The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-01-23
A Leading Agency Sued for Alleged In
fringement Of Its Terms.
The Suit Brought as a Test Case-The Terms
of the Agreement Made by the
Local Association.

eleven fire insurance companies The complaint
alleges that for the purpose of equalizing rates
and enabling all the agencies to do profitable
business, local manager was appointed, in the
person of j. 7. Ashbrook, and that all the com
panies agreed to abide by the rates that he
fixed.
1t is further alleged that Cleaveland & Adams
have repeatedly violated this agreement, several
specific accusations being made. Among these,
it is charged that the firm took 5000 on the
street-car stables. at less rate than was pro
vided; on Nordyke & Marmon's for $4,000, on
Nos SO and 81 South Meridian street for $685.,
OOO and on A. D. Streights chair factory, the
encaustc tile works, and other property, for
various amounts 1t is further alleged that
Cleaveland & Adams have paid commissions to
to George w Wishard Joshua II. Aldrich and
others for getting them insurance, which is also
a clear violation of the agreement. Mr.. Metzger
says that he has been in the insurance business
for twelve years, and that his annual income
from it is about S., 600 He claims that by cutting
rates the defendant has deprived him of risks
which he otherwise would have had, and he
therefore demands judgment for $1,000 and all
proper relief.
An insurance agent stated to journal report
er yesterday that this was intended merely as a
test case, to determine the validity of the com
pact entered into by the companies and that
there was desire to make Cleaveland & Adams
suffer more than by being defendants in the suit
Mr. cleveland was also interviewed He said
that he did not regard this as friendly suit
by any means but he believed it instigated
by number of rival agencies, who united in
making against his firm because it was doing
a large part of the business of the city So FAR
as the compact was concerned. neither he nor his
partner had violated its provisions, and he did
not fear any result that might be attained by the
prosecution of the case.
The Journal has a copy of the compact the
principal features of which are of general inter
est They as follows
We agree strictly and honorably to the fol
lowing pledge:
Section / That we will not write a risk until
rate has beenfxed by the manager and will adhere
all rates fixed by him. that will not issue policy
or policies ourselves. or insurance to be written
by any company at less than said fixed rate, and in
the event of binding any unfxed rate, will submit
an application for rating thereon to the manager upon
the next succeeding business day to that
which the risk was bound.
Sec 2. That will not divide commissions with
rebate to the assured his agent, employee broker
or any other person in any manner directly indi
recty, not party to this agreements will
eel policies in any other form than that prescrbed by
the condition of the policies.
Sec g. That we will hold strictly confidential all
actions and words of the members hereto, and of
special agents of companies either in private
sation OF business meetings. nor attempt to create
foster any prejudice against fellow member his
companies.
A. Thereon
ness buildings mercantile stocks shall not be writ
ten for period of more than year, except that
business buildings may be written at two and half
times the annual rate for three years and four times
the annual rate for five years.
See 5. That we will submit our books and papers
for inspection and ourselves for personal examination
under oath by the managers when the necessity arises
in his judgments refusal of the being deemed
prima facie evidence of guilt.
Sec 9. That we will effect no insurance without
stating the date of commencement and expiration
cept in case of open certificates, the time shall be
closed declared at the end of the succeeding month";
and no shortme insurance shall be transferred from
one building to another.
See 7. That we will not write or renew any policy
ON two buildings. two more divisions of
building separated by entire walls, wall secured
by iron DOORS the contents thereof without spe
cc sum being named on and in such building or dv
sion unless the full consurance clause is attached to
the policy Furniture and fixtures shall not be in
sured with mercantile risks unless a specific amount
manufacturing establishments shall not be insured
less the following form of specifications be observed
viz: Son building. Son machinery. s.
ON engine and boiler. Son stock
Sec 8. All agents shall be responsible for the acts
of their employees and solicitors. and in of
ond ofense through such person, they shall be dis
charged at once and no member to this compact and
pledge shall employ them thereafter
No agency shall employ more than FIVE solicitors,
and such solicitors shall be required to hold the
tcate of the manager designating the agency he rep
resents and such solicitors shall place their business
exclusively with the Office employing them Clerks
shall not be considered solicitors and must be re-
Enumerated by salary only The term solicitor shall be
held to include only those who shall give their entire
time to the business of fire insurance.
Sec 9. That the writing of nonconcurrent policies
is prohibited that where there are two more poll
cies in force any property and different form of
policy is deemed advisable or necessary new form
may be adopted by majority of the agents, who rep
resent companies having insurance the property,
who about to write thereon. When such ma
jority do not agree form of policy the manager
shall prescribe form to which all policies must be
made to conform Immediately without regard to date
of issue Nothing in this section shall be construed to
conflict with the requirement for wording of policies
named in any other section Of this pledge.
Sec 10. No information in regard to the business
of any member shall be given by the manager to any
party or parties, other than to the companies and
their general agents, managers, unless such in
formation relates strictly to violations of this compact
and pledge.
Sec II It is hereby agreed that additional rules
may be adopted, by the unanimous consent of every
party to this agreement, the approval of the
ager provided, expressly, however that such rules
shall Conflict with the letter spirit of this compact
and pledge. In case the manager shall refuse to APP
prove the unanimous consent Of members to any such
proposed additional rule or rules the whole matter or
difference may be submitted for the consideration of
the companies themselves.
PENALTIES.
For violations of sections l. 2, A, 3, g. z, and of
this pledge, the offending member shall be required
to cancel the policy policies under which the of
Tense is committed, and shall be prohibited from
writing upon the same risk or risks for year
In addition, the following fines shall be imposed:
For the first violation fifty per cent. of the premium
but in shall such fine be less than twenty ve
dollars for the second violation, the entire premium
but no case Snall tne nne De less uOufSi
for the third violation the removal of all companies
from the offending member and expulsion from this
board.
For violations of section of this pledge. a fine of
ten dollars shall be imposed by the manager for each
ofense.
This agreement shall take effect when the manager
assumes his office; and the present official tariff of
this board shall remain in full force until other rates
promulgated by the manager In any case of diff
ference as to present official rate any risk the
ayers decision thereon shall be final.
Witness signatures this 18th day of November,
1882.
Signed by all the city agents.