Hanna v. Minnesota Mut. Life Ins. Co.

• Decision Date: 21 March 1912
• Citation: 145 S.W. 412
• Parties: HANNA v. MINNESOTA MUT. LIFE INS. CO.
• Court: Missouri Supreme Court

145 S.W. 412

HANNA v. MINNESOTA MUT. LIFE INS. CO.

Supreme Court of Missouri, Division No. 2.

March 21, 1912.

1. EMBEZZLEMENT (§ 11)—EMBEZZLEMENT BY AGENT—SALE OF PREMIUM NOTES.

Where a general agent of an insurance company, in violation of a clause of his contract making all funds received by him a trust fund not to be used by the agent for any purpose whatever, but to be remitted to the company, sold first-premium notes taken payable to himself and used the proceeds for his own purposes, after payment of commissions to subagents, without accounting therefor, his appropriations constituted an embezzlement; the fact that the company had accorded him special favors under a prior contract containing the same clause being no authority for him to repeat the offense.

2. INSURANCE (§ 88)—AGENTS—AUTHORITY TO SELL NOTES.

Authority to a general insurance agent to sell premium notes is not permission to convert the proceeds to the agent's own use.

3. EMBEZZLEMENT (§ 11)—ELEMENTS OF OFFENSE—STATUTORY PROVISIONS.

The statute defining embezzlement does not make a failure to account for a trust fund or a fund received by an agent an offense, but the essence of the offense is the wrongful conversion of the fund; and, while a failure to account therefor may be evidence of a conversion, yet the failure to account does not alone constitute an embezzlement of the fund.

4. EMBEZZLEMENT (§ 1)—WHAT CONSTITUTES.

Embezzlement is the fraudulent and felonious appropriation of another's property by persons to whom it has been intrusted, or into whose hands it has lawfully come.

5. EMBEZZLEMENT (§ 11)—CRIMINAL PROSECUTION —CONVERSION OF PART OF SUM CHARGED.

A general agent for an insurance company made no claim for reimbursement for his payments to the company of net premiums on policies written by subagents on applications afterwards rejected by the company, the premiums for which were collected and retained in their entirety by the subagents, and for returns of premiums on rejected applications taken by subagents who had collected but not accounted for the premiums, until after the items he was charged with embezzling had come into his hands through collections on first-premium notes made payable to his own order, and cashed and converted to his own use after allowing the subagents' commissions, all in violation of his contract making such funds fiduciary in character. Rev. St. 1899, § 2531, provides that, as to money or notes, a prosecution for embezzlement of a certain sum may be sustained by showing the embezzlement of any part thereof. Held, that the items converted by him before making such claim were not affected thereby, and constituted an embezzlement.

6. EMBEZZLEMENT (§ 23)—COMPLETENESS OF OFFENSE.

The offense of embezzlement is complete at the time of the conversion, and is not tolled by subsequent claims or efforts at atonement.

7. EMBEZZLEMENT (§ 44)—SUFFICIENCY OF EVIDENCE—INTENT.

In a prosecution for embezzlement, where the admitted facts show a conversion of part of the items charged before any counterclaim was made or entertained by defendant, the jury would be authorized from such conversion to infer a criminal intent.

8. MALICIOUS PROSECUTION (§ 71)—ACTION— QUESTION FOR JURY.

When the facts in an action for malicious prosecution are undisputed, it is the duty of the court to declare their legal effect; but, when they are disputed, it is for the jury to determine the question under proper instructions.

9. MALICIOUS PROSECUTION (§ 18)—PROBABLE CAUSE.

In an action for malicious prosecution, plaintiff's own evidence showed that he was a general agent for defendant insurance company, and that the company had sent a representative to make settlement with various persons whose applications had been rejected, but whose first premiums, paid to plaintiff or his subagents, had not been returned, and admitted a conversion of money collected on first-premium notes payable to himself, and immediately sold and applied to his own uses without accounting therefor, that his claim for amounts alleged to be due him, in cases where he had paid to rejected applicants premiums paid by them to subagents, but not refunded or ever received by him, and on payment to the company of net premiums collected by subagents, and not received by him, was not made until after his appropriation of a part of the items alleged to have been embezzled. Held, that there was probable cause for the prosecution for embezzlement.

