State v. Alley

• Decision Date: 08 February 1910
• Docket Number: 13,862
• Citation: 51 So. 467,96 Miss. 720
• Court: Mississippi Supreme Court
• Parties: STATE OF MISSISSIPPI v. HARRY C. ALLEY

51 So. 467

96 Miss. 720

STATE OF MISSISSIPPI v. HARRY C. ALLEY

No. 13,862

Supreme Court of Mississippi

February 8, 1910

FROM the circuit court of Lauderdale county, HON. J. L. BUCKLEY Judge.

Alley appellee, was tried on the charge of unlawfully assuming to act as a soliciting insurance agent for a foreign insurance company, in violation of the statute law of this state. From a judgment in favor of appellee the state appealed to the supreme court.

The facts relative to this case are fully set forth in the following agreed statement:

It is agreed by and between F. M. West, attorney for the state insurance department of Mississippi, and L. C. Boyle attorney for defendant above named, that on the 22d day of May, A. D. 1908, W. J. Miller, deputy insurance commissioner of the state of Mississippi, made an affidavit before E Nichols, a justice of the peace in and for district No. 4 of Lauderdale county, Miss., charging that the said Harry C Alley did unlawfully in the said county and state, on the 22d day of May, A. D. 1908, at Meehan Junction, in said district, county, and state, unlawfully assume to act as an insurance agent by soliciting insurance and attempting to insure against destruction by fire the property of the Cotton States Lumber Company at said Meehan Junction, Miss., without first securing a license from the insurance commissioner of the state of Mississippi to act as such insurance agent; the affidavit concluding with the clause "against the peace and dignity of the state of Mississippi." It is further agreed by above-named counsel that the said W. J. Miller, deputy insurance commissioner as before said, did on the 22d day of May, A. D. 1908, before E. Nichols, a justice of the peace in and for district No. 4 of Lauderdale county, state of Mississippi, make affidavit that the said Harry C. Alley, the defendant above named, did on the 22d day of May, A. D. 1908, at Meehan Junction, in said district, county, and state, unlawfully solicit insurance and attempt to insure the property of the Cotton States Lumber Company at Meehan Junction, Miss., in the Manufacturing Lumbermen's Underwriters, same being a foreign insurance company not admitted to do business in this state; the affidavit concluding with the clause "against the peace and dignity of the state of Mississippi." It is agreed by above-named counsel that the said affidavits charge two separate and distinct offenses, as appears from the said affidavits, and that said affidavits were made by the said W. J. Miller, as deputy insurance commissioner of the state of Mississippi, upon information and belief.

It is further agreed by said counsel that the records in the office of the insurance commissioner of the state of Mississippi show that the said Harry C. Alley has not procured from the said insurance commissioner a certificate of authority that the said Manufacturing Lumbermen's Underwriters has complied with the laws of the state of Mississippi relating to insurance and authorized to transact an insurance business in said state and that said Alley was authorized to represent them; and it is further agreed by said counsel that the records of the office of the said insurance commissioner show that the said Harry C. Alley has not paid to the said insurance commissioner the privilege tax required of an insurance agent by the laws of the state of Mississippi. It is further agreed by the said counsel that the records of the said office of the said insurance commissioner show that the said Manufacturing Lumbermen's Underwriters are not licensed by the insurance department of the state of Mississippi to do an insurance business in the state of Mississippi. It is further agreed that the said Harry C. Alley was on the 22d day of May, A. D. 1908, arrested upon the charges contained in said affidavits, and that he gave bond, with good and sufficient sureties as provided by law, in the sum of $ 150 in each case, guaranteeing his appearance before Hon. E. Nichols, justice of the peace of the aforesaid district, county, and state, at a regular court day to be held by said justice of the peace at Meehan Junction, Miss., on the 16th day of June, A. D. 1908.

