Isaac H. Blanchard Company v. Hamblin

• Decision Date: 04 March 1912
• Parties: ISAAC H. BLANCHARD COMPANY, Respondent, v. F. B. HAMBLIN, Manager of the Printers' and Publishers' Reciprocal Underwriters at Printers' Exchange, Appellant
• Court: Kansas Court of Appeals

144 S.W. 880

162 Mo.App. 242

ISAAC H. BLANCHARD COMPANY, Respondent, v. F. B. HAMBLIN, Manager of the Printers' and Publishers' Reciprocal Underwriters at Printers' Exchange, Appellant

Court of Appeals of Missouri, Kansas City

March 4, 1912

Appeal from Jackson Circuit Court.--Hon. Jas. E. Goodrich, Judge.

AFFIRMED.

Judgment affirmed.

Battle McCardle for appellant.

(1) By the terms of the contract between plaintiff and the other members of the association, it was made a condition precedent to the taking effect of any insurance, and the attaching of any liability on the part of a member, that the association should have one hundred or more subscribers. At no time did the association have one hundred subscribers. For such cause this action must fail. Railroad v. Newton, 74 Mass 596; Literary and Scien. Ins. v. Prescott, 40 N.H 330; Railroad v. Sullivan, 57 Ga. 240; Phillips v. Cov. and Cin. Bridge Co., 59 Ky. 219; Bridge Co v. Chapin, 6 Cush. 50, 60 Mass. 50; Rutz v. Esler and Ropriquit Co., 3 Ills. App. 83; Turner v. Baker, 30 Ark. 186. (2) Defendant is not a party to the contract sued on. The only parties to a contract are those named in it as such, or who sign it, or their privies. No judgment against this appellant can be sustained. Dicey Parties to Actions (2 Ed.), 223; Bates v. Knorr, 12 Misc. (N. Y.) 395, 33 N.Y.S. 691; Concentrating Works v. Ackerman, 6 App.Div. (N. Y.) 540, 39 N.Y.S. 585; Stieglitz v. Belding, 20 Misc. (N. Y.) 297, 45 N.Y.S. 670; Biggerts v. Hicks, 18 Misc. (N. Y.) 593, 42 N.Y.S. 236; Gough v. Satterlee, 32 A.D. 33, 52 N.Y.S. 492; Lumber Co. v. Mundy, 62 N. J. L. 16, 55 L. R. A. 193, 42 A. 1063; Evans v. Hooper, L. R. 1 Q. B. Div. 45; Gray v. Pearson, L. R. 5 C. P. 568. (3) The provision authorizing suit against F. B. Hamblin, manager, etc., is void: a. As in violation of code of civil procedure of Missouri, R. S. 1899. b. As contrary to public policy. c. As ousting courts established by law of jurisdiction. White v. First Nat. Bank, 220 Mo. 717; State ex rel. v. Staed, 64 Mo.App. 28; Moore v. Stemmons, 119 Mo.App. 162; Douthit v. Stinson, 63 Mo. 268; Richard v. Ins. Co., 31 Mo. 518; Gray v. Pearson, L. R. 5 C. P. 568; Evans v. Hooper, L. R. 1 Q. B. 45; Woerther v. Miller, 13 Mo.App. 567; Hadley v. Berneo, 103 Mo.App. 549; Dennis v. Bailey, 104 Mo.App. 638; Diffenderfer v. Rowden, 83 Mo.App. 268; Hamilton v. Ins. Co., 72 Mass. 174; Cobb v. Ins. Co., 72 Mass. 192; Insurance Co. v. Morse, 20 Wallace, 445; Dudley v. Mayhew, 1 N.Y. 184; Sanford v. Acc. Assn., 86 Hun, 380, 147 N.Y. 326, 41 N.E. 694; Crawford v. Lockwood, 9 How. Prac. 548; In re N. Y. L. and W. R. R. Co., 98 N.Y. 447. (4) Plaintiff and all subscribers named as delinquent are corporations chartered for and engaged in the business of printing. None are authorized to engage in the business of insurance or to write contracts of insurance. Neither plaintiff corporation nor the corporations named as delinquent were competent to become members of an association or partnership formed for any purpose. All contracts made by plaintiff and the corporations herein are ultra vires and void. Lumber Co. v. Oliver, 65 Mo.App. 435; Mill & Lumber Co. v. Sims, 197 Mo. 507. (5) Plaintiff and all subscribers named as delinquent, except two, were foreign corporations. None had complied with the insurance laws of the state of Missouri. None had been licensed to write contracts of insurance, or to engage in the insurance business, by the superintendent of the insurance department of Missouri. All contracts so made were void as between the members of this association. R. S. 1899, secs. 7945, 7948, 7950, 7951, 7952, 7957, 7958, 7963, 7979, 7989, 7990, 8002; State v. Stone, 118 Mo. 388; Swing v. Cider & Vinegar Co., 77 Mo.App. 391; Insurance Co. v. Smith, 73 Mo. 368; State v. Alley, 96 Miss. 720, 51 So. 467; Jalonick v. Oil Co., 66 S.E. 815; Fort v. Georgia, 92 Ga. 8, 18 S.E. 14; People v. Ackerman, 51 Oh. St. 163, 37 N.E. 828.

