Noble v. Mitchell

• Decision Date: 21 December 1893
• Citation: 100 Ala. 519,14 So. 581
• Parties: NOBLE ET AL. v. MITCHELL. [1]
• Court: Alabama Supreme Court

14 So. 581

100 Ala. 519

NOBLE ET AL. v. MITCHELL. ^[1]

Supreme Court of Alabama

December 21, 1893

Appeal from circuit court, Montgomery county; John P. Hubbard Judge.

Action by S. M. Mitchell against Noble & Ware on a policy of insurance. Judgment for plaintiff. Defendants appeal. Affirmed.

The complaint as amended sought to recover $1,000 damages, and alleged that the plaintiff was, at the time of taking out the policy of insurance, a merchant, and that on September 25 1890, "plaintiff received from the defendants, who were engaged in a general insurance business in the city of Montgomery, an insurance policy purporting to have been issued by the Fairmount Insurance Association of Philadelphia, Pennsylvania, the said policy contracting to insure from loss by fire the goods, wares and merchandise of the plaintiff, to the amount of one thousand dollars." The complaint then alleges that, a short time after the receipt of the policy of insurance, the plaintiff forwarded to the defendants a draft for the premium due on the said policy; that the premium was received by the defendants; that on December 22, 1890, during the period covered by the policy, the plaintiff's storehouse, with his goods wares, and merchandise, described in the policy, was destroyed by fire, without fault on the part of the plaintiff. The complaint further alleges that the Fairmount Insurance Association is a corporation not incorporated under the laws of the State of Alabama, and that said insurance association "had not procured a license from the auditor of the state of Alabama to do business in said city for either the year 1890 or 1891." The defendant demurred to the complaint, on the ground that-First, it does not appear in said complaint that the defendants ever at any time acted in this state as agents for the Fairmount Insurance Association; second, that it does not appear from the said complaint that defendants were in any manner parties to said policy of insurance; third, that the complaint does not show that the defendants acted as agents of said Fairmount Insurance Company in respect to the alleged policy mentioned in the complaint; fourth, it is not shown by the complaint that the defendants, or either of them, undertook or promised to pay to the plaintiff the amount of said policy. All of these grounds of demurrer were overruled by the court, and issue was joined on the plea of the general issue.

The testimony for the plaintiff tended to show that, at the request of one of the defendants, Mr. Ware, he authorized him to write $1,000 of insurance on his stock of goods; that some time after he received through the mail a policy for $1,000 on his stock of goods, which was issued by the Fairmount Insurance Association of Philadelphia, Pa.; that upon receipt of said policy he forwarded to the defendants a check for $32.50, which was the stipulated premium. The plaintiff then introduced, against the objection and exception of the defendants, the policy, which was received by him, and which was issued by the Fairmount Insurance Association of Philadelphia. The plaintiff introduced as a witness the chief clerk in the auditor's office, who, after having testified that as chief clerk he kept a record of all the licenses issued by the auditor, further testified, against the objection and exception of the defendants, that he had examined the record of licenses issued to foreign insurance companies, on file during the years 1890 and 1891, and that there was no license issued to the Fairmount Insurance Association of Philadelphia, Pa., during that time. The loss of the stock of goods by fire was proved, and not questioned. The testimony for the defendants tended to show that they secured for the plaintiff a policy of insurance in the New Haven Security Company, and that, shortly after the receipt of said policy, the said plaintiff sent them, through the mail, a check for $32.50, which was the amount of premium due on the New Haven Security policy. It was also further shown however, by the testimony for the defendants that, upon the new Haven Security Company being informed of the issuance of said policy, the defendants were instructed to cancel the same; that in obedience to the said instruction they notified the plaintiff that the policy was canceled; that thereupon at the plaintiff's request, they undertook to place his insurance with some other company; that they notified plaintiff that they could not get him insurance in Montgomery, but thought they could get him insurance in Chicago; and that thereupon the plaintiff told them to go ahead. The plaintiff denied that he instructed the defendants to send to Chicago for the policy. All the other evidence in the case is sufficiently stated in the opinion.

