Esterly-Hoppin Co. v. Burns
| Decision Date | 24 November 1916 |
| Docket Number | No. 19949[85].,19949[85]. |
| Parties | ESTERLY-HOPPIN CO. v. BURNS. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Ramsey County; Olin B. Lewis, Judge.
Action by the Esterly-Hoppin Company against Fitzhugh Burns. From an adverse judgment, plaintiff appeals. Reversed.
Defendant is a broker in liability insurance and surety bonds. Both defendant and another broker, as subagents of plaintiff, were endeavoring to procure a policy of liability insurance from one Olson. It was in fact procured by one of them and was written by plaintiff. Both brokers claimed the whole commission. The jury found that defendant procured the insurance and was entitled to the commission. There is evidence to sustain such a finding.
The trial court, after first instructing the jury generally that before an insurance broker can recover a commission he must prove that he was the procuring cause which resulted in the writing of the insurance, then instructed them that, if defendant found Olson as a customer and opened negotiations for insurance and did not abandon such negotiations, then he procured the insurance and was entitled to the commission. This instruction was erroneous.
Where two brokers are competing to secure the same customer for the same principal, the one through whose efforts the business is secured is entitled to the commission, though he was not the first to solicit the customer, and though the one who first did so has not abandoned the quest.
The error mentioned was not cured by other portions of the charge, and was not one of the character which counsel was obliged to call to the attention of the court at the trial. Barrows, Stewart & Ordway, of St. Paul, for appellant.
Morphy, Bradford & Cummins, of St. Paul, for respondent.
In 1910 O. H. Olson obtained a contract to build the Minnesota state prison. It was necessary that he give a surety bond, and he also expected to secure liability insurance. Plaintiff was a brokerage agency in Minneapolis, engaged in writing both liability insurance and surety bonds. Defendant and Walter T. Lemon were both brokers in St. Paul. Each represented one or more companies as agent, and also acted in some matters as subagent for plaintiff. Both Lemon and defendant were competing for Olson's bond business. In March, 1910, defendant solicited also his liability insurance for the Maryland Casualty Company, and, believing that Olson would accept the same, had plaintiff write a policy which he delivered to Olson. Olson declined to receive it, stating that he was not ready to take liability insurance. Defendant returned the policy to plaintiff with explanations, and plaintiff acknowledged receipt with a letter ‘trusting that this matter does not get out of your hands, and that we may receive application for rewriting policy in the near future.’ Defendant ‘kept after the business.’
About May, 1910, the Maryland Company commenced writing surety bonds and Lemon became its general agent for that purpose, plaintiff remaining its general agent for liability insurance. Lemon then proceeded to solicit Olson's bond for the Maryland Company, and he secured part of the bond. Plaintiff claims that Lemon solicited the liability insurance also for the Maryland Company, and secured Olson's consent to accept it. Defendant secured part of the bond for another company. He claims that it was he that finally procured Olson's consent to place the liability insurance with the Maryland Company. The liability insurance was secured. The policy was issued by plaintiff and delivered to defendant for delivery to Olson, and was so delivered, and Olson accepted it. All parties acted in good faith throughout, but after the transaction was over they disagreed as to their rights. Defendant and Lemon both claimed from plaintiff the subagent's commission for procuring the liability policy. Plaintiff at first refused to pay to either until the conflicting claims could be settled. Later plaintiff, regarding Lemon as entitled to the commission, credited his account with the amount of it. Defendant, also claiming the commission, retained some small amount due from himself to plaintiff to apply thereon. Plaintiff sued him for this amount and defendant counterclaimed for the amount of the commission. The jury found for defendant and plaintiff appeals.
Plaintiff makes two contentions: First, that the evidence does not sustain the verdict; and, second, that the court erred in the charge to the jury.
[1] 1. The first contention cannot be sustained. There was some conflict in the testimony. There was evidence from which the jury might find that defendant in fact procured the policy and was entitled to the commission.
[2] 2. The exception to the charge presents a more serious question. The court properly gave the general instruction that before an insurance broker can recover a commission he must prove that he was ‘the procuring cause of the transaction which resulted in the writing of the policy.’ But in applying the general principle to the facts of this case the court said, ‘If * * * you find that the defendant, Burns, found Olson as a customer for liability insurance and began negotiations with him therefor, and that thereafter either the plaintiff or Lemon closed these negotiations without the aid of Burns, then the commission belongs to Burns, even though he did not close the transaction, and your verdict would be for the defendant for the reason that under those circumstances you would necessarily find that Burns had brought Olson and the plaintiff together, and that he in fact had procured the insurance to be written,’ and he closed this subject with the statement that, ‘if Burns found Olson as such customer for insurance and...
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