Indemnity Ins. Co. v. Midwest Transfer Co., 10075.
| Decision Date | 10 October 1950 |
| Docket Number | No. 10075.,10075. |
| Citation | 184 F.2d 633 |
| Parties | INDEMNITY INS. CO. OF NORTH AMERICA v. MIDWEST TRANSFER CO. OF ILLINOIS. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Michael A. Gerrard, Chicago, Ill., for appellant.
Ferre C. Watkins, Charles F. Meyers, Chicago, Ill., for appellee.
Before MAJOR, Chief Judge, and KERNER and LINDLEY, Circuit Judges.
Defendant, Midwest Transfer Company, appeals from a judgment entered against it in favor of plaintiff, Indemnity Insurance Company of North America, for the balance of the premium allegedly due on a fleet insurance binder issued by it to Midwest through the offices of H. E. Cotter and Co., Inc., a licensed insurance broker. Cotter, in 1946, had placed defendant's public liability, property damage and workmen's compensation coverage with the Preferred Accident Company of New York, but Preferred's cancellation of this coverage, effective as of April 4, 1947, made it necessary for Midwest to obtain insurance elsewhere. Cotter, after having attempted unsuccessfully to place the insurance with Travellers and Hartford, informed defendant that Indemnity would carry it, at the same time, according to the testimony of Ratner, Midwest's president and general manager, representing that he, Cotter, was agent for the latter company, although, as the lower court found, he had in fact, "no express or implied authority" to act as Indemnity's agent. Ratner thereupon asked Cotter to secure additional insurance on certain personal automobiles owned by Midwest or its employees, and, on March 12, 1947, binders insuring these automobiles were received from Indemnity, each of which recited that, "This binder is not valid unless signed by a duly authorized Agent of the Company." Directly above this statement appeared the words "H. E. Cotter and Company, Agency" and the signature, "Edgar L. Warner, Agent." Ratner testified further that, in the course of a visit to the Jewel Tea Company, whose insurance coverage had been placed by Cotter with Indemnity, he was shown the policy issued to Jewel Tea, on which appeared, on the line designated "Agent," the words "H. E. Cotter & Co.," and that he was again assured by Cotter that the latter was agent for Indemnity.
On April 3, 1947, after Cotter had provided Calvin, Indemnity's Chicago representative, with lists of Midwest's trucks and equipment and the various states in which insurance coverage was desired, Calvin told Cotter that the rate for public liability and property damage coverage would be $4.50 per $100 of gross receipts, and, on April 8 or 9, a written binder incorporating the $4.50 rate was delivered to Cotter. On April 16, 1947, the insurance was mutually cancelled, the cancellation to take effect May 17, 1947.
On November 20, 1947, after an audit of Midwest's gross receipts and payrolls, Indemnity billed Midwest for the premium claimed to be due, based on the $4.50 rate. Midwest, however, insisted that the contracted rate was no more than $2.50 per $100 of gross receipts and refused to pay the additional premium demanded by Indemnity. Ratner testified that, throughout the negotiations with Cotter, Cotter had said that the rate would be the same as that on the Preferred policy, ($2.15 per $100 of gross receipts), and that the binders providing for a $4.50 rate had not been delivered to Midwest until after they had been cancelled. Defendant introduced in evidence a letter written by Cotter, dated April 29, 1947, which stated that the coverage "will cost you no more than $2.50 per $100 of gross receipts." The trial court, however, concluding that Cotter had "no express or implied authority to act as plaintiff's agent" and that he "was the agent of defendant, * * * and not the agent of plaintiff," held that "Cotter's acceptance of the public liability and property damage coverage at the rate of $4.50 per one hundred dollars of gross receipts on April 3, 1947,...
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