State v. Stone

• Decision Date: 04 December 1893
• Citation: 118 Mo. 388,24 S.W. 164
• Parties: STATE v. STONE.
• Court: Missouri Supreme Court

24 S.W. 164

118 Mo. 388

STATE v. STONE.

Supreme Court of Missouri.

December 4, 1893.

REGULATION OF INSURANCE — INDIVIDUALS AS INSURERS — CONSTRUCTION OF STATUTES — RIGHTS OF NONRESIDENTS.

1. Rev. St. 1889, c. 89, art. 2, regulating insurance and insurance companies, together with section 5910, providing that no "company" shall transact insurance business in the state without a certificate, must be construed in connection with section 5911, a later enactment, forbidding any "individual or association of individuals" to do such business without complying with the laws "governing the business of insurance," and applies to individuals as well as corporations.

2. A state has full power to prescribe the conditions on which an insurance business may be carried on in its limits by individuals, provided it does not discriminate in favor of its own citizens.

In banc. Appeal from St. Louis court of criminal correction; James R. Claiborne, Judge.

Information charging Percy Stone with a violation of the insurance law. Said defendant was fined, and, after motions for a new trial and in arrest of judgment were overruled, he appealed. Affirmed.

M. W. Huff and Lee, McKeighan, Ellis & Priest, for appellant. R. F. Walker, Atty. Gen., for the State.

BURGESS, J.

This is a suit begun upon an information based upon an affidavit made on April 25, 1893, by C. P. Ellerbe, the then superintendent of the insurance department of the state of Missouri, in which information the defendant is charged with the violation of the second clause of section 5916, Rev. St. 1889, by representing, as agent, certain individuals, and writing for them a policy of insurance, by the terms of which they agreed to indemnify one Emmitt Thoroughman against accident, before said individuals had procured a license to do business in Missouri. The defendant was arrested upon a warrant, was arraigned and pleaded not guilty, and upon the hearing of the evidence was fined $10 and costs. After a motion for a new trial was overruled, and also a motion in arrest, defendant brings the case here by appeal.

The evidence showed that the parties whom defendant represented in procuring this instance were 100 in number, residing in the state of New York, who were conducting insurance upon the manner of the ancient Lloyds; that they individually signed a power of attorney authorizing certain parties to write insurance for them individually, and that each policy written was in case of loss to be a charge against them individually, and not jointly, in a sum equal to one-hundredth of the amount of the liability incurred. By the terms of the agreement each individual agrees to deposit with an advisory committee the sum of $1,000, which is to be held for the individual account of such subscriber, and which is to be credited or debited, in case of gain or loss, as an individual account. The "insurance to be effected for and on behalf of each of the individual subscribers hereto" shall be in charge of certain parties "as attorneys in fact of each subscriber hereto." "The attorneys shall keep separate accounts for each of the subscribers to this agreement, and each subscriber shall at all times have access to his individual account." An advisory committee is provided for, who "shall cause to be made up, on the 31st of December in each year, all the accounts of the several subscribers hereto.

The several subscribers, in case the year's business was profitable, are then to receive such part of the profits credited to their individual accounts as the advisory committee shall determine, and are to receive a certificate for the balance. In case the accounts show that there has been a loss, then each subscriber is to make his individual account good. Any subscriber may withdraw by giving thirty days' notice, and the advisory committee may, if it is deemed advisable, compel the attorneys to cease acting for any particular individual. In certain conditions a member may assign his individual holding and liability to any other individual, if approved by the advisory committee. Neither of the subscribers shall be made jointly liable with the others, or with either of the others, but each subscriber shall only be made severally and separately liable to the amount authorized by him individually in the power of attorney given by him to the attorneys above mentioned; nor shall any joint liability be created on behalf of the subscribers hereto, in any manner arising out of the business to be carried on under this agreement, but only a several liability on behalf of each individual subscriber. No policy, however, shall be issued on behalf of any individual subscriber hereto, unless each of the individual subscribers insures for a like amount on said policy." There is no limit upon the liability of the several members. His whole property is liable for the payment of any liability incurred by him. The contract also provides that each one of the insurers, "in consideration of the premises and of the execution of this agreement by the others, does hereby severally agree, for himself individually, to and with the others, and with each of them, that he and his representatives and assigns will faithfully abide by and carry out his obligations and covenants hereunder." The policy written provides that "each of the subscribers hereto, as a separate underwriter, does for himself, and not one for the other, hereby insure (subject to the conditions herein) E. B. Thoroughman," etc. It further provides that in case of suit brought for loss under the policy it is to be begun against only one of the underwriters at one time a final decision to be decisive of such claim against each of the underwriters. "Each of the present subscribers, as a separate underwriter, binds himself severally, and not jointly, with any other for the true performance of the premises for the amount expressed to be insured by him."

Section 5916, Rev. St. 1889, under which defendant was prosecuted and convicted, reads as follows: "Any person or persons who in this state shall act as agent or solicitor for any individual, association of individuals or corporation engaged in the transaction of insurance business, without such person or persons first having obtained from the superintendent of the insurance department of this state the certificate authorizing him to act as such agent or solicitor, as required by section 5910, Rev. St. of this state, or shall act as agent or solicitor for any individual, association of individuals or corporation engaged in the insurance business before such individual, association of individuals or corporation shall have been duly authorized or licensed by the superintendent of the insurance department of this state to transact business in this state, or after such license has been suspended, revoked, or has expired, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be fined not less than ten, nor mere than one hundred dollars for each offense, or imprisonment in the county or city jail for not less than ten days, nor more than six months, or by both such fine and imprisonment." The specific charge against defendant is that he did willfully and unlawfully act as agent and solicitor for certain individuals (whose names are set out) in inducing and procuring one Emmitt Thoroughman to enter into a contract of accident insurance with said individuals before said individuals were duly authorized or licensed to do business of insurance. It is conceded by counsel for defendant that he was an insurance agent, and that he was acting as such at the time charged in the information, as that term is used and defined by section 5916, Rev. St., supra.

It may be conceded, as is contended by counsel for defendant, that the office of insurance superintendent is one created by statute, and that he can only grant a license to such persons as the statute designates, and a license issued by him to any other would be null and void. People v. Davis, 45 Barb. 494; Amerman v. Hill, 52 N. J. Law, 326, 19 Atl. 789; McGee v. Beall, 63 Miss. 455. And that, as a general thing, "association of individuals," as used in our statute, is synonymous with corporations, or applies to joint-stock companies having a capital stock divided into shares, and...