Court Opinion

ID: 6515715
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:26:27.049551+00
Date Added: 2024-06-11T15:55:01.091992
License: Public Domain

HARALSON, J.
1. The demurrer to the 2d plea was properly sustained, for that the plea denied the ownership of the claims sued on, and was not verified as required by rule 29, page 810 of the Code.
2. There was no error in sustaining the demurrer to the 4th plea. Each cause of action in the complaint (73 in number) is distinct and separate from every other one, as much so, as if 73 promissory notes had been declared on, separately, in the same complaint. The principle which forbids the splitting of the same cause of action by bringing two or more suits upon it, has no application here, as the theory, on which the plea is filed, assumed.
3. The real contest in this case, evidenced by the procedure in the court below and the arguments filed in the cause, was upon the demurrer to the 3d plea — as to whether or not the facts therein set up, and as pleaded, constitute a good defense to this action, and preclude a recovery by the plaintiff. The bill of exceptions states, that “The plaintiff introduced in evidence each one of the several policies named in the complaint, separately, together with the receipt for the return of the premiums, and the authority to collect the same by the plaintiff endorsed on it, and a transfer and assignment of Dangaix, Crowder & Co. to the plaintiff of all their interest in said return premiums. Plaintiff also proved the other averment in said complaint.’’ This .statement shows that every allegation in the complaint was proved; which entitles the plaintiff to a judgment, unless it appears that he is precluded by matters set up in said plea.
4. It is a principle of universal prevalence, that an agent must not put himself, during the agency, in a position which is adverse to that of his principle. — 1 Parsons on Contracts, p. 93. This rule can not, perhaps, be more comprehensively and concisely stated, than as we find it in the American notes to Keech v. Sandford, 1 *394Lead. Oases in Eq. 53 : “Wherever one person is placed in such relation to another, by the act or consent of that other, or the act of a third person, or of the law, that he becomes interested for him, or interested with him, in any subject of property or business, he is prohibited from acquiring rights in that subject, antagonistic to the person with whose interests he has become associated.” Davis v. Hamlin, 108 Ill. 40.
We have been unable to find any decided case, or to find the principle asserted in any text-book on agency, which lays down the proposition, that one who has acted as an agent of another, whose agency has terminated, may not, thereafter, if he act in good faith and without fraud, engage in business in competition with, and even to the injury of his former principal. The law has not attempted to prescribe rules for the conduct of one who leaves the service of his first employer and enters that of another. The only restraint the law lays on the retiring agent is, that he must tell the truth when he speaks of his former employer and his business, and shall be guilty of no fraud or deceit at his expense, for the profit of himself or another. If he does, he is personally responsible for the damage he causes.
An insurance agency is a profitable and useful business employment. A good and capable agent of the kind, often controls a large patronage and enjoys a valuable good-will, which he may use or sell. If he should cease to represent one company, and engage to represent another, to the great disadvantage of the first, there is no law to prevent his doing so. Every one who employs an agent does so with the certain knowledge that his agency may terminate at any time, except in so far as it is restrained by contract, and that the agent may transfer himself with all his information, skill and patronage to another rival in business, or set up on his own account, in a competing line. Such persons are hired, often, in consideration of the trade that follows them, and this is legitimate, to the extent that it is fairly influenced.
5. We have thus stated the law as favorably as may be to the claims of the plaintiff. On the other hand, it is certainly true that there are obligations which continue and follow an agent after the termination of his agency. We have a fair illustration of this principle in Edmonstone v. Hartshorn, 19 N. Y. Ct. of App. 9, which *395was a suit by an agent for Ms salary. It was shown that he had been employed by the defendant to reside in the island of Cuba, as his agent for procuring orders for the manufacture of engines ; that he was to be paid $2,400 per annum in equal monthly instalments ; that .after remaining in Cuba some eight months, plaintiff returned to New York and presented his bill to defendant for the .residue of his salary. It was shown in defense, that when the plaintiff left Cuba, he was engaged in a negotiation with a Mr. Bequir for the construction by defendant of a steam engine to be set up on his plantation; that several letters had passed between Bequir and the plaintiff in reference to the character and price of the engine, and the time of delivery. The terms proposed by the plaintiff were accepted by Bequir, in a letter written before the plaintiff left Cuba, but not received by him until after his arrival in New York, and the presentation by him to the defendant of his claim for his unpaid salary; that a few days afterwards, the plaintiff gave the order for the construction, of Bequir’s engine to a rival establishment by which it was constructed, and the defendant could have complied with Bequir’s order within the time limited by it for delivering the engine, and that the profit would have exceeded the entire amount of the plaintiff’s salary. Judgment was rendered for the plaintiff. On appeal, that judgment was reversed, — five out of the eight judges concurring. It was held, that if the plaintiff, on his arrival in New York, desired to take no further care of defendant’s business, it was his plain duty to have communicated to him the fact that such a correspondence existed; and when in New York, he received Bequir’s letter of the 8th of June, with which, except as agent of defendant, he had no concern, he should have transmitted it or communicated its contents to. him, and to that extent, at least, he had a duty unperformed which he remained bound to perform to defendant, though his agency was at an end. The court held he was not entitled to recover.
