Pearl Assur. Co. v. National Ins. Agency

• Decision Date: 30 September 1942
• Docket Number: 116-1941,112-1941
• Citation: 28 A.2d 334,150 Pa.Super. 265
• Parties: Pearl Assurance Company, Ltd. v. National Insurance Agency, Inc., et al., Appellants
• Court: Pennsylvania Superior Court

28 A.2d 334

150 Pa.Super. 265

Pearl Assurance Company, Ltd. v. National Insurance Agency, Inc., et al., Appellants

Nos. 112-1941, 116-1941

Superior Court of Pennsylvania

September 30, 1942

Argued October 15, 1941.

Appeals from judgment of C. P. No. 2 Phila. Co., June T. 1940, No. 597, in case of Pearl Assurance Company, Limited v. National Insurance Agency, Inc., et al.

Trespass. Case submitted for decision on facts stipulated.

Findings and judgments for plaintiff, opinion by Smith, P. J Defendants appealed.

Reargument ordered.

Albert M. Hankin, for appellants.

C. Laurence Cushmore, Jr., with him White & Staples, for appellee.

Before Keller, P. J., Cunningham, Baldrige, Stadtfeld, Rhodes and Hirt, JJ.

OPINION

PER CURIAM.

This was an action of trespass brought by an insurance company against a corporate insurance broker -- which seems to have been a 'one-man' corporation -- and the 'one-man' individual who was its president, and himself performed all the acts complained of, for the recovery of some twenty-two hundred dollars damages, sustained by the plaintiff in consequence of the alleged unlawful conversion by them of the net premiums on certain insurance policies, which had been intrusted to them by plaintiff for the purpose of delivering the policies and collecting the premiums from the insured or their insurance brokers -- where there was an overwriting broker -- and remitting the net proceeds, after deducting their commissions, to the plaintiff insurance company.

After the filing of an affidavit of defense, a pre-trial conference was had, which resulted in the parties entering into a stipulation as to facts; and the case was then submitted to a judge -- sitting without a jury -- for decision on the facts as stipulated.

The trial judge made certain findings of fact in accordance with the stipulations, and on the basis of these findings and his conclusions of law from them, decided that the plaintiff was entitled to judgment against both defendants in the amount of $ 1,855.57, the difference between that figure and the amount claimed by the plaintiff representing premiums that had not been actually received by the defendants.

Exceptions to the findings and conclusions of the trial judge were dismissed and judgments were entered for the plaintiff and against the defendants in accordance with the decision of the trial judge. Defendants severally appealed.

The corporate defendant did not deny its liability in assumpsit for the full amount claimed by the plaintiff; but it denied any liability in trespass, based principally on the point that it was licensed as an insurance broker, not as an insurance agent, under the Insurance Department Act of 1921, P. L. 789, and its amendments -- Sections 601, 621, etc. -- 40 P. S. §§ 231 and 251. And the individual defendant denied any liability, on the ground that he was acting only as the agent of the corporate defendant.

We are all of the opinion that the division of representatives of insurance companies by the Insurance Department Act into insurance agents and insurance brokers does not prevent an insurance broker from acting as an agent of an insurance company in the collection of the premium from the insured and paying it over to the insurance company. See Gosch v. Firemen's Ins. Co., 33 Pa.Super. 496. One does not have to be licensed as either an insurance broker or insurance agent to do this. Any person, or any corporation whose business bears any relation to insurance, or to the delivery of papers, deeds, contracts, etc. may be authorized by an insurance company to deliver a policy and collect the premium; and when so collected, the duty attaches to pay over the amount so received, less the costs, etc. incident thereto, to the insurance company. As pointed out in Transcontinental Oil Co. v. Atlas Assurance Co. Ltd., 278 Pa. 558, 123 A. 497, the purpose of Article VI (P. L. 810) of said act was to compel registration of the classes of individuals named, and to prohibit the doing of certain acts declared unlawful. "There is nothing in the statute relied upon which may be said to change the wellestablished rule that the insured, in making payment, may safely rest on the implied authority to receive the premium, which the company confers on the person to whom the policy has been given for delivery". (P. 565).

However, the judge of this court, to whom the case was first assigned, in his examination of the law, found a case (Life Association v. Catlin, 2 Walker 338), which the industry of counsel on both sides had not brought to our attention. In that case the Supreme Court affirmed the judgment of the court below (Trunkey, P. J.) and held that an action in trover would not lie by an insurance company to recover the amount of premiums on policies received by the defendant as its agent, on which he was to receive a percentage as his commission or compensation. The court said: "It is too clear for argument that trover was not the proper form of action in this case. It was for the amount of premiums on policies of life insurance received by the defendant as an agent of the plaintiffs for which he was to have a percentage. When he received the money he was simply liable to account and pay over the balance. There was no obligation to pay the identical coin or note, or notes he had received." This was followed by this court in Cherry v. Paller, 91 Pa.Super. 417, an action brought for the alleged conversion of money received by defendant as authorized agent for the collection of rents for the plaintiff principal. In affirming the lower court, which sustained defendant's affidavit of defense raising a question of law, this court said, speaking through Porter, P. J., "The relation between these parties, averred in the statement, was that of principal and agent. There was an entire absence of any averment of a contract, or circumstances, which imposed an obligation on the defendant to keep the coin, bank notes or checks received from the tenants who paid the rents separate from other funds and return the identical coins, bills or checks to the plaintiff. The averments of the statement, if true, establish that the money was lawfully received by this defendant. It is, therefore, clear that those decisions which hold that when one has come into the possession of property of another through force, fraud, other unlawful means, or mistake, and converts that property to his own use an action of trespass will lie, have here no application. This defendant having, as agent, lawfully received the coins, bills or checks, and being under no obligation to do any particular thing with regard to said specific property, might have discharged himself from all liability, either in assumpsit or trespass, by paying over to his principal, the plaintiff, an equal sum in money. The facts averred by plaintiff were not sufficient to afford a foundation for an action of trover, or any other form of trespass. The action of trover has not been used to recover on unadjusted accounts, nor on accounts stated, although, for many generations, agents have often appropriated money received for the use of their principals: Life Association v. Catlin, 2 Walker 338; Davis v. Thompson, 10 Sadler 563, 14 A. 169; Sutterly v. Fleshman, 41 Pa.Super. 131." (P. 420).

But a majority of the court are presently of opinion that acts of assembly passed since 1875, when Life Association v. Catlin, 2 Walker 338, was decided, warranted an action of trespass for the tortious conversion of money, even though the identical specie or currency was not required or intended to be delivered to the plaintiff.

We have departed widely from the old common law action of trover and conversion. Originally it was designed for cases where goods had been lost and were found ^[1] and had been converted, without right, by the finder to his own use. In such case the owner of the goods, or one having a general or special property in them, might sue the finder in trover to recover the value of the goods so wrongfully converted.

The remedy was extended to the wrongful conversion of goods which had not been lost and found; ^[2] but instead of issuing a new writ of trespass on the case applicable to such circumstances, resort was had to the action of trover, by the use of a fiction, which required the plaintiff to aver (1) a loss and (2) a finding -- although there had been none -- which averments were not traversable, followed by an averment of wrongful conversion, which was the gist of the action.

We have long since abandoned the use of the fiction [150 Pa.Super. 271] -- so much so that many lawyers are wholly unaware of its history -- but we have insisted on retaining many of the outworn and outmoded incidents of the original common law action.

By the Act of May 25, 1887, P. L. 271, the General Assembly...