The defendants excepted to the following portions of the court's general charge to the jury, which was given after the introduction of all the evidence: "The plaintiff sued to recover of the defendants one thousand dollars because he says that the defendants were agents of the Fairmount Insurance Company, a foreign corporation, who did business in this state without having first procured a license as the law requires. Now, a foreign corporation, and any corporation not incorporated under the laws of this state, is a foreign corporation within the meaning of this section of the statutes, which requires, before it does business in the state, to procure a license from the auditor of the state; otherwise, its contracts are illegal and void, if the parties seek to take advantage of it; and in addition to that a penalty is imposed upon any person who acts as agent of said company. Now, this agency may arise in either one of two ways. One is where the person acting as agent is such in point of fact, under the rules which usually constitute one person the agent of another. The other way in which he can become an agent is by doing either one of the acts which the statute, imposing a penalty for, says if he does he becomes liable as an agent. Now, this statute says if the defendant transmits a policy of insurance, or a premium of insurance, that he is an agent, although in point of fact he has no connection with the company. So the question under this complaint here for you to decide is whether the defendants in this case transmitted to the plaintiff a policy of insurance of the Fairmount Association of Philadelphia. That is what the plaintiff alleges defendants did. Now, is that true? You are to decide that question in the light of all the evidence, as persons of common sense, using your everyday experience, and see what the evidence establishes. Now, does it establish the proposition that the defendants transmitted to this plaintiff a policy of insurance of the Fairmount Association, or for the Fairmount Association? If they did this, then they are liable therefor for loss, if any was sustained. Further, you must decide as to the amount of loss, (and there is no controversy that this store was burned,) and that the amount of injury resulting was as much as one thousand dollars. Plaintiff cannot recover more than a thousand dollars, but anything under that. Now, what would constitute a transmitting of the policy by the defendants to the plaintiff? Now, under this statute, I instruct you that if you find from the testimony, and are reasonably satisfied that it is true, that the defendants received of the plaintiff $32.50, and that he requested them to place insurance for him, and they sent the money to brokers in Chicago for the purpose of having such brokers effect insurance for the plaintiff, and such brokers did effect insurance in the Fairmount Company, and the Fairmount Company sent a policy of insurance directly to the plaintiff, or sent it to the brokers in Chicago and they sent it to the plaintiff, or it was transmitted to the defendants here, and they sent it to the plaintiff, that would be a transmitting of the policy of insurance by the defendants, because the defendants could not escape liability under this statute by sending a premium of insurance to Chicago brokers there, and having those brokers procure insurance and transmit the policy to the plaintiff, although they did not know at the time they sent the money, and did not give directions as to what company the insurance should be placed at. This is a new statute, so far as enforcing it is concerned, and I was inclined to think that it was necessary that the defendants should be placed in the same position as if the company itself were sued, and that the plaintiff would have to make proof of loss and bring suit in the time specified. I have examined it more carefully, in connection with some other cases, and my conclusion is that it is not necessary, and that when the defendants violated the statute by becoming the agents of a foreign insurance company without license to do business in this state, that it was a duty devolving upon them to pay the amount of loss sustained by the plaintiff, and that loss is the amount of the policy, and that it is not necessary for the plaintiff to make proof of it in order to recover against the defendant. This is my charge. So what I have stated to you, I give you as the law of the case. If you find from the testimony, and are reasonably satisfied with its truth, that the defendants received $32.50, and that they were to procure insurance for the plaintiff, and they, in pursuance thereof, sent the money to brokers in Chicago with directions to effect insurance, and the brokers did effect insurance and transmit the policy, either directly or indirectly to the plaintiff, or to the defendants here, and the policy went into the hands of the plaintntiff, that tha would be a transmitting to the policy within the meaning of this statute." The defendants also requested the court...