Summary
Error to the District Court of Allegheny county: Of October and November Term 1874, No. 177.
This was an action of debt, brought January 30th 1873, by The Travellers Insurance Company of Hartford, Connecticut, against Robert Thorne, John Heath and Andrew E. Baum.
The plaintiffs were a life and accident insurance company, incorporated by the state of Connecticut; the suit was for the breach of the condition of a bond of defendants to plaintiffs, dated July 25th 1870, in the penal sum of $5000. The bond recited that Thorne had been appointed agent of the company for the western part of Pennsylvania, during the pleasure of the officers of the company, and that as such agent he would receive divers sums of money, chattels and other effects of the company, and would be bound to keep accurate accounts of such property and of his receipts and disbursements, and to deliver, account and pay over the same when demanded and directed, according to the instructions of the officers of the company.
The condition was that Thorne should promptly pay to the company the amounts received from timo to time, either as premiums collected or advances made by the company for any purpose, and should perform all the duties as agent of the company, as directed according to their charter, by-laws, rules and regulations then existing or which might be adopted by the company during the time he should officiate as agent, and should deliver all the property which he might receive and hold as agent, to his successor or to such other person as the company or its authorized officers might direct.
The plaintiffs’ affidavit of claim was that the defendants were indebted to them in the sum of $3877.21, the amount due for premiums and interest on policies issued by Thorne, as agent of plaintiffs, as stated in an annexed bill of particulars of the premiums and interest; with'the names of the insured, and the number of the policies, which plaintiffs claimed to recover by virtue of the above-mentioned bond, &c.
The statement contained a great number of items of charges and also items of credit for commissions, showing the balance due from Thorne to be $3877.21, as set out in the affidavit.
The affidavit of defence was:—
1. That Thorne had not been appointed agent, in the form required by the laws of Pennsylvania relating to foreign insurance companies, and never acted for plaintiffs as their legally authorized agent.
2. That before and at the time the persons named in the specifications were insured, the plaintiffs had not complied with the provisions of the several Acts of Assembly relating to foreign insurance companies, and did not appoint agents according to the laws of the Commonwealth.
3. That Thorne did not receive the sums of money mentioned in the plaintiffs’ specification and not any part as the legally authorized agent of plaintiffs.
4. Defendants “ deny each and every item contained in said specification, and say they do not owe the plaintiffs the sum or any part thereof.”
5. That the conditions of the bond were fully complied with by Thorne; that all moneys received by him for the plaintiffs, after the date of the bond, were paid to them, after such deduction as Thorne was entitled to; that the defendants could not be more specific on this point because the specification did not give the numbers nor dates of the policies on which the items were alleged to have been received by Thorne.
The Act of April 11th 1868, Pamph. L. 831, 1 Br. Purd. 796 et seq., consolidating, &c., the laws of Pennsylvania in relation to foreign insurance companies, provides :—
Sect. 2. That any such * * * company, * * * desiring to transact business in this state, shall first appoint an agent or attorney resident in this state, on whom process can be served, and file in the office of the auditor-general * * * a certified copy of resolution of the board of directors, * * * appointing such attorney or agent, which appointment shall continue until another agent or attorney be substituted, and also a certified copy of the charter or other authority under which said company or association is organized. * * *
Sect. 5. That every such * * * company * * * shall, before issuing or agreeing to issue any policy, or transacting any business whatever in this Commonwealth, forward to the auditor-general the statement required by this act, together with a written application for a license to transact their said business in this state, signed by the agent appointed by such company; and the said agent shall file a bond in five thousand dollars, with two sureties, residents of the county in which the principal business office of said agent is to be established, which shall be approved by the district attorney of said county, conditioned for the faithful discharge of all the duties enjoined upon him by the provisions of this act, and for the payment of all moneys received by him, or payable by him for the use of the Commonwealth; which bond shall be acknowledged * * * and recorded in the office of the recorder of deeds of said county and deposited in the office of the auditor-general, and certified copies thereof, under the seal of the recorder, shall be as good evidence as the original would be in any action brought against such agent or his sureties on such bond.
