Smith v. Ohio Millers' Mut. Fire Ins. Co.

• Decision Date: 18 May 1928
• Docket Number: 25572
• Citation: 6 S.W.2d 920,320 Mo. 146
• Parties: A. B. Smith and E. K. Smith, Partners, Doing Business Under Firm Name of A. B. Smith Lumber Company, Appellants, v. Ohio Millers Mutual Fire Insurance Company
• Court: Missouri Supreme Court

6 S.W.2d 920

320 Mo. 146

A. B. Smith and E. K. Smith, Partners, Doing Business Under Firm Name of A. B. Smith Lumber Company, Appellants, v. Ohio Millers Mutual Fire Insurance Company

No. 25572

Supreme Court of Missouri

May 18, 1928

Appeal from Pemiscot Circuit Court; Hon. Henry C. Riley Judge.

Reversed and remanded.

Ward & Reeves for appellants.

(1) The court erred in referring this case to a referee. (a) The whole law of reference is governed by statute; and a party's right to trial by jury, as guaranteed by Section 28 of Article 2 of the Constitution can only be defeated by reference when the statute especially authorizes it. And the statute gives a reference, first, where the trial of an issue of fact will require the examination of a long account on either side; second, where the taking of an account will be necessary for the information of a court before judgment, or for carrying the judgment or order into effect; or, third where a question of fact other than upon the pleadings shall arise upon motion or otherwise. Secs. 1425, 1426, R. S. 1919; Cault v. Blythe, 55 Mo. 293. (b) The only possible ground that a reference could be fixed in this case is that it involves a long account. The statute providing for reference in a case involving a long account is an exception to the right of trial by jury, and cannot be extended to apply to any case unless it clearly appears to fall within the letter and spirit and is expressly authorized by the statute; and no compulsory reference can be had except in a case involving a long account between the parties. Thaxton v. Ins. Co., 7 Mo.App. 544; Father Matthews v. Fitzwilliams, 12 Mo.App. 447; Ittner v Assn., 97 Mo. 567; Creve Coeur Co. v. Tamm, 138 Mo. 385; Snider v. Crutcher, 137 Mo.App. 130; Roth Tool Co. v. Spring Co., 146 Mo.App. 31; Browning v. St. Ry. Co., 284 Mo. 439; Klingensberg v. Davis, 268 S.W. 101; National Bank v. Laughlin, 305 Mo. 8. (c) An "account," as used in Sec. 1426, R. S. 1919, in regard to a reference means "a detailed statement of the mutual demands in the nature of debts and credits between the parties arising out of a contract or some fiduciary relation." Ittner v Assn., 97 Mo. 567; Reed v. Young, 248 Mo. 615; Browning v. St. Ry. Co., 284 Mo. 446; Pollard v. Carlyle, 218 S.W. 922; Kenneth v. Bank, 96 Mo.App. 134; Creve Coeur Co. v. Tamm, 138 Mo. 390; Klingensberg v. Davis, 268 S.W. 101. (d) Whether or not a case is referable is always to be determined from the face of the pleadings. Kenneth Co. v. Bank, 96 Mo.App. 133; Johnson v. Blell, 61 Mo. 40; Craig v. Furniture Co., 187 S.W. 793. (e) Defendant's application for referee was not based upon the theory that this case involved a "long account between the parties," but "that there is a long and complicated account between the insurance broker and the plaintiff which is necessary to be examined in order to determine whether or not said premium has been paid." Thornton v. Assn., 7 Mo.App. 546; Deederick v. Richley, 19 Wend. 110; Father Matthews v. Fitzwilliams, 12 Mo.App. 447. (2) The finding of the referee is against the law, and the evidence, and the court erred in confirming and approving said referee's report. (a) The referee found that the plaintiffs in November, 1920, prior to the attempted cancellation on March 16, 1921, had paid the premiums to Auber Smith. Defendant's proof by its president and by its witness Auber Smith shows that the account for this and other policies were charged by defendant to Auber Smith. Numerous letters of defendant to Auber Smith so stated; bills were sent to Auber Smith debiting him with the account; defendant gave the credit to Auber Smith, with whom they had previously had dealings; Auber Smith in turn extended credit to plaintiff for a short while and then collected from plaintiff the full amount of the premiums. The referee so finds. Defendant's president and its witness Auber Smith admits that when it sought to cancel the policies it did not return the earned premiums to plaintiff, nor tender same. The referee found that the policies were cancelled. This finding is contrary to the law. "Before an insurance company can cancel an insurance policy it must return the unearned paid premiums." Sec. 113, Wood on Insurance; Gardner v. Ins. Co., 58 Mo.App. 617; Leader Realty Co. v. Markham, 163 Mo.App. 314; Grant Lbr. Co. v. Ins. Co., 253 F. 83. (b) The referee found, and in fact it is uncontradicted and is conceded, that plaintiffs made all the proof necessary warranting a judgment, viz., produced the policy of insurance sued upon, destruction of the property by fire, value of the insured property destroyed; and proof of loss given as required by the policy. 