Indiana & Ohio Live Stock Insurance Co. v. Bender
| Decision Date | 26 January 1904 |
| Docket Number | 4,656 |
| Court | Indiana Appellate Court |
| Parties | INDIANA & OHIO LIVE STOCK INSURANCE COMPANY v. BENDER ET AL |
From Superior Court of Marion County (51,110); J. L. McMaster Judge.
Action by the Indiana & Ohio Live Stock Iusurance Company against Conrad Bender and others. From a judgment for defendants, plaintiff appeals.
Affirmed.
F. P Mount, Albert Baker and Edward Daniels, for appellant.
D. W Howe, for appellees.
Action by appellant on bond, judgment for appellees. The first five assignments of error are based upon the action of the trial court in overruling demurrers to separate paragraphs of appellees' answer. A special finding of facts was made, and conclusions of law stated thereon, to each of which conclusions appellant duly excepted.
The questions arising upon demurrer to the answers, so far as they are relevant to the facts, are presented by the assignment of error based upon the conclusions of law, and it is therefore unnecessary to consider them as made upon the pleadings. Woodward v. Mitchell, 140 Ind. 406, 407, 39 N.E. 437; Forgy v. Harvey, 151 Ind. 507, 51 N.E. 1066; Smith v. Wells Mfg. Co., 148 Ind. 333, 46 N.E. 1000.
The facts as exhibited by the findings are: The Indiana Live Stock Investment Company was organized in 1888, under the law of the State, for the purpose of insuring live stock. In 1890 Solomon Leopold was appointed a local agent for Marion county, with authority to take and forward applications for insurance to the company, which, if it approved the risks, issued and mailed policies to him for delivery, he collecting premiums thereon and accounting therefor to the company, receiving for his services twenty-seven and one-half per cent. of such premiums. The amount of premium was charged to him on the company's books when the policy was forwarded, and he was credited with the commission thereon. Further credits on the general account so kept were made when he paid money or returned policies for cancelation. On the first of each month a statement was sent to him, showing all charges and credits with the balance due. On March 10, 1893, the appellant company was incorporated, beginning business May 1. Its stockholders were identical with the stockholders of the stock investment company above referred to, both as to persons and amounts. It had the same officers and employes. Its office was at the same place, and its business was the insurance of live stock; its purpose being to cover the same field. For convenience the prior corporation is referred to as the "Old Company." The Old Company ceased writing policies the last day of April of said year, but continued its organization for the purpose of paying losses and winding up its business.
The appellant did not succeed to its assets, nor assume its liabilities, but its stockholders withdrew a portion of its assets as dividends, and applied the same to the payment of stock in the appellant company. The main purpose of the change being to take advantage of legislation relative to such business. On May 1, 1893, said Leopold was appointed agent for appellant, with the same powers and duties as under the Old Company. He was not under bond to the Old Company, but appellant required from him a bond with sureties conditioned for the faithful performance of his agreements and engagements "in the foregoing agreement." The bond in suit was attached to an agency contract between appellant and Leopold, hereafter referred to E. M. Brewer was adjuster of both companies, his duties being to adjust losses, supervise agents, and to see that they faithfully accounted. The bond sued upon was prepared by Brewer and handed to Leopold who said he would have it signed by sureties who were financially good, but did not inform Brewer who any of the persons he expected to get as sureties were. The instrument was made by filling blanks in a printed form. It was filled up and handed to Leopold at Indianapolis, and two days later received by Brewer at the same city, it then bearing the names of appellees. Brewer examined the tax duplicate as to the financial standing of the sureties, satisfied himself that it was sufficient, and deposited the instrument in the defendant's home office at Crawfordsville, it accepting the bond, all within three or four days after May 1, 1893.