Sect. 9. That the auditor-general shall have power to revoke and annul any license issued by him under the provisions of this act, when he shall be satisfied that the assets of said company or association have become impaired to the extent of more than thirty per centum thereof, or in case he shall ascertain that said license was originally obtained by fraud or misstatement, or for the misconduct of any agent. * * *
Sect. 10. That every agent shall have full power and authority to transact business for the company for which he is licensed in each and every county of this Commonwealth, either in person or by any subordinate agent * * * acting under his authority and direction, and he shall be immediately responsible to the Commonwealth for the tax on all premiums received in the state, whether the same are received by him directly or through his subordinate agents; and the said agent may from time to time appoint as many subordinate agents as he may deem proper, and certify the names and residences of the same to the auditor-general, who thereupon shall issue to each of said subordinate agents, upon payment of the usual fee of his office, a certificate showing that the company has complied with the requirements of this act, and that the agent thereof has full power and authority to transact business in any part of this Commonwealth, and that he has designated such person as his subordinate agent; and no person shall act as a subordinate agent until he has received such certificate.
Sect. 12. That any person receiving premiums or forwarding applications, or in any other way transacting business for any insurance company not incorporated by this state, without having received authority so to act for such company, agreeably to the provisions of this act, or in any other way violating the provisions of the same, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be fined five hundred dollars for each of-fence; * * * and any party doing business by receiving applications or forwarding policies to any person not duly authorized to act as agent, shall be fined in a like sum of five hundred dollars for each offence, and be prohibited from doing business in this state until such fine be fully paid.
Sect. 13. For the better enforcement of the provisions of this ■act, it shall be the duty of the district attorneys, in any of the counties of this Commonwealth, to enforce the provisions and requirements of the same, for which each and every district attorney is hereby ¡empowered, * * * once in each and every year, to examine any license agent or agents transacting or carrying on business in -the .county for which said district attorney is elected, to examine the books of all such agencies, so as to satisfy himself that such agent or agents have fulfilled the provisions and requirements of this act, and paid all taxes due the Commonwealth, and make report thereof once in each and every year to the auditor-general; * * * and it shall be the duty of the said district attorneys to enforce this act and its penalties against any such agents, persons, companies or associations as aforesaid, by suit or suits at law, in the name of the Commonwealth. * * *
The case was tried, April 30th 1874, before White, J.
1. Under objection and exception, the plaintiffs read the account appended to their affidavit of claim.
2. They then, under objection and exception, gave in evidence three certificates of the auditor-general, each dated January 28th 1871, viz.:—
“ Whereas, the Travellers Insurance Company, located at Hartford, in the state of Connecticut, appointed and constituted William W. Allen their agent and complied with all the requirements of an Act, * * * approved the llt-h day of April 1868. And whereas, license was granted to said agent, in conformity with the act aforesaid, empowering him to transact business for and in behalf of said company in each and every county of this Commonwealth, for and during the period from January 1st to December 31st 1869. And whereas, said agent has certified to me the appointment of Robert Thorne, of Pittsburg, as subordinate agent of said company:
“ Now, therefore, I, John F. Hartranft, Auditor-General of the state of Pennsylvania, in accordance with the requirements of Act aforesaid, do hereby certify that Robert Thorne was duly appointed and authorized by the said William W. Allen, to transact business as the subordinate agent of the said company for and during the term for which the aforesaid agent was licensed.”
The other certificates were precisely similar, except that they certified the appointment of Allen and Thorne as agents for-the years 1870 and 1871, respectively.
The plaintiffs then proved that papers produced were the monthly reports of Thorne made to the home office of plaintiffs, and that the reports of the life department were made up at the home office and sent to the agent for the purpose of having him send on the money.
3. They then offered severally the monthly accounts of the life department for the months of June, July and August 1870, and the monthly accounts of the accident department for the month of September 1870, and previous months.
The defendants objected to each offer; the offers were admitted, and several bills of exception sealed.
The accounts of the life department showed a balance of §1260.32 due by Thorne; the accounts of the accident department, a balance of §1438.81 due by him.
The plaintiffs then rested.
4. The defendants called Thorne, and offered to prove by him and other witnesses that he never received from the plaintiffs, or from the auditor-general of the state of Pennsylvania, any appointment or license to act as agent for plaintiffs, and never received any notification that he had been appointed as agent for the said plaintiffs, for the purpose of showing that the plaintiffs had not complied with the law of this state prior to or at the date of the bond in suit.
The offer was rejected, and a bill of exceptions sealed.
