Munro v. Bowers
| Decision Date | 25 February 1936 |
| Citation | 293 Mass. 514 |
| Parties | JOSEPH G. MUNRO v. CHARLES F. BOWERS, administrator. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
January 7, 1936.
Present: RUGG, C.
J., CROSBY, FIELD LUMMUS, & QUA, JJ.
Contract, What constitutes, Construction, Between insurance broker and general agent, Validity, Discharge. Insurance, Premium Contract between broker and general agent. Trust, What constitutes.
An insurance broker solicited business with an insurance company which, on the issuing of a policy, billed the premium to its general agent who in turn billed it to the broker, and the broker collected it from the assured. The broker had no direct dealings with the company, but settled his accounts with the general agent semimonthly. The company ceased to do business and cancelled policies, among which were some upon which the broker had received the premiums and the general agent had paid the premiums to the company. The broker thereupon paid the general agent the amount of premiums earned upon the policies at the time of cancellation.
The general agent brought an action to recover the entire amount of the premiums received by the broker less such payment made by him and his commissions, and there was a finding for the plaintiff. Held, that the contract between the plaintiff and the defendant created the relation of creditor and debtor between them and did not create a trust between the broker and the company, and the finding was warranted.
The provisions of G.L. (Ter. Ed.) c. 175, Sections 169, 176, did not forbid such a contract between a general agent of an insurance company and an insurance broker.
It was not a defence to the action above described that, upon the cancellation of the policies, the broker had furnished insurance without charge to the assureds named in the cancelled policies or that the broker had made the partial payment to the general agent, which the trial judge found not to have been made in satisfaction of the entire debt.
CONTRACT. Writ in the Second District Court of Eastern Middlesex dated October 1, 1934.
The declaration was on an account annexed for $234.97, being the full amount of premiums received by the defendant's intestate in the circumstances described in the opinion, less commissions and payments of premiums earned cancelled policies. The action was heard by Maloney, J., who found for the plaintiff in the sum claimed. A report to the Appellate Division for the Northern District was ordered dismissed. The defendant appealed.
J. J. Flynn, for the defendant. J. H. Beecher, for the plaintiff.
QUA, J. Munro was a general agent of Lloyd's Insurance Company of America hereinafter called Lloyd's. The defendant's intestate, one Gould, acted as an insurance broker. Lloyd's, Munro and Gould did business in accordance with an established course of dealing under which Gould solicited business in Lloyd's, and on the issuing of a policy Lloyd's billed the premium to Munro, who billed it to Gould, who billed it to the assured or collected it from the assured when the policy was delivered. Could had no direct dealings with Lloyd's, but settled his accounts with Munro semimonthly. Lloyd's ceased to do business and cancelled all...
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