The
action in the Circuit Court was an assumpsit by the
plaintiffs in error against the defendant in error, to
recover damages for alleged breaches by the defendant in
error of three certain agreements hereinafter referred to.
The
plaintiffs in error, composing the firm of Pellet and Hunter
have been, ever since 1885 or 1886, and were at the times of
the signing of the said insurance business, conducting and
operating in such business a general agency throughout eight
or nine states in the north west, and a local agency in
Chicago. In the maintenance of said business they have
during said period, at their own expense, kept offices in the
City of Chicago fully equipped for the transaction of their
business, including clerks, stenographers, salaried special
agents, and local agents, paid by percentage at various
points throughout the field of their general agency, and
other employes. In addition to the defendant in error
represented by plaintiffs in error under said agreements, the
plaintiffs in error represented, as general agents
throughout the field of the north west five or six other
companies, all of whom maintained their relations with the
plaintiffs in error before, and after, the time of the
alleged breaches of the said agreements by defendant in
error.
The
contract between the plaintiffs in error and the defendant in
error, dated October 1st, 1897, is in the words and figures
following:
'Agreement
made this first day of October, A.D. 1897, by and between
the Manufacturers' & Merchants' Insurance Company
of Pittsburgh, Pa., and R. J. O. Hunter and Clarence S.
Pellet, composing the firm of Pellet & Hunter, of Chicago,
Illinois, Witnesseth:
'First.
The said Manufacturers' and Merchants' Insurance
Company does hereby appoint said Pellet & Hunter as
General Agents in the territory hereinafter named, with
full power and authority to appoint and remove agents and
generally to conduct the business of said company under
its instructions, within the territory.
'Second.
The General Agency hereby created shall cover the entire
states of Illinois, Michigan, Wisconsin, Missouri, Iowa,
Nebraska, Ohio, Minnesota and Colorado, and all risks
written in or reported through the office of said Pellet
& Hunter, at Chicago, Illinois.
'Third.
The said Manufacturers' & Merchants Insurance Company
shall furnish whensoever requested, full and complete
statements, copies of charter and all documents,
necessary to enable the said General Agents to enter said
company for business in any of the states above named;
the time of filing such papers, however, being left at
the discretion of the said Pellet & Hunter.
'Fourth.
The said Pellet & Hunter are to give all necessary and
proper supervision to the business of said Company in
their territory, and in person or by competent
representatives to make thorough inspection from time to
time of the risk reported to them from the various
agents;-- and shall forward to said Manufacturers' &
Merchants' Insurance Company of Pittsburg, Pa., with
reasonable promptness, copies of all daily reports and
endorsements received from agents and originals of their
own business (the originals from agents to be kept in the
office of Pellet & Hunter) and shall forward regularly--
not later than the 27th day of each month- a detailed
statement of the account of the business of such agency
for the preceding month, and they shall be responsible
for all premiums collected by agents appointed by them,
and they shall make remittance to the said Company of the
balance shown by such monthly statement to be due from
them, not later than sixty days after the month for which
such account is made up.
'Fifth.
The said Pellet & Hunter shall retain during the existence
of this contract a commission of thirty-three and one-third
per cent. (33 1/3%) on all net gross business reported
through or by their office (by net gross business
is meant premiums, less return premiums and all reductions
by re-insurance) and in consideration of the sum so
retained, they shall pay and bear all expense for
supervision and inspection commissions to agents; all
state, county and city taxes; all fees and charges of all
state or municipal departments; adjustment expenses; and
all other expenses and charges whatsoever, except only
legal expenses in cases of litigation and the necessary
blanks and forms for the proper carrying on of the
business; and the balance, if any, of the said 33 1/3%
shall be retained by them as full compensation for their
services as such General Agents. The said forms and blanks
to be furnished at the expense of the said
Manufacturers' & Merchants' Insurance Company--
provided, however, that the said Pellet & Hunter shall be
further entitled to a contingent commission of ten per cent
(10%) on the net profits derived by the Company from their
General Agency during the year ending September 30th, 1898,
and each succeeding year, to be ascertained and paid after
settlement of losses incurred during the year and after
deducting the matters pertaining to said General Agency,
provided further, that if there shall be any unsettled
losses by reason of dispute or litigation, such losses
shall be treated as settled at the amount claimed by the
assured, and so figured in determining the amount of
contingent commission due said Pellet & Hunter and any
difference in final settlement of said disputed or
contested losses shall be added to or deducted from the
losses of the succeeding year.
