Dillon v. Connecticut Mut. Life Ins. Co.

• Decision Date: 09 March 1876
• Citation: 44 Md. 386
• Parties: ASAHEL H. DILLON, and others v. THE CONNECTICUT MUTUAL LIFE INSURANCE COMPANY.
• Court: Maryland Court of Appeals

44 Md. 386

ASAHEL H. DILLON, and others v. THE CONNECTICUT MUTUAL LIFE INSURANCE COMPANY.

Court of Appeals of Maryland

March 9, 1876

APPEAL from the Circuit Court of Baltimore City.

The case is sufficiently stated in the opinion of the Court.

The cause was argued before BARTOL, C.J., STEWART, GRASON, MILLER and ALVEY, J.

S Teackle Wallis, for the appellant.

John Carson and Charles Marshall, for the appellee.

MILLER J., delivered the opinion of the Court.

A motion has been made to dismiss this appeal which is taken from an order directing the appellant, Dillon, to pay into Court the sum of $21,400.19. After answer filed, all the testimony now appearing in the record, was taken under an order to show cause why the money should not be brought in. We do not propose to state at length the averments of the bill or of the answer, but simply such facts admitted by the pleadings, and established by the proof, as are necessary to a correct understanding and decision of the immediate question before us.

Dillon from the year 1864 until his discharge on the 5th of March 1875, was a general agent of the appellee, a life insurance company, and had the office of his agency in the City of Baltimore. It was part of his duty as such agent, to collect for a certain commission, and remit to the company from time to time, all premiums on policies issued by the company and on renewals thereof. In September, 1874, the company for the better protection of its interests, and those of its policy holders, directed all its agents to deposit all premiums collected by them, less their proper commissions, in some bank which they should select, in a separate account, showing the deposits to be for the sole use of the company, and subject to be drawn by the agents, by checks payable to the order of the company or its officers only. In compliance with this direction, Dillon selected the First National Bank of Baltimore as his depository, and made deposits therein accordingly. But from the 1st of January, 1875, up to the time of his discharge in March following, he did not so deposit all the money he thus collected for the company, but retained in his own possession and deposited elsewhere, the amount now in controversy. The bill which was filed on the 10th of March, 1875, charges that this retention and withholding of the money was with intent to defraud the company, and to convert the money to his own use, and amongst other relief, prays that he may be required to render an account of the money so received by him, and to pay over the same to the company, and forasmuch as the complainant has just cause to believe, and does believe and charge, that if not prevented, he will, pending these proceedings, make way with the money so that it will be wholly lost to the complainant, it prays in the meantime, for an order requiring him to bring the money into Court, or that a receiver be appointed to take charge of the same, to abide the further action of the Court in the premises. It must be conceded, (as it was in fact at bar,) that the bill makes out a case within the jurisdiction of a Court of equity.

In his answer, Dillon admits that he has collected and retained in his own possession, and has now in his hands or under his control, this sum of $21,400.19, but indignantly and emphatically denies and repels all the charges of fraud and assaults upon his integrity, contained in the bill. He avers that when he entered into the company's service, it was agreed he should receive certain specified commissions on all old and on all new business, and that it was expressly agreed, that he should continue to receive this percentage on such business so long as the premiums should continue to be paid to the company; that the mode character and duration of the pay thus to be received by him, were at that time customary in life insurance business, no agent of character or capacity, being willing, except under special circumstances, to undertake the arduous duties of such an agency, and pay out the large commissions required by sub-agents for procuring customers, unless secured in the right to receive his commissions as aforesaid, pending the running of the policies and renewals, whether he remained in the service of the company or not. He then charges that from certain acts of the company or its officers, which are stated at length, and especially by their requiring him to execute a bond, the terms of which would involve an abandonment of the benefits of his contract, and by the declaration to him, of Greene, the company's secretary, that he would not recognize any right of respondent to receive commissions, after ceasing to be agent, and that the company would insist on its right to terminate his agency, and deprive him of such commissions at its pleasure, he became assured it was the purpose and object of Greene and the company, by the exaction of this bond and their subsequent course, fraudulently and illegally to drive him to such action, as would give them a pretext for pretending to remove him from office for cause; that he became finally and fully convinced of this purpose and determination on the part of the company, in December, 1874, and he then on his part, resolved to protect and indemnify himself as far as he was able, against such injustice, and for that reason alone, and not for any fraudulent or improper purpose whatever, he retained and deposited elsewhere than in the bank, and still retains under his control, the money in question, but kept the amount so retained, largely within the damages to which the breach of the contract by the company would entitle him, and is prepared to prove by competent actuaries that this sum is much less than what he will be entitled to receive under the contract for the value and breach thereof. He further states, that before receiving process in this suit, he instituted an action at law in the Superior Court, where the same is now pending, to recover damages from the company for its breach of this contract, over and above the amount so retained, which amount he avers is wholly inadequate to his sufficient indemnity and compensation. He admits the company is entirely able to pay all its just dues, but submits he is in no way compelable on that account to surrender rights which attach to the nature of the transaction, and not to the pecuniary abilities of ...