Lathrop, Morrow, Fox & Moore and Boyle & Howell for respondent.

(1) When one hundred or more parties willing to enter into such an insurance arrangement as this signed the contract, agreeing to do so, they became subscribers, and it was not necessary that one hundred or more policies should be accepted in order to make the parties who had signed the agreement and accepted policies subscribers. In this case, one hundred and seven parties subscribed (admitted by appellant, page 9 of his brief) an agreement to enter into such an arrangement before any policies were issued. (2) There is no merit in the contention that the defendant was not a party to the contract, and so cannot be sued. The contract provides that he shall be sued. It appears that the subscribers arranged this inter-indemnity insurance for their own protection and by the agreements, appointed Mr. F. B. Hamblin manager, as a matter of convenience to themselves. The cases cited by appellant under this heading do not apply to the facts in this case. The delinquent subscribers were sued in this case strictly in accordance with the terms of the agreement which they entered into of their own volition, and of which they received and accepted the benefits. They had a right to make such private contracts as this. It is guaranteed by the Fourteenth Amendment to the Constitution of the United States. And it is a well known rule of law that where a contract is capable of two constructions, one making it valid, and the other void, the former ought to be adopted. Hammond v. Haskell, 112 P. 575; Lippert v. Theater Co., 129 N.W. 409. (3) Appellant seeks to avoid liability for the delinquent subscribers upon the theory that the provision authorizing suit against the manager is void, in that it is a violation of the code of procedure of this state. Apparently, an English case is cited in support of this contention, but it appears, upon an examination, that the facts in that case are not even similar to the facts in this case. White v. Bank, 320 Mo. 717.

OPINION

JOHNSON, J.

This is an action on a policy of fire insurance issued by an unincorporated association of printers and publishers, organized and operated, not for profit but for the purpose of providing mutual insurance at actual cost. The answer pleaded defenses the nature of which will be disclosed in our discussion of the different issues we are called upon to determine. The learned trial judge who tried the case without a jury and, doubtless, regarded it as a case in equity, rendered judgment for plaintiff in accordance with the prayer of the petition. Defendant appealed.

The facts are not in controversy and may be stated as follows:

In 1906, certain corporations, firms and individuals organized under the name of "The Printers' and Publishers' Reciprocal Underwriters at Printers' Exchange" for the purpose of insuring each other's business establishments. One hundred and seven different concerns operating in the principal cities of the Union became members of the association by signing the preliminary written agreement by which it was created. This agreement stipulated "for maintaining an office where policies of fire insurance may be underwritten for the firms, corporations or individuals herein called subscribers," for the supervision of the business by a committee of subscribers elected annually; and for the appointment of F. B. Hamblin as manager with headquarters at Kansas City. The manager's duties thus were defined: "The manager's duties shall be to underwrite for the subscribers in his own name, as manager, policies of insurance against loss or damage by fire or lightning, to reinsure same, to make cancellations, and changes in the amounts and conditions of same; to collect all sums due from subscribers by virtue thereof, security for which he must furnish a good and sufficient bond; to adjust and settle any loss, and to perform such other acts in relation to such policies as the subscribers could themselves do. . . . The manager may commence and prosecute any proceeding at law in connection with any policy issued by him which he may deem proper and may compromise, settle or withdraw the same, also may appear for the subscribers in case of any proceedings at law being taken against them in connection with any policy, and in their name defend, compromise or settle same."

Other stipulations characterize the organization as one formed not for profit but to provide insurance to its members at cost.

Of the one hundred and seven signatory members, five were dropped by the association at the beginning and no policies were issued to them. One of the subscribers returned his policy the day it was issued. This reduced the number of those who accepted policies to one hundred and one. There were five of those who returned their policies shortly after accepting them without paying anything for the insurance during the time the policies were in force. The preliminary agreement contained the provision: "Nothing herein shall be construed to obligate in any manner the subscriber hereto, until he shall elect to become a policy holder and thereafter only while holding a policy."

Before the issuance of a policy to a member he was required to fill out and sign an "information blank" which contained the clause, "This insurance is to take effect when this exchange has one hundred or more subscribers and not before," and the policies defined subscribers as "those and only those that have executed an agreement (hereby made a part hereof) which vests in F. B. Hamblin of Kansas City, Missouri, called the manager, the power to underwrite and issue this contract for them, and have accepted contracts of insurance against loss or damage by fire, issued by this exchange, and whose contracts are then in force." And further provided "if a subscriber...