19 Cyc. 535; 26 C. J. 514; Hay v. Ins. Co., 207 Mo.App. 277; Bray v. Ins. Co., 238 S.W. 1095; Lafferty v. Ins. Co., 229 S.W. 750; Foster v. Ins. Co., 233 S.W. 499; Pringle v. Ins. Co., 233 S.W. 252; Godfrey v. Ins. Co., 232 S.W. 231. After the abovenarrated proof is made or admitted, then plaintiff is entitled to a judgment unless the defendant comes forward and makes substantial proof upon some plea, as non-payment of premiums, fraud, mistake, estoppel, etc.; and if it does make such proof then even if such proof is undenied, it is not entitled to a directed verdict, but it is a question of fact. Godfrey v. Ins. Co., 232 S.W. 231; Hay v. Bankers Life Co., 231 S.W. 1035; Keller v. Supply Co., 229 S.W. 173; Lafferty v. Ins. Co., 229 S.W. 750; Trust Co. v. Hill, 223 S.W. 434; Rasch v. Bankers Life Co., 201 S.W. 919; Quissenberry v. Steward, 219 S.W. 625; State ex rel. v. Reynolds, 277 Mo. 14; Harris v. Ins. Co., 248 Mo. 318; Goddin v. Modern Woodmen, 194 Mo.App. 666; Banke v. Supreme Counsel, 179 Mo.App. 21; Kelly v. K. of F. M., 179 Mo. 608; Troll v. Home Circle, 161 Mo.App. 719; Winn v. Modern Woodmen, 167 Mo.App. 1; Gannon v. Gas Co., 145 Mo. 502; Foster v. Ins. Co., 233 S.W. 499; Bray v. Ins. Co., 238 S.W. 1095. On such affirmative defense, such as nonpayment of premium, etc., the burden of proof is upon the defendant. Foster v. Ins. Co., 233 S.W. 499; Lafferty v. Ins. Co., 229 S.W. 750; 26 C. J. 514, sec. 721; 19 Cyc. 935-936; McCartney v. Ins. Co., 45 Mo.App. 373. (c) But notwithstanding the finding of the referee as above indicated on all things necessary for a judgment for plaintiffs, and finding that the insurance premium had been paid; yet, the referee found against the defendant, not upon the theory that Auber Smith acted in a dual capacity in regard to this insurance business, representing both the plaintiffs and defendant, but merely upon the finding that said Auber Smith was at time an employee of the plaintiffs. The general rule is that the broker is the agent of the insured, but he may be and often is the agent of the insurer, each case depending upon the particular facts and transactions attending the negotiations and the special conditions and circumstances attending each case. A mere insurance broker who is entrusted by the insurer with the delivery of a policy and the collection of premium, is the agent of such insurance company for such purpose. For an insurance broker, as such, has no authority to receive a premium from an applicant for insurance. Farber v. Ins. Co., 191 Mo.App. 321; Pringle v. Ins. Co., 123 Mo.App. 714; Buck v. Ins. Co., 237 S.W. 841; Lehman v. Ins. Co., 183 Mo.App. 696; Realty Co. v. Markham, 163 Mo.App. 314; 22 Cyc. 1427. But this purported agency of the broker for the insurance company terminates upon delivery of the policy; thereafter, as far as the law is concerned, the broker is not presumed by any sort of implication to be the agent of the insurer. This general presumption that the broker is agent of the insurer ends and passes out of the case as soon as the policy is delivered. Pringle v. Ins. Co., 123 Mo.App. 714; Edwards v. Ins. Co., 100 Mo.App. 708; Grace v. Ins. Co., 109 U.S. 278; Buck v. Ins. Co., 209 Mo.App. 702. (d) Since perforce of the above authorities Auber Smith, as broker, was not thereby the agent of the plaintiff A. B. Smith Lumber Company in regard to this insurance policy in question, then that leaves only one thing left in the referee's report with and by which the referee finds against the plaintiff, and that is that Auber Smith "was an employee" of the plaintiffs and this fact being unknown to the defendant, makes the policy and the payment of the premiums to him of no force and effect. 22 Cyc. 1436; Fisk v. Assurance Co., 100 Mo.App. 550. The fact that the agent of the insurer company is an employee of the insured Lumber Co., as to matters having no relation to the insurance of the property does not give rise to a dual agency, such as to invalidate the transaction. But the same person may act for different purposes as agent to the different parties to the contract, so that for one purpose he may be the agent of the insured, although as to the procuring of the insurance he also represents the company. Dual Agency, 22 Cyc. 1445; British Am. Ins. Co. v. Cooper, 6 Colo.App. 25; Northrup v. Ins. Co., 48 Wis. 420; Hartford Ins. Co. v. Reynolds, 36 Mich. 522; Hamm Realty Co. v. Ins. Co., 8 Minn. 139; Parker v. Indemnity Co. (Neb.), 97 N.W. 281; Jellinghaus v. Ins. Co. (N. Y.), 6 Duer, 1; N. British Ins. Co. v. Lambert, 26 Ore. 199; Davis Lbr. Co. v. Ins. Co., 95 Wis. 226; 31 Cyc. 1443. The injunction of the law against dual agency applies only when the agent represents both parties as to the same transaction in matters which involved the exercise of discretion where the interest of parties are conflicting. And the rule does not disqualify one who is agent for one party for a certain purpose from acting as agent for the adverse party for an entirely different purpose. Acting for Both Parties, 31 Cyc. 1447, 1449; 32 C. J. 1055, 1056; Schutt v. Ins. Co., 159 Mo.App. 439. Where...