Decision Date31 January 1939
Docket NumberNo. 11249.,11249.
PartiesMETROPOLITAN LIFE INS. CO. v. GOSNEY et al.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Clay C. Rogers, of Kansas City, Mo. (O. C. Mosman, C. Jasper Bell, and Paul A. Buzard, all of Kansas City, Mo., on the brief), for appellant.

Ira B. Burns, of Kansas City, Mo., for appellees.

Before SANBORN, WOODROUGH, and THOMAS, Circuit Judges.

SANBORN, Circuit Judge.

Russell Gosney and Harry Benson, plaintiffs in the court below, were on the evening of September 21, 1935, in Kansas City, Missouri, riding in a Ford V-8 coach belonging to and being driven by C. F. Kelly, an agent of the Metropolitan Life Insurance Company, when Kelly had an accident which resulted in his death and in injury to the plaintiffs. The plaintiffs brought separate actions against the insurance company, alleging that Kelly at the time of the accident was its agent and employee; that he was operating his car in its service and within the scope of his employment; that each of the plaintiffs was a passenger and invitee of the company, and that the accident and their injuries were due to the negligence of Kelly. The company removed the cases to the federal court, wherein it filed answers denying that at the time of the accident the plaintiffs were its passengers and that Kelly was its agent or was operating the car in its service. The cases were consolidated for trial and tried to a jury, which returned a verdict in favor of each plaintiff. From the judgments entered thereon, the company has appealed.

The company asserts that the court erred: (1) in denying its motion for a directed verdict at the close of the evidence; (2) in certain of the instructions to the jury; and (3) with respect to certain rulings on evidence.

No question is raised as to the sufficiency of the evidence of Kelly's negligence or as to the amount of damages. The important question is whether, under the common law of Missouri, liability of the company for the negligence of Kelly was established.

The facts, as we must take them to be, in view of the verdicts of the jury, are, in substance, as follows: Kelly, the driver of the car, was a soliciting and collecting agent of the company. It was his duty to collect the premiums from all of the company's industrial policy holders residing within a designated territory or "debit" assigned to him. His debit was in a thickly settled portion of Kansas City and he was required to call each week upon approximately 250 families. He was licensed as an insurance agent in Kansas and Missouri and was authorized by the company to solicit life insurance inside and outside of his debit. He was not required to solicit insurance outside of his debit. The amount of his compensation depended upon his success in maintaining in force the business within his debit and in procuring new business for the company. He used his car in connection with his work for the company and with its knowledge. He was not required by the company to use his car; none of the expense of its operation was borne by the company; and his compensation was not based upon the use of his car. What means of travel he used in making his collections and soliciting business was apparently a matter of no concern to the company. It was interested in results and not in the particular means by which such results were obtained. Kelly's immediate superior was a Mr. Monahan, Assistant Superintendent of the district which included Kelly's debit. Mr. Magoon was Manager of the district. Kelly received instructions and suggestions from Mr. Monahan with respect to his work. He turned in his collections and made his reports at the district office in Kansas City.

