French v. People

• Decision Date: 13 May 1895
• Citation: 40 P. 463,6 Colo.App. 311
• Parties: FRENCH v. PEOPLE.
• Court: Colorado Court of Appeals

40 P. 463

6 Colo.App. 311

FRENCH v. PEOPLE.

Court of Appeals of Colorado

May 13, 1895

Error to district court, Arapahoe county.

W.B French was convicted of a violation of the insurance law, and brings error. Reversed.

On August 14, 1893, the Crescent Flouring Mills, in the city of Denver, the property of the Colorado Milling & Elevator Company, were destroyed by fire, on which the owners had a policy of insurance for $10,000, issued by the Millers' National Insurance Company of Chicago. Fifteen or sixteen other insurance companies had issued policies and were interested in the loss. They had appointed a committee of three to ascertain the loss preparatory to an adjustment. The Millers' National Insurance Company was not represented by such committee, but sent French (plaintiff in error) as its agent to ascertain and adjust the amount for which it was liable on its policy. French was not in the general employment of the company as agent or otherwise. He was a professional adjuster,--an expert particularly as to the value of mills and milling machinery,--and took employment generally from those requiring his services. The Millers' National Insurance Company had no agency or office in this state. The application for the insurance was made by letter to its home office in Chicago; accepted; and the policy sent by mail. French, on his arrival, was not made a member of the adjusting committee, but met and advised with the committee that gladly availed itself of his superior knowledge of the subject to be determined. This was the extent of appellant's participation in the affair. An information was filed against him for a violation of the statutes of the state concerning insurance. He was arrested; tried to the court, without a jury; convicted; and a fine of $500 imposed and the case brought to this court by writ of error.

Vincent D. Markham and Myron H. Beach, for plaintiff in error.

Eugene Engley, Atty. Gen. (H.T. Sale, of counsel), for defendant in error.

REED P.J. (after stating the facts).

Counsel for appellant attack the information in argument. The first assignment of error is "that the information does not set forth or state any facts constituting an offense against the defendant." Although it is not as full and explicit and as technically correct as it might have been, it appears to have been sufficient in substance. In my view of the case, it may be determined upon other and more satisfactory grounds. Consequently the supposed error will not be further regarded.

The statute appellant was charged with violating is section 16 of "An act to establish an insurance department in and for the state of Colorado, and to regulate the insurance companies doing business therein," Gen.St. c. 55, § 16 as follows: "It shall be unlawful for any person, company or corporation in this state, either to procure, receive or forward applications for insurance in or to issue or to deliver policies for any company or companies not having complied with the provisions of this act, or to adjust any loss, or in any manner, either directly or indirectly, to aid in the transaction of the business of insurance with any such company, unless duly authorized by such company and licensed by the superintendent of insurance, in conformity to the provisions of this act, and any person violating the provisions of this section shall be liable to a penalty of $500, for each and every offense." The intention of the legislature and the wisdom and necessity of the law are obvious; its object, to protect the people against irresponsible foreign insurance companies, and subject all foreign insurance companies to the supervision of the state insurance department, and, by license fees, provide a fund to defray the expenses of such department. For the purposes of this opinion, I am willing to adopt, as far as it goes, the statement as to the scope, object, and intention of the act as made by the learned attorney general in his printed argument: "The object is to regulate insurance,--a business that so intimately concerns the whole business world; to prevent persons who have no proper qualifications from engaging in the business; and to force all companies doing business in this state to pay their just quota of the fees which make up the insurance fund." Again: "But the principal object of our statute seems to be to protect the insured from fraud, and to cause all companies doing an insurance business to contribute to the insurance fund, which in turn is to be used to prevent this very fraud," etc. In this definition there is evidently an important omission in the second clause. Not all companies doing an insurance business within the state. There is one line of argument and construction of the statute that should not pass unnoticed, as it may have, more or less, influenced the decision, though rather vaguely and indefinitely expressed. It is, in effect, that, by reason of our statute, contracts of insurance made by residents of the state with foreign insurance companies, though legal where made, are a violation of the state law. This contract of insurance was made by the resident milling company, by correspondence, and was made at the home office of the insurance company in the city of Chicago. The attorney general says: "If the argument of counsel for plaintiff in error is to prevail, then, in order to evade the requirements of the statute, and to escape payment of dues to the superintendent of insurance, it would only be necessary to issue policies from offices outside of the state, and pay losses at the place where the policy was issued, and the adjustment and the negotiations leading up to and following it, and the fact that the contract of insurance affects property situate in Colorado, and premiums are paid by its citizens, may be laid out of the case, as being matters not properly belonging to 'the business of insurance.' " Again: "It is no defense to say that the policy was made out in Chicago, and mailed to Denver, and that the adjustment of the loss was finally consummated in Chicago, and the money paid there. The contract of insurance from the time it was received in Denver was in force here in this state until the destruction of the property insured, and the right to recover the amount of the loss existed at all times in this state, from the time of the loss until the time of the payment. It is of no consequence whether the final act of adjustment in the payment of the loss occurred in Chicago, or here, in Denver. The business of insurance was being carried on here, in Colorado, unlawfully, by the Millers' National Insurance Company, from the time it replied to Mr. Mullen's first letter up to the time of the adjournment of the committee of adjustment from Denver to Chicago; and all the acts of plaintiff in error in aid or abatement of that business were in...