Taylor v. De Camp

NOURSE, P. J.

Plaintiff sued as the assignee of the State Assurance Company, Ltd., to recover premiums from The General Agency, a partnership, its agent, and joined the American Surety Company on its bond assuring the fidelity of the agency. The cause was tried with a jury, which returned a verdict against The General Agency and V. E. De Camp and L. P. Swayne Companies as partners therein and against the American Surety Company, but in favor of the defendant Charles H. Dickinson. Thereafter the trial court granted a new trial as to the American Surety Company on the ground that the evidence was insufficient to support the verdict. Plaintiff appealed from the portion of the judgment on the verdict in favor of defendant Dickinson and also from the order granting a new trial to the American Surety Company. The appeal is taken on typewritten transcripts.

The plaintiff’s assignor employed The General Agency to solicit and issue fire and automobile insurance policies, collect premiums thereon and to generally exercise the powers usually given an insurance agency. The contract reserved to the employer the right to decline any business offered and to cancel policies which it considered undesirable. It required the agency to make periodic remittances of the net premiums to the insurance company within seventy-five days from the end of the month in which the business was written. Acting under the terms of the contract the agency sold a considerable amount of insurance, deposited the premiums collected thereon in a bank account under the name of The General Agency, and from time to time made remittances to its employer through cheeks of The General Agency. Disputes arose as to the character of some

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of the business written by the agent and a large number of policies were canceled by the employer either directly or by the agent acting upon orders of its employer. On February 25, 1926, the employer, exercising the power given in the contract, directed the agent to cease from writing any further business. At the same time the agent was directed to keep its offices open for the purpose of winding up the business, i. e., to collect premiums outstanding and to refund unearned premiums upon the canceled policies. When the suit was filed the plaintiff claimed that the agent owed on the contract a sum in excess of $9,000. The defendant De Camp, who at all times was in active charge and control of the affairs of the agency, defended on the grounds, first, that acting in good faith under the contract the agency had expended a large sum of money in the establishment and maintenance of offices in San Francisco and Los Angeles for the use and benefit of its employer, and second, that it was prevented from maldng collections of premiums because of the employer’s wrongful and malicious cancellation of business written by the agent. The defendant Dickinson answered separately, denying that he was at any time a member of the partnership doing business under the name of The General Agency and denying that he was at any time a member of a partnership doing business under the name of L. P. Swayne Company. The L. P. Swayne Companies, a corporation, filed a separate answer denying that Dickinson and L. P. Swayne individually were copartners with De Camp doing business under the name of The General Agency. The American Surety Company admitted the execution of the surety bond and specially raised the issue that its liability was limited for loss sustained by the State Assurance Company, because of “any act or acts of fraud, dishonesty, forgery, theft, embezzlement, wrongful abstraction or wilful misapplication of funds on the part of said The General Agency”.