Wells v. National Life Ass'n of Hartford

• Citation: 99 F. 222
• Decision Date: 09 January 1900
• Docket Number: 812.
• Parties: WELLS v. NATIONAL LIFE ASS'N OF HARTFORD.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

99 F. 222

WELLS v. NATIONAL LIFE ASS'N OF HARTFORD.

No. 812.

United States Court of Appeals, Fifth Circuit.

January 9, 1900

The petition in this case shows, substantially, that the defendant, the National Life Association of Hartford, on June 6, 1894, entered into a contract in writing with Adolph J Miller, whereby it appointed him its manager for the state of Arkansas and a part of the state of Texas, designated in the contract. This writing expressly provided that the contract then entered into might be sold, assigned, or transferred with the written consent of the company, and not otherwise and provided that the contract should terminate by limitation 10 years from and after the date above written. Thereafter Miller did sell, assign, and transfer this contract to the plaintiff, W. T. Wells, and one W. T. Shaw; and on March 23 1896, the defendant expressed in writing its assent to this transfer, and by the same writing agreed to extend the time of the contract so as to run 10 years from the date of this written assent. On June--, 1896, the plaintiff and Shaw, by and with the consent of the defendant, released their right under the contract to represent the defendant in the state of Arkansas; and the defendant, in lieu thereof, conceded to them all rights under the contract and agreements to solely represent the defendant throughout the entire state of Texas for and during the 10-year period dating from March 23, 1896. On August--, 1896, the plaintiff, for a valuable consideration, purchased the entire interest of Shaw in the contract, by and with the consent and approval of the defendant, and thereby became the sole manager of the defendant for the entire state of Texas. By the terms of the contract it was made the duty of the manager to solicit and procure applications of persons to become members of the defendant company; to procure the appointment of agents in the territory under his charge, whose duty it should be to solicit applications; to forward all such applications to the home office of the company for approval or rejection by the officers thereof; to receive policies and deliver the same, and to receive the first premium; and to thoroughly inspect all business written by any agents appointed by him. It was made his duty, and he bound himself, to account for, deliver, and pay over on demand, according to the instructions or requirement of the company, all sums of money which he might receive as premiums, advances, or otherwise, and all policies of insurance and other effects which he might receive on account of the company, whether such sums of money or other property were received by him or by any clerk, agent, or other person employed by him. He agreed that during the continuance of this contract he would devote his entire time and energies to the service therein mentioned, and would perform such other duties as should be required of him by the officers of the company in order to thoroughly develop and work the territory confided to his management. The authority of the manager and his agents was strictly limited, to the extent that neither he nor his agents should make, alter, or discharge any contract between the company and others, or waive forfeiture, extend credit, or make collections of money for its account (the first premium excepted), unless he should first be provided with receipts signed by the secretary of the company. For his compensation he was to receive a specified per cent. of the original and the renewal premiums charged on the different classes of insurance to be written by the company. It was expressly provided that he should receive no further remuneration for any service than as stated in the contract, and that he should not contract debts in the name of the company, unless specially authorized in writing, and that, in consideration of the specified compensation, he should ay any and all agency expenses, medical examination fees, and all license fees in the state in which he was to do business, together with the state, county, and municipal taxes which might be required upon the first year's business or premium receipts. It was provided further that, if the manager should neglect or refuse to thoroughly develop and work the territory allotted to him, then the company, at its option, might employ other agents in any portion of the territory so neglected, without otherwise affecting the contract, and that the manager should have no claim on the business so effected by such other agent or agents so employed; that otherwise the company should not appoint other agents within his territory.

The petition avers: That the plaintiff, since he first became manager for the defendant, has devoted his entire time and energies to representing the defendant, and in carrying out and performing all of the duties devolving on him by virtue of the contract to thoroughly develop and work the territory alloted to him. That from the time he first became manager for the defendant up to the breach of the contract by it, he thoroughly worked and developed the business in all of the territory allotted to him, and has not neglected or refused to do the same. That during the time he was so engaged he had correspondence with no less than 300 subagents in regard to canvassing, soliciting, and securing policies of insurance for the defendant in the state of Texas, and during that time has had not less than 100 agents actively at work soliciting and securing for the defendant policies of insurance of the classes described in the contract. That the defendant is the only insurance company of the natural premium and old-line insurance companies that writes under-average insurance and substandard insurance (that is, insurance upon negroes; saloon keepers; persons of over and under weights; persons of light physical impairment; debtors or creditors; persons of heart murmur; telephone, telegraph, sawmill, and railroad men and women), and that by reason thereof the plaintiff's contract with the defendant was a most advantageous and profitable one to the plaintiff, as all of these risks are much more easily procured than first-class risks or standard insurance. That up to the time of the breach by the defendant the plaintiff had fully and faithfully carried out his part of the contract, and performed all other duties required of him by the officers of the company. That he has made a scientific study of the insurance business for years, and is a person of great experience in that business, and possessed of more than ordinary push and energy, tact and sagacity, and is in every way well fitted for the duties that devolved upon him under the contract. That at the time he purchased the contract he paid therefor $1,500 in cash, with the knowledge and consent of the defendant. That the contract could not have been purchased for less money, and that the price paid for it was reasonable. That in order to put the business of the defendant on a firm footing in Texas, so as to readily procure applicants to take policies in that company, it was necessary to advertise the same, and to place the merits thereof before the people of Texas, and that in order to do this he had many thousands of circulars printed, setting forth the advantages of the company, and the benefits to be derived therefrom by those who would take policies therein. That he had these circulars distributed all over the state of Texas; sending them to many thousands of persons who would be likely to take insurance in the company, and especially to a great many insurance agents. That, in addition to his correspondence with a great many insurance agents in different parts of Texas, and his employment of over 100 men to work under him to solicit and sell insurance for the defendant company in that state, he was compelled to go in person to different cities of the state, and see the agents, and give them proper instructions for procuring applicants for insurance in the defendant company, and was compelled to incur reasonable expenditures incident to such traveling and establishing subagencies for the defendant company. That the publication and distribution of such literature, the cost of postage and stationery to send the same, and his traveling expenses incurred, amounted to the reasonable sum of $1,000, made up as follows: Expended for postage, $700; for printing circulars and stationery, $100; and for traveling expenses, $200. That, from the time he acquired the contract until the same was breached by the defendant, he gave all of his time to the faithful performance of the services required, and that for the period thus engaged, namely, 10 months his services were reasonably worth $250 per month, making for the 10 months $2,500, which is an entire loss to the plaintiff, by reason of the defendant's breaching its contract. That it was necessary to do a great deal more work during the first 12 months after the plaintiff acquired the contract, in order to establish the company in Texas, than at any other time thereafter. That during the time of the plaintiff's service he did succeed in writing about $150,000 of insurance for the defendant company, and applicants in Texas acquired policies of insurance in the defendant company aggregating that amount by and through his efforts prior to the date of the breach of the contract by the defendant, and while he was advertising the company and establishing agencies. That the greater part of the insurance thus written by him were rejected risks from the Hartford Life & Annuity Association and from other insurance companies. That the business of the defendant company in Texas was daily increasing, and that after the date of the breach of the contract by the defendant, by reason of the premises in his petition alleged, it would have involved...