'Sixth.
This contract shall continue for the term of three (3)
years from the 30th day of September, A.D. 1897, provided
however, that if at the expiration of the first year of its
continuance, either party may desire to revoke or annul
this contract, they shall have the right so to do, by
giving to the other three months' written notice of
their election so to do, and at the expiration of the date
fixed in such notice to be given, however, within ten (10)
days after the expiration of the first year, or on this
contract shall again continue in full for a year, subject
to a like revocation (in the manner as above provided) at
the end of the second year.'
A
contract known as the 'Five Companies Agreement,'
dated March 22nd, 1897, and the supplement thereto, executed
March 19th, 1898, were substantially the same as the
foregoing, except that the commission was fixed at
thirty-three per centum instead of thirty-three and one-third
per centum, and that they were to continue for three years
from January 1st, 1897.
April
4th, 1899, the following agreement was entered into between
the defendant in error and the Fidelity Insurance Company of
Baltimore:
'That
for and in consideration of the mutual covenants and
agreements hereinafter expressed and set forth the said
parties hereto have covenanted and agreed as follows, that
is to say:
'First:
Said Fidelity Company hereby reinsures and assumes at and
from the hour of twelve o'clock noon (standard time) of
Saturday, the first day of April, in the year eighteen and
ninety-nine (1899), all outstanding policies and risks of
said Manufacturers' Company, for insurance against loss
or damage by fire or lightning on any property located in
any part of the United States of America or Canada, and the
said Fidelity Company hereby assumes any and all
liabilities under any and all outstanding policies or risks
heretofore written by said Manufacturers' Company and
for any and all policies or risks which may be written or
undertaken by said Manufacturers' Company in pursuance
of clause five of this contract.
'Second:
In consideration of such reinsurance said
Manufacturers' Company agrees to pay to said Fidelity
Company in the manner and at the time hereinafter
specified, the full unearned gross pro rata premium on all
policies in force as of April 1st, 1899, less sixty (60)
per cent thereof, which said deduction is to cover all
commissions and expenses incurred by by said
Manufacturers' Company in connection with said policies
or risks.
'Third:
Within fifteen days after the date of this agreement or
contract of re-insurance, said Manufacturers' Company
agrees to make a cash payment of and to pay forty thousand
dollars to the said Fidelity Company on account of said
unearned gross pro rata premiums provided to be paid by
said Manufacturers' Company to said Fidelity Company in
the next preceding
clause of this agreement and the said Manufacturers'
Company hereby agrees to pay the balance of said entire
amount of such unearned gross pro rata premiums to the said
Fidelity Company on the completion of the computation of
the total amount thereof, provided said payment shall be
made by said Manufacturers' Company not later than the
first day of May, 1899.
'Fourth:
And said Manufacturers' Company hereby agrees and
undertakes to furnish to said Fidelity Company complete
schedules or bordereaux of all outstanding policies of said
Manufacturers' Company, on forms to be supplied by said
Fidelity Company, which schedules or bordereaux shall be
completed and furnished and delivered to said Fidelity
Company on or before the first day of May, 1899, and it is
hereby expressly and mutually understood and agreed between
the parties thereto that said schedules or bordereaux shall
be complete and accurate in all particulars, according to
said form, and that said Fidelity Company shall not assume
or be liable under any Policy or Policies omitted from or
not set forth on said schedules or bordereaux nor shall
said Fidelity Company be liable under any policy for or in
any greater amount or for any longer period or term than
may be set forth on said schedules or
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