In the case of the American Steam Boiler Ins. Co. v. Anderson et al., 6 N. Y. Supplement Reports 507, the defendants had been the agents of the plaintiff, and as such, insured Hoe & Co. with the plaintiff company, issuing to them two policies to run for three years. By the agreement between plaintiff, and defendants, the latter were *396to receive 30 per cent, on all premiums received by them on policies issued through their agency. .They received this per cent, on the premiums for these two policies, for the entire term they were to run. Before the expiration of the policies, defendants left the service of plaintiff and became the agents of another insurance company, and solicited Hoe & Co. to cancel their policies with plaintiff, and take others in their new company, which they did, and plaintiff, retaining the customary short rate, for which the policies provided in case the insured should • at any time desire to cancel them, paid the balance of the premium to the insured. The plaintiff sued the defendants' for damages for procuring the cancellation of the policies. The court held that the defendants were, under the terms of their contract, liable to plaintiff for 30 per cent, of the returned premiums, and it was no error to so direct. This case on appeal was affirmed, the court holding, that the power of an agent to create rights by contract for his principals includes an implied duty to observe, and not to defeat or destroy them. — s. c. 29 No. E. Rep. .231.
6. Under, the policies described in the complaint, it is not denied that the policy.holders had the absolute right to a cancellation of their policies at any time, and were further entitled, by the terms of their contracts of insurance, to have their unearned premiums refunded to them, immediately upon the .cancellation of their policies. This was their legal right, and however wrong and inexcusable, in a moral and legal sense, it may, have been for the plaintiff, to induce them to. cancel their policies and insure with him in other companies, this could not affect their right to cancel, if they. elected to exercise it. It is certainly true, that having exercised it, they, could have brought and maintained their respective suits against defendant to recover these premiums, on its refusal to pay them. If the policy holders had the right to sue, they had the right to seil and transfer their causes of action to another ; and to sustain this plea, we would have to deny their assignee the right to sue, which, without more, under 'the established rules of pleadings, we can not do.
There was no error in sustaining the demurrer to this plea, nor in excluding the evidence offered on the trial to support its averments. The facts set up ,in said plea *397were not available under the general issue.
7. The authorities to which we have referred maintain the principle, to which we give sanction, that when the plaintiff procured these policies to be issued by the defendant company, and was paid by it to procure them, there was an implied obligation on him, supported by the consideration he had been paid by defendant, as binding as if it had been expressed, and which was continuous during the life of the policies, even after the termination of his agency, that he would not deprive defendant of the fruits of the services it had employed him to render. The policy holders, as we have said, had the unquestioned right to cancel their policies and demand repayment of their unearned premiums ; and if they did so, of their own accord, at any time, whether before or after the termination of plaintiff’s agency, the plaintiff was in no sense responsible for the act; but, for him, when he quit the defendant’s employment, and for purposes of his own gain, to turn about and induce those who had insured with defendant to cancel their policies and insure with him in another company, or in other companies, thereby depriving defendant of the benefits of premiums on policies which he, as its agent had procured, for a certain per cent, of the premiums paid to and still retained by him, was a violation of duty he owed defendant, which finds no sanction in law. Such a course is at war with all proper business principles. If the defendant had known that plaintiff would pursue this course, every one knows it would not have employed him. We have felt impelled to say this much, lest a bare ruling on this plea, might seem to imply a sanction to the course alleged to have been pursued by plaintiff to acquire the title to those causes of action, on which he has obtained a judgment which we affirm.
8. If the defense attempted to be set up in said plea, had been presented by a plea of recoupment properly pleaded; or, if on a proper statement of the facts in a plea to show the fraud, supported by affidivit, it had been made to appear that the transfer to him of these causes of action had been fraudulently procured by plaintiff, and denying his right and title to them, it might have been, that a defense would have been presented in such form as to resist the assault of a demurrer. But, this we need not decide, since such pleas áre not before us.
Affirmed.