5. Defendants then proposed to prove that plaintiffs did not comply with the requirements of the Act of April 11th 1868, prior or subsequent to the date of the bond in suit;, and that Thorne, the alleged agent of plaintiffs, was not authorized or licensed by the auditor-general of the state of Pennsylvania to act as subordinate agent of plaintiffs, and that he never received from the auditor-general the certificate prescribed by the Act of 11th April 1868.
This was objected to by the plaintiffs.
The court permitted the defendants to show that Thorne never received- a certificate from the auditor-general, rejected the remainder of the offer and sealed a bill of exceptions.
Thorne then testified that he never received from the auditor-general any certificate of his appointment as subordinate agent or license as such.
6. Defendants then proposed to prove that Thorne never knew that there was any certificate or authority issued to him as subordinate agent of said plaintiffs until alleged by plaintiffs on this - trial, to show that he never was lawfully authorized as agent of plaintiffs.
This was objected to by plaintiffs, rejected by the court and a bill of -exceptions sealed.
7. The defendants then offered to prove that he never received a certificate from the auditor-general to act as agent for the plaintiffs ; that being threatened with prosecution for violation of law, on or about April 15th 1871, he examined the records of the auditor-general’s office: that at that time the record or papers on file of the plaintiffs did not contain the names of any subordinate agents in the state, nor anything to show that the plaintiffs had any agents in this state; that after the plaintiffs gave in evidence the certificates of the auditor-general that the said plaintiffs had complied with the law, and appointed Thorne subordinate agent, he went to Harrisburg, and on Saturday last searched and caused to be searched the records of the insurance department, which, by virtue of the law. of 1873, is now the custodian and has charge of the records, books and papers of the auditor-general’s office, in relation to and touching all insurance business; that he found in said department two papers containing a large number of names, which papers purported to be lists of subordinate agents appointed by the said Travellers Insurance Company for the years of 1869 and 1870; that said papers'purported to be made out and sworn on the 21st day of April 1871; that he had examined the papers of .this company, on file in the auditor-general’s office, on or about the 15th day of April 1871, and found no such papers as now appear in the office of the aforesaid insurance department, in relation to the appointment of subordinate agents.
The offer was objected to by plaintiffs, rejected by the court and a bill of exceptions sealed.
The defendants then gave in evidence the following papers:—
“List of agents who held the appointments of the ‘Travellers Insurance Company,’ to transact the business within the Commonwealth of Pennsylvania during the year 1869:—
William W. Allen, .... Philadelphia;
* * * * * * *
Robert Thorne, ... . . . Pittsburg.
* * * * * * *
“I hereby certify the foregoing to be a true, complete and correct list of all agents appointed to transact business for the Travellers Insurance Company, within the Commonwealth of Pennsylvania, during the year 1869, according to the best of my knowledge and belief.
Wm. W. Allen, General Agent and Att’y.
Philadelphia, Pa., April 21st 1871.”
“Insurance Department of Pennsylvania,
Harrisburg, May 2d 1874.
“ I hereby certify that I am Insurance Commissioner of Pennsylvania, appointed and commissioned in pursuance of an Act entitled ‘ An Act to establish an Insurance Department,’ approved the 4th day of April, A. D. 1873, and that in accordance with the requirements of said act, the books, papers and records in the office of the Auditor-General, relating to the business of insurance, have been transferred to this department and are now in my charge and custody, and that the foregoing is a correct copy of a paper found among the records aforesaid and endorsed ‘ List of Agents of the Travellers Insurance Company, in the state of Pennsylvania, 1869.’
“In testimony whereof, I have hereunto set-my hand and caused my official seal to be affixed the day and year aforesaid.
J. M. Forster, Insurance Commissioner.”
“List.of agents who held the appointments of the Travellers Insurance Company to transact its business within the Commonwealth of Pennsylvania, during the year 1870
William W. Allen,
Philadelphia;
Robert Thorne, * *
Pittsburg.” * *
Attached to this paper is a certificate of W. W. Allen ; also a certificate of J. M. Forster, Insurance Commissioner, precisely like those to the previous list, except that the agents are stated to be for the year 1870.
8. Defendants then proposed to prove that on or about the 15th day of April 1871, plaintiffs, by their secretary, Rodney Dennis, stated, that prior to that date the company had not complied with the Act of 11th April 1868; but that the company could make out the papers so that it would appear in the auditor-general’s office that the company had complied with the law; that at that date the lists of agents sent to the auditor-general’s office for the years 1869 and 1870, and contained in certified copies in evidence, were not made out and filed in said office.
