Olmsted, Inc. v. Md. Cas. Co.

• Decision Date: 03 April 1934
• Docket Number: No. 41829.,41829.
• Citation: 218 Iowa 997,253 N.W. 804
• Parties: OLMSTED, Inc., v. MARYLAND CASUALTY CO. et al.
• Court: Iowa Supreme Court

218 Iowa 997

253 N.W. 804

OLMSTED, Inc.,

v.MARYLAND CASUALTY CO. et al.

No. 41829.

Supreme Court of Iowa.

April 3, 1934.

Appeal from District Court, Polk County; Allan A. Herrick, Judge.

Action at law to recover damages resulting from an alleged conspiracy. The facts are stated fully in the opinion. Upon the trial in the lower court a verdict was returned in favor of plaintiff. Defendant appeals.

Reversed.

Miller, Miller & Miller, of Des Moines, for appellants.

Bradshaw, Schenk & Fowler, of Des Moines, for appellee.

CLAUSSEN, Chief Justice.

[1][2] This action is based upon a conspiracy. The appeal can be disposed of by an examination of the facts for the purpose of ascertaining whether anything was done pursuant to the alleged conspiracy which is actionable. This court is committed to the rule that a conspiracy cannot be the subject of a civil action unless something is done pursuant to it which, without the conspiracy, would give a right of action. Beechley v. Mulville, 102 Iowa, 602, 70 N. W. 107, 71 N. W. 428, 63 Am. St. Rep. 479;De Wulf v. Dix, 110 Iowa, 553, 81 N. W. 779;Jayne v. Drorbaugh, 63 Iowa, 711, 17 N. W. 433;Dunshee v. Standard Oil Co., 152 Iowa, 618, 132 N. W. 371, 36 L. R. A. (N. S.) 263.

The Maryland Casualty Company, is an insurance company authorized to do business in the state of Iowa. On July 1, 1925, it enteredinto a contract with Olmsted & Olmsted, Inc., by which the latter became its general agent in approximately thirty-five counties in the state of Iowa. On October 14, 1925, this contract was assigned by Olmsted & Olmsted, Inc., to Olmsted Incorporated, plaintiff herein. The contract provided that it could be terminated by either party upon thirty days' notice in writing to the other. Subsequent to the date of the contract between the casualty company and Olmsted & Olmsted, Inc., the Olmsted Company greatly enlarged the number of local agents affiliated with it. This expansion was accomplished only as a result of considerable effort and expense. The insurance business of Olmsted & Olmsted, Inc., and its assignee Olmsted, Incorporated, was not confined to the business of the casualty company. On September 23, 1929, a notice was prepared by the casualty company of the termination of the contract as of the date of October 31, 1929, and this notice was given to Olmsted, Incorporated, as required by the contract. Upon the termination of the contract, the casualty company opened a branch agency in Des Moines in charge of the defendant Buckton as its agency manager. Upon the termination of the contract between the casualty company and Olmsted, Incorporated, the casualty company entered into subagency contracts with local insurance agents in many cities and towns under which such local agents were authorized to represent the casualty company in securing and writing insurance. In the course of building up its subagency force, a large number of contracts were entered into with local agents who had been and were under contract with Olmsted, Incorporated.

With this brief statement of facts it may perhaps be well to briefly state the claims of Olmsted, Incorporated, presented by the pleadings. Olmsted, Incorporated, alleged that the casualty company and Buckton entered into a conspiracy to secretly organize and open a branch office of the casualty company in the city of Des Moines; to surreptitiously ingratiate themselves with the subagents of Olmsted, Incorporated; to covertly alienate such subagents from Olmsted, Incorporated; and to then cancel the contract between the casualty company and Olmsted, Incorporated. It is pleaded that the casualty company had orally agreed with plaintiff, prior to July, 1929, to place a special agent in the territory of Olmsted, Incorporated, for the purpose of developing said territory for the mutual benefit of the company and the general agent; that, subsequent to the formation of the conspiracy and under the guise that he was the special agent, above referred to, Buckton was sent to the general agent; and that, in the belief that Buckton was such special agent, plaintiff disclosed to Buckton its secret and confidential agency lists and files, arranged convenient routes by which Buckton might visit the subagents and wrote letters to its subagents advising them that Buckton would call upon them shortly for the purpose of assisting them and plaintiff, as well as the defendant casualty company; that on the 1st day of November, 1929, the casualty company opened a branch office in Des Moines with Buckton as branch manager; that before and after opening such office, by means of the confidential information so given and the favorable introduction of Buckton by plaintiff and by the use of blandishments and false and defamatory statements concerning plaintiff, Buckton alienated a large number of plaintiff's subagents and induced them to enter into contracts with the branch office of the casualty company. It was also claimed that premiums on renewals of insurance were diverted from plaintiff. These allegations were denied by the defendants.

The evidence indicates that Olmsted, Incorporated, was quite energetic in the extension of its agency force, that during the years it represented the casualty company it very materially increased the volume of business which the casualty company drew from the territory of such general agency, and that the increase in volume of business compared very favorably with the volume of increase of any other general agent of the casualty company. The officers in charge of the production department of the casualty company wrote flattering and commendatory letters to the general agent. There were some matters which occasioned friction and dissatisfaction between the company and the general agent. These were occasioned by the overlapping of subagencies of Olmsted, Incorporated, in territory within the state of Iowa assigned to other general agents of the casualty company, the representation by Olmsted, Incorporated, of other companies writing lines of insurance that were written by the casualty company, the execution of policies by the general agent in excess of its authority, and disputes in relation to the accounts of the general agent with the casualty company. With the merits of these matters we are not concerned, for the agency contract was not canceled on account of any claim that its terms and conditions had been breached. It fairly appears from the record that officers of the casualty company promised to send a special agent into the territory of the general agent for the purpose of aiding in the development of the business. There is, however, no provision in the contract between the parties for the services of such special agent. In the latter part of July, 1929, Buckton, who had been recently employed by the casualty company, was sent to Des Moines. He went as a special agent of the casualty company. It will be understood, of course, that the term “special agent” has no defined significance. He was instructed to make a survey of the general agency situation in Des Moines and to await the arrival in Des Moines of a Mr. Irelan, who was supervisor of agents and assistant secretary of the company. While awaiting the arrival of Mr. Irelan, Buckton made a survey of the general agency situation in Des Moines, which the record indicates consisted of interviewing the general agents of other insurance companies and ascertaining, so far as possible, the volume of business transacted by them. In some instances Buckton inquired of other general agents whether they would be interested in representing another company. Buckton arrived in Des Moines a few days ahead of Irelan. The first day after Irelan's arrival was spent by Irelan and Buckton in going over the results of Buckton's survey of the general agency situation in Des Moines. On the second day Irelan and Buckton went to the offices of Olmsted, Incorporated, where Mr. Buckton was introduced by Mr. Irelan. Nothing was said about the fact that Buckton had been in the city for several days, and plaintiff's officers...