Hough v. the Ætna Life Ins. Co..

CourtIllinois Supreme Court
Writing for the CourtTHORNTON
Citation57 Ill. 318,1870 WL 6633,11 Am.Rep. 18
Decision Date30 September 1870
PartiesROSELL M. HOUGHv.THE ÆTNA LIFE INSURANCE COMPANY.

57 Ill. 318
1870 WL 6633 (Ill.)
11 Am.Rep.
18

ROSELL M. HOUGH
v.
THE ÆTNA LIFE INSURANCE COMPANY.

Supreme Court of Illinois.

September Term, 1870.


[57 Ill. 319]

APPEAL from the Superior Court of Chicago; the Hon. WILLIAM A. PORTER, Judge, presiding.

Messrs. WILSON & VALLETTE, for the appellant.

Messrs. BRACKETT, WAITE & DRISCOLL, for the appellee.

Mr. JUSTICE THORNTON delivered the opinion of the Court:

Wallis, as principal, and appellant, as his surety, executed the bond sued on, with the condition annexed, that Wallis, as a local agent of the company, would pay over all moneys received by him, less his commissions.

Raymond, for whose benefit the suit was brought, was the general agent of the insurance company, and, by his contract, was bound to pay over all moneys received in the general

[57 Ill. 320]

management of the affairs of the company; and had paid, before suit, the amount of the defalcation of Wallis, who was bound to make monthly returns; and when he failed to pay the money, he gave to Raymond promissory notes to be paid within a few days. These notes had not been surrendered at the time of the trial.

Three questions arise:

First. Was the settlement of the delinquencies of the local agent, by the general agent, a payment and discharge of the bond, so as to prevent subrogation.

Second. Is the security released because no notice was given to him of the defalcation of the principal.

Third. Should the notes have been surrendered before judgment?

Raymond was not co-surety, and it can not properly be assumed that he paid the defalcation as such. Suretyship is an accessory agreement, by which one person binds himself for another already bound. Whereas the liability of the general agent was distinct from, and anterior to the liability of the obligors to the bond.

The principle of subrogation has special application to the facts of this case.

The rule is, that if the person who pays the debt, is compelled to pay, for the protection of his own interests and rights, then the substitution should be made. A mere stranger or volunteer can not thus be subrogated to the creditor's rights.

By the terms of the agency, the principal agent was responsible for all premiums. This liability arose, not only by contract, but from his relation to the company, and to the local agents, and his right to appoint them. His reputation was involved, and his position could alone be maintained by the regular monthly payment of all sums received by the local agents. He was compelled to pay, not only by agreement prior to the date of the bond, but for the protection of his own rights.

The obligation, then, of the general agent to the company, was wholly independent of the obligation of the local agents.

[57 Ill. 321]

In the payment of the defalcations of the local agent, the general agent only discharged his own liability. He only complied with his own agreement, for the purpose of maintaining his position.

He had the general management of the affairs of the company; upon him rested the entire responsibility; to him alone did the company look for the payment of premiums, and the local agent was his appointee....

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19 practice notes
  • American Nat. Bank and Trust Co. of Chicago v. Weyerhaeuser Co., Nos. 81-2620
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 26 Octubre 1982
    ...222 Or. 169, 352 P.2d 583, 590-91 (1960). 18 Particularly instructive in this respect is the decision in Hough v. Aetna Life Ins. Co., 57 Ill. 318 (1870). In Hough, the general agent of an insurance company paid premiums owed the company by a local agent. Although noting that both the local......
  • Ohio Nat. Life Ins. Co. v. Bd. of Educ. of Grant Cmty. High Sch. Dist. No. 124, No. 27330.
    • United States
    • Supreme Court of Illinois
    • 14 Septiembre 1944
    ...interest and rights, then the substitution should be made. Bennett v. Chandler, 199 Ill. 97, 64 N.E. 1052;Hough v. AEtna Life Ins. Co., 57 Ill. 318, 11 Am.Rep. 18. In the Chandler case [199 Ill. 97, 64 N.E. 1055] it was said that ‘a stranger within the meaning of this rule is not necessaril......
  • J. D. O'Malley & Co. v. Lewis, 24639.
    • United States
    • United States State Supreme Court of Washington
    • 15 Enero 1934
    ...reimburse the principal. Fitzpatrick v. Letten, 123 La. 748, 49 So. 494, and note in 17 Ann. Cas. 204; Hough v. AEtna Life Insurance Co., 57 Ill. 318, 11 Am. Rep. 18; Bank of Midland v. Harris, 114 Ark. 344, 170 S.W. 67, Ann. Cas. 1916B, 1255; Murrell v. Henry, 70 Ark. 161, 66 S.W. 647; Fre......
  • Brinckerhoff v. Holland Trust Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 5 Febrero 1908
    ...70 Ark. 161, 66 S.W. 647; Stoller v. Coates, 88 Mo. 514; Nichols v. Wadsworth, 40 Minn. 547, 42 N.W. 541; Hough v. Etna Life Ins. Co., 57 Ill. 318, 11 Am.Rep. 18. So a fire insurance company bound by its policy to make good a loss caused by a fire resulting from the negligence of a third pa......
  • Request a trial to view additional results
19 cases
  • American Nat. Bank and Trust Co. of Chicago v. Weyerhaeuser Co., Nos. 81-2620
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 26 Octubre 1982
    ...222 Or. 169, 352 P.2d 583, 590-91 (1960). 18 Particularly instructive in this respect is the decision in Hough v. Aetna Life Ins. Co., 57 Ill. 318 (1870). In Hough, the general agent of an insurance company paid premiums owed the company by a local agent. Although noting that both the local......
  • Ohio Nat. Life Ins. Co. v. Bd. of Educ. of Grant Cmty. High Sch. Dist. No. 124, No. 27330.
    • United States
    • Supreme Court of Illinois
    • 14 Septiembre 1944
    ...interest and rights, then the substitution should be made. Bennett v. Chandler, 199 Ill. 97, 64 N.E. 1052;Hough v. AEtna Life Ins. Co., 57 Ill. 318, 11 Am.Rep. 18. In the Chandler case [199 Ill. 97, 64 N.E. 1055] it was said that ‘a stranger within the meaning of this rule is not necessaril......
  • J. D. O'Malley & Co. v. Lewis, 24639.
    • United States
    • United States State Supreme Court of Washington
    • 15 Enero 1934
    ...reimburse the principal. Fitzpatrick v. Letten, 123 La. 748, 49 So. 494, and note in 17 Ann. Cas. 204; Hough v. AEtna Life Insurance Co., 57 Ill. 318, 11 Am. Rep. 18; Bank of Midland v. Harris, 114 Ark. 344, 170 S.W. 67, Ann. Cas. 1916B, 1255; Murrell v. Henry, 70 Ark. 161, 66 S.W. 647; Fre......
  • Brinckerhoff v. Holland Trust Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 5 Febrero 1908
    ...70 Ark. 161, 66 S.W. 647; Stoller v. Coates, 88 Mo. 514; Nichols v. Wadsworth, 40 Minn. 547, 42 N.W. 541; Hough v. Etna Life Ins. Co., 57 Ill. 318, 11 Am.Rep. 18. So a fire insurance company bound by its policy to make good a loss caused by a fire resulting from the negligence of a third pa......
  • Request a trial to view additional results

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