Neither appellant nor any of its officers had any acquaintance with any of appellees until some time after the bond was taken, but knew that all of them resided at Indianapolis. No communication was had with any of appellees on May 1, or for many months thereafter, nor did such officers see any of appellees during such period. No one acting for the company knew who the sureties were to be until Leopold delivered the bond; and appellant did not directly or indirectly request any of them to sign it, but it was signed by them at Leopold's request in appellant's absence. The only direction given by Brewer was to get the names of persons who were good financially. Leopold entered upon the employment of appellant under the terms of the contract contained in the said instrument on May 1, 1893, and continued therein until he was discharged August 6, 1894. The appellees in signing said bond relied upon the terms of the agency contract included therein. When Leopold was appointed agent for appellant he was indebted to the Old Company, on account of his agency for it, in the sum of $ 4,919.53, as appellant and its officers knew. During April, 1893, he paid nothing to appellant, although the net premiums with which he was chargeable amounted to $ 943.16 upon 126 policies forwarded to him upon applications received from him. Neither Leopold nor appellant, its officers or agents, gave appellees notice of his indebtedness to the Old Company, and they had no notice thereof until after Leopold's death, and no inquiry was made by them relative thereto.
During the six months following May 1, 1893, appellant delivered 500 policies to Leopold, charging therefor upon its books and in its monthly statements to him $ 5,661.94. The gross premiums thereon deducting on account of commission and other credits left $ 3,694.71 still due. The only cash paid by him during such period was $ 85, paid in August. During the same period he remitted to Henry Naylor, who was bookkeeper for both corporations, $ 1,040 in cash, directing that the sum be applied on his indebtedness to the Old Company, and it was so applied. Naylor did not know from what source such money was secured. Leopold had no other income during the period than that derived from his agency for appellant, and the court infers that the amount so paid was received by him on business done for appellant. On February 1, 1894, Leopold's balance to the Old Company was $ 3,500, for which he then executed his note with endorsers other than appellees. Such note is unpaid and probably worthless. The failure of Leopold to pay on account to appellant began May 1, 1893, and continued until August, 1894. Appellant's system of bookkeeping exhibited the names of policy holders, the serial number of policies, and the amount of premiums. In sending money Leopold did not designate what particular premium it represented, except when sent in connection with a canceled policy. At the close of each month it rendered him a detailed statement of his account, showing the balance due and all items and details thereof. The gross premiums on policies written by him averaged $ 10.87 on each policy, and the net premium averaged $ 7.88. During the six months following May 1, 1893, appellant's adjuster had frequent interviews with Leopold, urging him to pay the balance due. In some of the first interviews Leopold claimed that many of the policies sent to him had not been delivered, and that he had failed to make collections. November 1, 1893, the adjuster became more pressing, and insisted that undelivered policies be sent in and credited. Many of the persons insured were known by the appellant to be solvent business men. It made no inquiry of any of them as to the payment of premiums to Leopold, nor was any demand made upon him to exhibit undelivered policies. When Leopold executed the $ 3,500 note he admitted that he had converted said amount. Afterward the adjuster heard of his squandering money collected, in drinking, and probably in gambling, and reported such information to appellant. Afterward, and before August 6, 1894, the adjuster several times threatened Leopold that unless the indebtedness was reduced he would inform the sureties of it. Leopold begged him not to do so, and stated that if he did he would kill himself. These facts were reported to appellant, and pursuant to the request of Leopold, and his promise to pay off the indebtedness as rapidly as he could, neither appellant nor its adjuster communicated the fact of such indebtedness to appellees.
On August 6, 1894, Leopold admitted the conversion of the amount charged against him, and was discharged, being at once reemployed jointly with his son, who was to handle the money. On November 22, appellee Kahn was notified by appellant of the amount of said indebtedness. Prior thereto he had no notice thereof, nor was any notice given to the other appellees, nor did they have any knowledge of the indebtedness, nor that Leopold had been discharged at any time after the execution of the bond, until after Leopold's death, which occurred January 20, 1895. No monthly settlement was had by appellant with Leopold, as provided by the contract. Just prior to his discharge appellee Kahn asked to be released from further liability and thereupon appellant demanded an accounting from Leopold, who paid $ 250, and admitted that the rest of the money had been used for his own purposes. Appellees made...
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