The plan comprehends an exchange of contracts between manufacturing lumbermen whereby the mill properties of such manufacturers will be protected against loss from fire. None but manufacturing lumber concerns enter into these contracts, and then only such concerns whose business and moral standing and methods are such as to make them respectively satisfactory to all who have entered into such contractual relation. Owing to the number of contracts thus written, the exchange of contracts is accomplished through the medium of an attorney in fact, to wit, Harry Rankin & Co. Each concern entering into contractual relation executed its separate power of attorney to said Harry Rankin & Co. All powers of attorney are to same effect and purpose as Exhibit A. For convenience of expression the concerns entering into these contracts are called "subscribers." The attorney in fact acts under direction of an advisory committee, which committee is selected from among the "subscribers" and serves without pay. One of the "subscribers" acts as treasurer. The details of the arrangement are not fully set forth in any written instruments, or further than in writings hereinafter referred to, but are found in the transactions actually executed through attorneys in fact under the direction of an advisory committee as hereinafter set forth; the interest on the individual participants being protected from any unsatisfactory action by the privilege of withdrawal at any time. A subscriber's application, power of attorney, and note being satisfactory to the subscribers, a contract is executed to him in the form of the contract the basis of complaint herein, a copy of which is attached, marked "Exhibit B"; the clauses of the printed slip attached varying with circumstances, and the contract being executed by each and all the then subscribers.

Upon the delivery of the contract, the subscriber pays to the attorneys in fact, and they deliver to the treasurer, the amount of the premium stipulated in the policy; the rate being fixed in each case at the rate commonly charged for the similar risks by reputable and responsible corporations engaged in the business of writing insurance for profit, and the terms of the contract, from the words "in consideration of the stipulations herein named," being copied from the standard forms used by corporations engaged in the business of writing insurance for profit, except the words "for each subscriber the sum opposite his name on the reverse side hereof" and the paragraph near the end of the contract, beginning with the words "In event of litigation herein." The individual amount of indemnity which each subscriber agrees to exchange by the terms of each of such respective contracts executed by him, it, or them to each of the other subscribers is determined by the relative risk against which he, it, or they may be indemnified, so that the indemnity is exchanged by each subscriber with the others on a proportionate basis; that is to say, if the subscriber is indemnified in a large sum, on a greater risk, he undertakes to indemnify each of the others in a larger proportionate amount, and if the risk indemnified be smaller the indemnity he exchanges with other subscribers respectively and severally is relatively smaller. The amount of the maximum indemnity to which the power of attorney limits the contemplated liability of each subscriber to any other subscriber is fixed in the same way in relation to the risk against which such subscriber is indemnified. The premium paid by the subscriber to whom contract of indemnity has been issued, when paid to the treasurer, is credited to the several other subscribers in the same proportion in which they have assumed liability toward the subscriber paying the premium. The sums thus credited are kept in separate and distinct accounts for each subscriber. From these funds thus kept, together with the amount agreed to be paid the attorneys in fact for compensation for services and expenses, is deducted, in case of indemnified loss by a subscriber, the proportion of the loss of such subscriber which the amount for which the other subscribers agreed to indemnify him, it, or them bears to the total amount of indemnity given to the subscriber suffering the loss.

The premiums collected by corporations writing insurance for profit are fixed by experience at a sum sufficient to pay the average of losses and an average expense of making the business of about 40 per cent. of the total premiums paid together with a profit on the business, and the premiums collected under arrangement herein referred to are expected to be, and have been during the ten years the arrangement carried on under the phrase "Manufacturing Lumbermen's Underwriters" has been in effect, sufficient to more than pay all expenses and losses and effect a saving of more than $ 700,000 to the subscribers. The indemnity exchanged is upon scattered properties, no two of which could suffer in a common calamity; but, to provide a convenient method of collecting additional funds in case of the coincidence of numerous separate disasters, the nonnegotiable notes assessable by the advisory committee are taken. These notes do not limit in any way the amount of the individual liabilities of each subscriber to the others respectively and severally, and are only provided as a convenience for collection and payment in the event of necessity and to the amount thereof. The surplus in the funds derived from premiums and credited to the respective subscribers, after the payment annually of expenses and indemnity, is left to accumulate until...