10. MALICIOUS PROSECUTION (§ 15)—WANT OF PROBABLE CAUSE—NECESSITY.

An action for malicious prosecution cannot be sustained where there was probable cause.

Appeal from Circuit Court, Jackson County; J. H. Slover, Judge.

Action by John M. Hanna against the Minnesota Mutual Life Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed.

This action for malicious prosecution was brought in the circuit court of Jackson county, resulting in a judgment for plaintiff for $3,500 on the first count and $8,500 on the third count; the second count being dismissed by plaintiff. Defendant appeals.

This proceeding is the result of a charge of embezzlement made by the insurance company against plaintiff, who was a member of the firm of Hanna & Redmon, who were the general agents of the company at Kansas City. Redmon was made a party defendant herein, but has been practically ignored as a party defendant by both sides, and hereafter, for convenience, unless otherwise necessary, we shall speak of the firm as Hanna, and of the company as the defendant.

The contract, so far as necessary to be stated, was as follows:

"This agreement, made this 16th day of January, 1904, between the Minnesota Mutual Life Insurance Company, of St. Paul, Minnesota, first party, hereinafter referred to as the Company, and J. M. Hanna and J. B. Redmon, copartners, as Hanna & Redmon, of Kansas City, in the state of Missouri, second party, hereinafter referred to as the agents of the company, witnesseth: That the company does hereby appoint the said agents for the purpose of establishing and maintaining an agency in the state of Missouri and in Indian Territory (except the following counties in the state of Missouri, viz.: St. Louis, Jefferson, Ste. Genevieve, Perry, St. Francois, Washington, Crawford, Franklin, Gasconade, Warren, St. Charles, Lincoln, Pike, Audrain, Calloway, and Montgomery); the appointment and supervision of local or subagents in said territory and of personally canvassing for applications of insurance on the lives of persons who shall be satisfactory to the company, and for the purpose of collecting and paying over premiums on such insurance when effected in person or through local or subagents and of performing such other duties as may be required by the company in connection therewith. This appointment and its continuance are based on the following terms and conditions, which are agreed to by each party hereto:

"First. The said agents shall act exclusively for the Minnesota Mutual Life Insurance Company, so far as to tender it all risks or applications obtained by them or by any local or subagents appointed by them. They shall earnestly and faithfully solicit applications for insurance and to this end will cause the territory herein mentioned to be thoroughly and ably canvassed by them and by their local or subagents, to be appointed by them as hereinafter provided, for whose fidelity and honesty and indebtedness, if any, to the company they shall be responsible to the company. They shall be governed in the business of their agency strickly by the written and printed instructions which they may receive from time to time from the company, consistent with this agreement and their duties hereunder.

"Second. Said agents shall keep accurate and regular books of account, of all their local or subagents transactions, for or on behalf of said company, and shall on or before the 10th day of each month, or oftener, if required, transmit to said company a report in detail embracing every item of insurance done by them or through or under them by local or subagents, up to and including the last day of the preceding month, or period since the last report, showing the balance due the company, which balance must be remitted with their monthly or more frequent reports, to the company, by check or draft drawn to the order of the Minnesota Mutual Life Insurance Company. Said report shall show a list of all new policies remaining on hand, and all policies not delivered and paid for within ninety days from the dates, respectively, of their receipt, by the agent from the company must be returned to the home office. Said agents agree that all books of account, documents, vouchers, and other books or papers connected with the business of said company shall be the property of the company and at any and all times to be open to the officers of the company, the manager of agencies and other duly authorized representatives, and be freely exhibited for the purpose of examination and shall be immediately returned to the company upon request.

"Third. It is expressly agreed and understood that all moneys or securities received or collected for or on behalf of the company by said agents or by any local or subagents appointed by them, shall be held by the agents hereby appointed as a fiduciary trust, and shall not be used by them for any purpose whatever, but shall be remitted to the company as provided above.

"Fourth. The said agents have no authority on behalf of the company to make, alter, or discharge any contract or waive forfeitures or receive any moneys due or to become due to said company, except on policies and renewal receipts signed by an officer of the company, sent them for collection, or on other written authority. They shall have no authority to accept or receipt for any renewal premium for which the regular receipt signed by the secretary or other officer is not then in their possession, nor shall they have any authority to...