Arrant v. Georgia Casualty Co. , 212 Ala. 309 ( 1924 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The propositions of law upon which appellant bases his right to recover under his pleas of recoupment are thus stated by his counsel in their brief:

(1) Property rights exist in information, and one who spends time, money, labor, and thought in codifying and tabulating information is the owner of it.

(2) Such owner may communicate such information to another without thereby destroying his property rights in it, and one who acquires such information by virtue of a confidential relationship with the owner, or for a contractually limited purpose, cannot use it for other purposes to the prejudice of the owner, without his consent.

In a general way, these propositions seem to be well supported by the authorities. F. W. Dodge Co. v. Construction Inf. Co., 183 Mass. 62, 66 N.E. 204, 97 Am. St. Rep. 412; Int. News Service v. Associated Press, 245 U.S. 215, 39 S.Ct. 68,63 L.Ed. 211, 2 A.L.R. 293; Board of Trade v. Cella Commission Co., 145 F. 28, 76 C.C.A. 28; McDearmott Com. Co. v. Board of Trade, 146 F. 961, 77 C.C.A. 479, 7 L.R.A. (N.S.) 889, 8 Ann. Cas. 759; Merriweather v. Moore, 61 L. J. Ch. 505. It must be understood, however, that where the information is accessible to others there can be no ownership of the information itself, but only of the memorial thereof — thecollective form into which it has been cast by the labor of the claimant.

The question here presented is whether a tabulated list of the policies written by appellant, showing the dates of their expiration, compiled by appellant during his agency for the insurance company, and communicated by him to the company byreason of and in the course of the agency, became and remained the property of the agent in such sense that, after the termination of his agency, his principal, the insurance company, could not use it in the prosecution of its business in competition with the agent's general business.

Ordinarily, under the general principles of law which regulate the relation of agency and fix the obligations of the contracting parties with respect thereto, a list or compilation such as that referred to would belong to the principal, and not to the agent. Empire, etc., Laundry v. Lozier, 165 Cal. 95,130 P. 1180, 44 L.R.A. (N.S.) 1159, Ann. Cas. 1914C, 628; Mackechnie Bread Co. v. Huber, 60 Cal.App. 539, 213 P. 285; Witkop, etc., Co. v. Boyce, 61 Misc. Rep. 126, 112 N.Y. S. 874; Pomeroy Ink Co. v. Pomeroy, 77 N.J. Eq. 293, 78 A. 698.

Appellant seems to recognize this principle, and seeks to avoid its effect by alleging that:

"There was a generally recognized custom in the state of Alabama, which custom was known to both the plaintiff [the company] and the defendant [the agent], and was in force and effect at the time of making said contract, and with reference to which custom said contract was entered into, under which custom, as between the general agent of a casualty insurance company and the company, for the purpose of soliciting renewals of expired policies, or policies that would expire thereafter, obtained or issued through the work and labor of such general agent, the general agent * * * had as to that purpose full, complete, and exclusive ownership of all knowledge, information, and data obtained, collected, or compiled by the agent, or by the company during the agency relation,relative to the expiration and renewals of policies procured from the company through the efforts and labors of such general agents."

But "no [custom or] usage is good which conflicts with an established principle of law, any more than one which contravenes or nullifies the express stipulations of a contract." East Birmingham Land Co. v. Dennis, 85 Ala. 565,569, 5 So. 317, 2 L.R.A. 836, 7 Am. St. Rep. 73; Byrd v. Beall, 150 Ala. 122, 43 So. 749, 124 Am. St. Rep. 60; People's Bank v. Walthall, 200 Ala. 122, 75 So. 570; U.S. L. C. Co. v. Cole, 202 Ala. 688, 81 So. 664; Zimmern v. So. Ry. Co.,209 Ala. 284, 96 So. 226, 29 A.L.R. 1237.

This principle, we are constrained to hold, is applicable to the facts shown, and is fatal to appellant's right to recover.

Section 14 of the contract binds the agent to serve no other competitor company during the agency; section 3 requires him to "use the utmost diligence and give his best efforts to the procuring of business and writing and issuing policies of insurance on behalf and for the benefit of the company"; section 4 requires him to "keep a true and complete record of all policies of insurance issued by him on behalf of the company; and section 5 to make a true and correct daily report of all policies issued; section 8 requires the agent to "render to the company a true and complete statement, in form such as the company may require, showing the number and descriptions of and amount insured by all policies written or issued by or by authority of the agent"; and section 2 binds the company to furnish policy registers and books of account, * * * in which, by said agent, shall be faithfully and correctly entered, written and recorded all transactions, or matters connected with the business of the company * * * transacted by said agent. * * * Provided that all forms of policies and manuals, books of account, and other documents furnished by the company to said agent, as well as all letters and applications received, records and other documents and papers, or copies of same, relating to the business of the company, are and shall be and remain the property of the company, and shall be delivered to the company * * * on demand therefor." (Italics supplied.)

These provisions are a clear and direct negation of appellant's theory of his ownership of the expiration lists, and the information tabulated therein, by virtue of a custom prevailing in the insurance business in Alabama, though it was known to the parties, to say nothing of the repugnance of the asserted custom to the general principles of the common law of principal and agent, adverted to above.

For this reason, if for no other, we think the demurrers to the special pleas of recoupment were properly sustained.

Of course if the agent, before entering into this contract with the insurance company, had compiled a list of outside customers, showing the dates of their policy expirations, and that list had been improperly obtained, or had been confidentially obtained for a limited purpose only, by this company, and was improperly used by it to the agent's injury, a different question would be presented. But the pleas make no such case, though they hint more or less obscurely at the use of information gathered by the agent before his contract with this company was made.

Other objections to the sufficiency of the case made by the pleas are pressed in argument, but it is not necessary to consider them now.

Let the judgment be affirmed.

Affirmed.

ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.