The plaintiff Gosney, at the time of the accident, was a filling station attendant. His place of employment was in the south-west part of the City, at 804 West 47th Street. He roomed with the plaintiff Benson at 3536 Genesee Street, almost directly across the street from where Kelly lived. Benson worked at 1425 Grand Avenue. Kelly and Monahan traded at the oil station where Gosney was employed, and frequently met there for business conferences. At one of these conferences, on or about September 11, 1935, Monahan, in the presence of Gosney, asked Kelly why he could not sell Gosney some insurance. Gosney told Monahan that he would not buy insurance unless Benson, his roommate, bought some; that Benson had been an insurance man and if this insurance was not good enough for Benson it was not good enough for him. Monahan then told Kelly "to take" Gosney and "go get hold of Mr. Benson and sell" them "that insurance". September 21, 1935, was a Saturday. There was no requirement of the company that Kelly work after noon on Saturdays. Kelly met Gosney at about 6 P.M. at Gosney's residence. Gosney was about to drive his car to Benson's place of business to bring him home and had just telephoned Benson to that effect. Kelly told Gosney that he had come to talk insurance. Gosney told him that he did not have time; that he had to go for Benson. Kelly said that that was fine; that he wanted to talk to Benson about insurance; and he said to Gosney, "Come downtown with me in my car and we will get Mr. Benson." Kelly's car was parked across the street from Gosney's house. Kelly drove Gosney to Benson's place of business. Benson was not there, but they found him at a restaurant nearby. Kelly told Benson that he had come to sell him some insurance, and asked him if he had received the raise which he had been expecting. He said that he had, and Kelly then asked him if he would take "that insurance policy". Benson said, "I told you I would." Kelly took two applications from his pocket, but Gosney told him that he did not have any money with him to pay the premium and would have to get it at his house. Kelly said that would be all right; that he had a couple of collections to make and that he would take Gosney home and he could get the money. Kelly was in a hurry because he had to see some people before they left home. Benson, Gosney and Kelly then entered Kelly's car. Kelly drove east and south for some distance, when Benson remembered that he had a suit at the cleaners, and they turned around and went back for that. They then started for home. On the way they stopped at a place "where Kelly said there was a party he wanted to see over there. One of his clients had moved off his debit." Kelly went into an apartment building and was gone several minutes. On his return, he drove out Karnes Boulevard to the point where the accident occurred. This was the direct route home. Kelly apparently intended to make another collection before going home. It is supposed that these collections were of delinquent premiums from policy holders who had moved out of Kelly's debit. Agents such as Kelly collected such premiums from such policy holders for the purpose of putting their policies in condition to be turned over to the agent having the debit to which the policy holders had moved.

The situation at the time of the accident was apparently this: Kelly, the agent of the company, was engaged in soliciting insurance and collecting premiums outside of his debit and had as guests in his car two prospects for insurance. Were these guest passengers the passengers of Kelly, for whose injuries Kelly alone was liable, or were they also passengers of the company, riding at its risk?

The exact question here presented does not appear to have been decided by the courts of Missouri. For the applicable rules of law, the parties rely mainly upon the cases of Chiles v. Metropolitan Life Ins. Co., 230 Mo.App. 350, 91 S.W.2d 164, and Vert v. Metropolitan Life Ins. Co., Mo.Sup., 117 S.W.2d 252, 116 A.L.R. 1381. The Chiles Case involved a collision between the automobile of an insurance agent like Kelly and an automobile driven by Chiles. Chiles sued both the agent and the company, and recovered against both. On appeal, it was urged that the company was not liable, since the agent was using his own car and was not acting within the scope of his employment at the time the accident happened. The recovery against the company was sustained upon the ground that, at the time of the collision, the agent was engaged in collecting premiums for the company within his debit and was using his car in so doing, with the knowledge of the company. In the Vert Case, an agent such as Kelly, who, like Kelly, was attempting to write insurance outside of his debit and was driving home, negligently became involved in a collision in which Vert was injured. Vert sued both the agent and the company, and recovered a verdict against both. The Supreme Court of Missouri reversed the judgment against the company. We quote the following excerpts from the opinion of the court which clearly show its ruling and the basis for it (pages 256, 257, of 117 S.W.2d):

"The decisive point is that Crowe the agent was not on or returning from a trip which the company had directed him to make, nor which was made for the purpose of performing any duty the company required him to do. The trip was made to carry on another kind of activity which was clearly separate and apart from his regular industrial insurance duties.

* * * * * *

"A person, who is ordinarily known as a life insurance agent is certainly not within the classification of a servant or employee subject to direction as to how he shall attempt to accomplish results. His employment is solely for the purpose of bring about contractual relations between his company and others. He works on his own initiative. His principal is properly held not to be liable for physical harm he causes because it has nothing to do with directing his physical movements. Wesolowski v. John Hancock Mut. Life Ins. Co., 308 Pa. 117, 162 A. 166, 87 A.L.R. 783; American National Ins. Co. v. Denke (Tex.Com.App.) 128 Tex. 229, 95 S.W. 2d 370, 107 A.L.R. 409; American Savings Life Ins. Co. v. Riplinger, 249 Ky. 8, 60 S.W.2d 115; American Law Institute,...

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