This for the purpose of proving the company had not complied with the law, and had not the right to do business in this state.
This was objected to by plaintiffs, rejected by the court and a bill of exceptions sealed.
Defendants then gave in evidence an agreement, dated August 13th 1866, between the plaintiffs and Thorne, appointing him their agent.
The agreement stipulated that the plaintiffs should provide a suitable office in Pittsburg, pay certain expenses, &c.; Thorne to devote his entire time to the interests of the company in soliciting business, circulating its literature, &c., and performing such acts as came within the scope of a faithful soliciting and supervising agent; and providing for his compensation.
The territory over which Thorne was to exercise supervision comprised twenty-three counties in Western Pennsylvania.
Appended to the agreement was a writing signed by Thorne, and dated September 19th 1870, releasing to other agents his supervision of eleven of the twenty-three counties.
Thorne testified that he commenced in 1866 doing business for the plaintiffs under the agreement; that in January and September 1870, he had borrowed from the plaintiffs, by an agreement with their secretary, the money which had been received by him for premiums and which was then in his hands, the loan being about $2500; he prepared his account with the company, found the balance in his hands and retained it according to the agreement; all the money in the account was received prior to July 25th 1870, except an item of $137.30, received August 6th 1870. He settled with the secretary on the 5th of November 1870, being on the accident department, for all the money received by him beyond the loan and paid him $120, the balance then due the plaintiffs ; that closed his business with the plaintiffs. This included all that the secretary claimed of him, except what was embraced in the loan. He had appointed twenty-five or thirty agents under him ; he did business by sub-agents; sometimes hired them without consulting the company ; sometimes notified the secretary of their appointment ; he sent some of their commissions to witness; sometimes sent them directly to the agents; witness’ relation as agent was dissolved November 5th 1870. He gave other testimony for the purpose of showing that he was not indebted to the plaintiffs and generally to show that there was no liability of defendants on the bond.
The defendants rested.
The plaintiffs, in rebuttal, gave in evidence the license of the auditor-general to the plaintiffs, dated January 1st 1870, viz. :—
“ Whereas, the Travellers Insurance Company of Hartford, Connecticut, have appointed William W. Allen their attorney, resident of this Commonwealth, on whom process of law can and may be served, and have, in all other respects, complied with the provisions of the Act, * * * approved the 11th day of April, A. D. 1868. And whereas, the said William W. Allen has applied in writing to the auditor-general of this state, for a license to transact business as the agent of the said company, in each and every county of this Commonwealth, and has complied with the provisions of the act aforesaid.
“I, therefore, by virtue 'of the authority vested in me by the act aforesaid, grant a license to the said Travellers Insurance Company, to carry on their business, by their agent aforesaid, in each and every county of this Commonwealth, for the period of one year from the date hereof.”
R. Dennis, secretary of plaintiffs, testified that he had not agreed to lend Thorne the money in his hands due to the company. He further testified as to the state of the accounts between Thorne and plaintiffs, and in contradiction of Thorne’s testimony.
There was testimony from other witnesses to the same effect.
The evidence then closed on both sides.
The following are points of the defendants and the answers :—
3. The three papers purporting to be certificates signed by the auditor-general, and dated June 28th 1871, are incompetent and insufficient evidence to prove that the plaintiff complied with the said Act of 11th April 1868, and there being no other evidence of this fact, the plaintiff cannot recover.
Answer: “ Refused, because there is other evidence before the
4. It was unlawful for the plaintiff to transact insurance business in this state by subordinate agents, not appointed and authorized agreeably to the provisions of the 10th sect, of said act; if Dr. Thorne was not appointed a subordinate agent in the mode therein prescribed when the plaintiff obtained the bond sued on, the bond is void and the plaintiff cannot recover.
Answer: “ Refused. The bond of an agent may be given . before, and in contemplation of his regular appointment.”
5. There is no competent or sufficient evidence in the cause, that Ur. Thorne was ever appointed in the mode prescribed in the 10th sect, of said act, and no evidence that he ever received from the auditor-general the certificate of appointment required by the 10th sect, of said act. Therefore the plaintiff is not entitled to recover in this suit.
Answer: “ Refused. There is sufficient evidence to show that he was duly appointed a subordinate agent by the insurance company. His failure to take out a license from the auditor-general is not sufficient defence in this action.”
