Court Opinion

ID: 7973182
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:57:07.754148+00
Date Added: 2024-06-11T16:34:49.514329
License: Public Domain

DOUGLAS, J.
(dissenting).
I am unable to assent to the conclusion reached by the court. In my judgment defendant Ferguson is an insurance agent within the meaning of section 87, and such insurance contracts were, to quote-the language of the act, “unlawfully made by or through him” on behalf of the companies not authorized to do business in Minnesota. It is not disputed the legislature has authority, in the exercise of the police power, to provide reasonable regulations in the matter of the writing of insurance throughout the state. The legislature may even bar foreign companies from doing business here at all, or establish conditions as a basis therefor, and as an incident provide that any insurance agent who directly or indirectly negotiates such insurance shall be liable as a coinsurer for all losses incurred by any company under the terms of the policy so negotiated. Statutory regulations of this nature exist in Connecticut (Laws 1889, p. 55, c. 107), and have been upheld by the courts of Pennsylvania and Alabama. McBride v. Rinard, 172 Pa. St. 542, 33 Atl. 750; Noble v. Mitchell, 100 Ala. 519, 14 South. 581. See also Paul v. Virginia, 8 Wall. 168; Hooper v. California, 155 U. S. 648, 15 Sup. Ct. 207. The purpose of the-legislature in enacting section 87 was to protect the public from the evil results incident to the writing of insurance throughout the state by so-called “wild cat” companies, and the provision making the agent negotiating such unauthorized insurance liable upon the contract nego*94tiated was intended to operate as a check against the increase of such business.
Inasmuch as the court dismissed the action when plaintiffs rested, our inquiry is restricted to the question whether it appears prima facie that defendant by his acts brought himself within the provisions of this section, and thereby created a liability against himself. Daniel A. Webster, one of the plaintiffs, testified as follows:
Q. Well, didn’t you request him to write to other insurance agents? A. I did not. Q. You know, as a matter of fact, he did write to other insurance agents? A. I know it now; yes. Q. That he had written to other insurance agents ? A. When ? Q. To see if they couldn’t place the insurance? A. In answering that question, when he told me that his company wouldn’t take the risk I said I was up a stump for insurance, and he says, “No, I will write to somebody else.” Q. What did you say when he said he would write to someone else ? A. I said, “All right.” Q. You knew his companies wouldn’t take the insurance when he said he would try someone else ? A. I knew he told me that.
It appears defendant knew, and plaintiffs did not know, at the time the latter paid the insurance premiums to defendant and he in turn remitted it (less his commissions) to the regular agents, that said companies were not authorized to do business in Minnesota. It is true plaintiffs were informed of this fact prior to their letter of June 11, but at that time the rights of all parties had become fixed, and the transaction closed. As appears from this letter, plaintiffs at that time (not the defendant as is suggested in tire majority opinion) objected to the policies. At and prior to the time of the delivery of the policies plaintiffs were, as I read the record, misled into believing that the companies were authorized to do business in the state. Defendant assumed authority to collect the premiums, and retained a commission without criticism by the insurance companies, and without the knowledge of plaintiffs.
In my opinion the evidence quoted, read in the light of the undisputed facts, clearly tended to show that defendant solicited and negotiated the insurance in question, also that he was not only an insurance agent within the meaning of the term as used in section 87, but was the *95agent of said companies, particularly so in view of the last paragraph contained in section 25 of said act, which provides that: .
Any person who solicits insurance and procures the application therefor shall be held to be the agent of the party thereafter issuing the policy.
To hold that defendant was not the agent of the insurance companies, but, on the other hand, the representative of plaintiffs, and therefore not liable, will, in my opinion, open the door in Minnesota to the transaction of insurance business by such companies, and furnish them an easy method of violating its public policy as expressed by the legislature.