Beechley v. Mulville

• Decision Date: 03 February 1897
• Citation: 70 N.W. 107,102 Iowa 602
• Parties: N. K. BEECHLEY v. JOHN MULVILLE, et al., Appellants
• Court: Iowa Supreme Court

70 N.W. 107

102 Iowa 602

N. K. BEECHLEY v. JOHN MULVILLE, et al., Appellants

Supreme Court of Iowa, Des Moines

February 3, 1897

Appeal from Linn District Court.--HON. W. P. WOLF Judge.

ACTION for damages because of a conspiracy to destroy plaintiff's business as an insurance agent. Judgment for plaintiff, and the defendants appealed.

Reversed.

Jamison & Burr and A. R. West for appellants.

Smith & Smith and C. J. Deacon for appellee.

OPINION

GRANGER, J.

I.

The defendants are, besides John Mulville, Henry Bennett, the Detroit Fire & Marine Insurance Company of Detroit, Mich and the Phoenix Insurance Company of Hartford, Conn. Charles T. West was named as a defendant, but not served. The plaintiff was an insurance agent at Cedar Rapids, Iowa and on the fourteenth day of November, 1883, he became a member of the "compact" or organization styled the Cedar Rapids & Marion Underwriters' Union. The agreement is embraced in a writing, denominated "Compact," the first division of which is as follows:

"Compact.

"The Cedar Rapids and Marion Underwriters' Union.

"We the undersigned, local agents of Cedar Rapids and Marion, Iowa agree to enter into the following compact, with Henry Bennett, as manager, who shall be required to give a good and sufficient bond in liquidated damages not to engage in the business of fire insurance as a local agent, directly or indirectly, in Cedar Rapids or Marion, for a period of not less than three years from the date of his vacation of office, the expense of such compact and manager to be paid by the companies on a pro rata basis of receipts. The duties of said manager to be as follows: (1) To fix rates upon all risks in Cedar Rapids and Marion and vicinity of each, which he shall promulgate and furnish to all agents at once. (2) He shall pass upon and approve by his official stamp (which shall bear no erasures or alterations) all the monthly accounts, abstracts, and daily reports, reports of transfers of location of risks, and indorsements, and mail same to various companies or general agents; also, all policies, renewal receipts, or certificates of insurance on which a return premium is charged to the company, or allowed by the agent. (3) He shall investigate all irregularities which may come under his notice, and have power to examine the books and papers, and take the written statement of any agent, under oath, and enforce such penalties for violation as are hereinafter prescribed in this agreement; and in case of failure or refusal of any agent to pay any penalty assessed under this clause, within ten days, the manager shall have power, and it shall be his duty, to take possession of the books and papers of the company or companies in such agency, providing the manager shall first obtain from such company or companies a written order therefor, and hold the same subject to their order, it being conditioned only that the infliction of a money penalty on an agent or agents shall cover all offenses prior thereto, except that nothing herein shall prevent the manager from peremptorily ordering canceled any policy or policies theretofore issued in violation of this compact and pledge, and prohibiting such agent or agents from writing upon the risk or risks for one year thereafter; and any risk shall be considered as an offense, irrespective of the number of policies issued thereon. Now, therefore, in consideration of the appointment of such manager, we, the undersigned local agents, do hereby agree to and associate ourselves together, under the name of the Cedar Rapids and Marion Underwriters' Union, with the following organization, pledge, and penalties."

The other divisions of the compact are under the headings "Organization," "Pledge," and "Penalties." After some provisions as to organization is the following, as a part of the pledge: "We also agree strictly and honorably to adhere, both in letter and spirit, to the following pledge, viz.: Section 1. That we will not write a risk until a rate has been fixed by the manager, and will adhere to all the rates fixed by him; that we will not issue a policy ourselves or cause insurance to be written by any company at less than said fixed rates; and, in the event of binding an unrated risk, we will submit an application for rating thereon to the manager, upon the same or next succeeding business day to that on which such risk was bound." After other pledges is the subject of penalties, under which it is provided that an offending member may be required to cancel a policy under which an offense is committed, and shall be prohibited from writing upon the same risk for one year. Then follows a provision for the imposition of fines for a first and second offense, and for the third offense the removal of all companies from the offending member, and expulsion from the compact.

This compact is signed by some thirty-five agents and two insurance companies, not, however, including either of the defendant companies. The defendant Bennett was unanimously accepted as manager, and assumed the duties of the office December 1, 1883. The plaintiff was one of the signers of the compact. Another compact, consisting of members of the former compact, seems to have been formed July 28, 1884, signed by some nineteen of the agents, including the plaintiff, designed to compete "with non-compact insurance companies," with the same person as manager. The defendant Mulville was special agent for the Detroit Fire & Marine Insurance Company, and West, the defendant named, but not served, was such agent for the other defendant company. Prior to November, 1889, the plaintiff had been the local and soliciting agent of the two defendant companies, and other companies at Cedar Rapids, Iowa and, by selling insurance at less than the prescribed rate under the compact, a fine had been imposed, and also other penalties as to writing insurance. Plaintiff refused to pay the fine, and insisted upon his right to solicit insurance where he pleased. It is averred in the petition that, because of this, defendant Bennett and the other defendants confederated together to destroy his business as an insurance agent, and that, because of such confederation, the defendant companies, and the others for whom he was acting, canceled their contracts with him, because of which his business was lost, which he claims was worth one thousand dollars per year. The defendants, all except West, answered by a general denial, and the Phoenix Insurance Company pleaded its contract of employment with plaintiff, as in writing, and its right to discharge him at any time it pleased. It also pleaded an estoppel because of plaintiff's membership is the compact.

The jury returned special findings to the effect (1) that plaintiff was a party to the compact at the time he received his appointment from the defendant companies; (2) that, at the time he received the appointment, he did not agree to conform to the rules and regulations of the compact; (3) that he did violate the rules of the compact before the agencies were taken from him; (4) that the agencies were not taken because he refused to comply with the rules of the company as provided in his agreement, but that other reasons existed therefor; (5) that a combination or conspiracy was entered into between the defendant companies and others for the purpose of injuring plaintiff; (6) that plaintiff had no contract with the defendant companies to be their agent, except during their pleasure; (7) that plaintiff was injured, in the taking away of the agencies of the defendant companies, otherwise than in the privilege of soliciting insurance for them in the future as in the past, and the loss of the probable earnings in the way of commissions he might have earned had he been permitted to continue as agent; and (8) that the combination to injure his business was formed after plaintiff's refusal to comply with the regulations of the compact.

As to the second finding, that plaintiff, at the time he received his appointment from the defendant companies, did not agree to conform to the rules and regulations of the compact, nothing more can be intended that it is not so specified in the agreements, which are in writing. If more was intended, it would be without support in the evidence. The fact clearly appears that these agencies were taken while plaintiff was a member of the compact, and observing its regulations, and that these agencies were a part of his business as a member of the compact.

As to the fourth finding, that the agencies were not taken from plaintiff because he refused to comply with the rules of the companies, as provided in his agreement, but for other reasons, the record will only justify the conclusion that the reason for which they were taken is the violation of the rules of...