6. If the jury believe the uncontradicted testimony of Dr. Thorne, that he never received from the auditor-general a certificate of his appointment or authority to act as a subordinate agent of plaintiff, in pursuance of the 10th sect, of the Act of 11th of April 1868, and had no such certificate or authority when he executed the bond in the suit, the bond is void and the plaintiff cannot recover.
7. The certified copies of the list of subordinate agents for 1869 and 1870, filed by plaintiff in the auditor-general’s office, on the 21st of April 1871, given in evidence by defendants, taken in connection with the uncontradicted evidence of Dr. Thorne, that he never received a certificate of appointment or other authority from the auditor-general, is conclusive evidence that he was not authorized to act as subordinate agent in the mode prescribed by law; and if the jury believe this evidence he was not lawfully authorized at the date of the bond sued on ; and the bond is therefore void and the plaintiff cannot sustain this action.
16. It was unlawful for the plaintiff to do business in this state by subordinate agents, without first having such agents appointed in the mode prescribed by the 10th sect, of the Act of April 11th 1868. It was plaintiffs’ duty, under this law, to see that Dr. Thorne was so appointed; and if the bond in suit was taken when Thorne had not the proper authority from the auditor-general, the bond is void, and plaintiffs cannot recover, although the company had complied with the requirements of the aforesaid act in all other respects.
17. The three papers purporting to be certificates of the auditor-general, dated June 28th 1871, the certified copies of the lists of agents, sworn to 21st April 1871, together with the testimony of Dr. Thorne, show that Thorne had no lawful authority to act as subordinate agent when the bond in suit was executed. The bond is therefore void, and the plaintiffs cannot recover.
The 6th, 7th, 16th and 17th points were refused without qualification.
The court charged:—
* * * “ It is contended, that, as the plaintiffs are a foreign insurance company, and have not complied with the provisions of the Act of Assembly of 11th April 1868, they could not legally do any business in this state, and can maintain no action relating to, or arising out of, their insurance business in the state. [But the plaintiffs have given in evidence the license issued by the auditor-general of the state, under the seal of his office, dated January 1st 1870, reciting that the plaintiffs have complied with the requirements of that act, and are duly authorized and licensed to do business in the state for the year 1870. That license, I instruct you, is conclusive evidence that the plaintiffs had a right to do business as an insurance company in this state during the year 1870.]
[“ But the defendants further contend that Dr. Thorne never received from the auditor-general a license to act as subordinate agent for the year 1870, and he testifies that he never had such a license. The plaintiffs, however, have put in evidence the certificate of the auditor-general under the seal of his office, dated June 28th 1871, reciting that he was duly appointed and authorized to act as a subordinate agent for the year 1870. From these official documents, it would seem that the company had complied with all the requirements of the law, in reference to his appointment as a subordinate agent. He acted as such agent, in that capacity did business for the company, and received the money they now seek to recover from-him. As such agent, he gave the bond in suit, reciting that he was their agent, and he and his bail signed that bond. One condition of the bond was that he ‘shall well and truly perform all and singular the duties as agent of said company, as directed, according to the provisions of the charter, by-laws and regulations of said company.’ One of his duties as agent was to take out his license from the auditor-general. If he failed to do so, it was not the fault of the company, but his own neglect of duty. After receiving the money on the faith of his agency and on the faith of that bond, neither he nor his • sureties can resist payment of it, simply because he had neglected to take out his license. I therefore say to you that this is not sufficient ground of defence in this action.”] * * *
The verdict was for the plaintiffs for $1874.08.
The defendants took a writ of error, and assigned, amongst others, the following errors:—
1. Admitting the evidence mentioned in the first bill of exceptions.
2. Admitting the evidence mentioned in the second bill of exceptions.
3. Admitting the evidence mentioned in the third bill of exceptions.
4. Rejecting the offer mentioned in the fourth bill of exceptions.
5. Rejecting the offer mentioned in the fifth bill of exceptions.
6. Rejecting the offer mentioned in the sixth bill of exceptions.
7. Rejecting the offer mentioned in the seventh bill of exceptions.
8. Rejecting the offer mentioned in the eighth bill of exceptions.
10, 11, 12, 13, 14, 18,19. The answers to the defendants’ 3d,
4th, 5th, 6th, 7th, 16th arid 17th points.
21, 22. The parts of the charge in brackets.
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
