Court Opinion

ID: 6993106
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:28:27.054106+00
Date Added: 2024-06-11T16:09:40.756701
License: Public Domain

Green, P. J. This is a prosecution for violation of a city ordinance brought by the appellee, the city of Alton, against the appellants, A. B. McKinney & Son. The ordinance in question is as follows: “Eleventh. Insurance agents representing corporations, companies or associations engaged in the business of soliciting or effecting life, fire or marine insurance, shall pay the sum of 825 per year, and such license may he taken out for any term, not less than three months, nor more than one year.” The prosecution was instituted before a justice of the peace where the default of the defendants was entered and a fine of 85 and costs was imposed. From that judgment an appeal was prosecuted to the Circuit Court of Madison County, on a stipulation signed by the parties, by which it was agreed that this was to be a test case as to the validity of said ordinance. The case was tried in the Circuit Court by a court without a jury, and the court held that the ordinance was valid, and fined the defendant 85 and costs. This appeal is taken from that decision of the court. The only question involved is as to the power of the city of Alton, incorporated under the general law of the State, to pass the ordinance in question. The provisions of the organic act or charter, by which a municipal corporation is created, restrict and fix the limits of its legislative powers. It can enact and enforce such ordinances only, as would be embraced within the limits of the granted power. In this case, it appears appellee is organized under the general incorporation act of this State, and claims the power is granted to enact and enforce the ordinance in question, by the terms of paragraph 91 of Sec. 1, Art. 5 of that act, which is as follows: “To tax, license and regulate auctioneers, distilleries, breweries, lumber yards, livery stables, public scales, money changers and brokers.” The controversy arises over the question: What is the true definition and meaning of the word “brokers,” as used in the act? If by the use of that word the legislature meant and intended to include “ insurance agents representing insurance companies,” then the ordinance, as to appellees, is valid, otherwise not. In order to give a true construction to the paragraph quoted, and thereby correctly solve the question presented, certain well recognized rules apply. Among these is the rule that the legislature must be presumed to have used the word “ broker’s ” in its known and accepted signification, and intended, by the use of that word, to confer upon municipal corporations in this State, the power to tax and license those persons only, whose vocation was that of a broker, as the term is generally understood. In our judgment there is a marked and well defined distinction between “insurance agents representing corporations,”and that of mere brokers. Such insurance agents during their employment sustain a fixed and permanent relation to the companies they represent. They are clothed with general powers and authority, and assume responsibilities not conferred upon or assumed by brokers. They owe duty and allegiance to the companies employing them, and seek patronage only for the profit and benefit of such, and are precluded from soliciting insurance business for others. The term bi-oker, or insurance broker, is generally understood to mean a person who owes no duty or allegiance to any particular corporation. He is not one representing a particular corporation or corporations, within the meaning of the ordinance.' He is free to procure insurance for others in any company he may select, and to solicit and procure business and patronage for any insurance company or companies he may select. In short, we agree with counsel for appellee, that an insurance broker may be for certain purposes and at certain times an “agent,” but an insurance agent representing corporations engaged solely in insurance business, can not be an insurance broker or act as such. The views expressed by us, we think, are fortified by the authoi'ities. “Insurance brokers procure insurance and negotiate between insure2’s and insured.” Bouvier’, Law Dict., title, “broker's.” In Lycoming Ins. Co. v. Ward, 90 Ill. 545, it; is said: “ If a party contracts with an agent for an insurance company for an insurance, and pays such agent the prernium, the payment will be binding on the company whether the agent pay over the money or not. But if a premium is paid to a person by the assured, knowing at the time he was not an agent of the company, but only a street broker, the policy can not be enforced unless he pays over the money.” In Kings Co. Ins. Co. v. Swigert, 11 Ill. App. 590, it is also said: “One who solicits insurance of the assured, and afterward procures a policy to be issued by the insurer, is not an agent of the latter. Sor does the fact that the insurer places its policy in the hands of the broker for delivery make him an agent.” Ben Franklin Co. v. Weary, 4 Ill. App. 74, is to the same effect. Many other cases in point might be cited, but we deem it unnecessary. Our conclusion is that the word “brokers,” used in the act,- did not mean or “include” insurance agents representing corporations, companies or associations engaged in insurance business. Hence no power was conferred on appellee to enact and enforce said ordinance, and the same is void. The court erred in holding the ordinance valid, and entering judgment against defendants. The judgment is reversed and the cause will not be remanded. Judgment reversed.