Brunson v. Bankers' National Life Insurance , 140 S.C. 31 ( 1927 )

June 14, 1927. The opinion of the Court was delivered by This action, by the plaintiff, De Witt Brunson, against the defendant, Bankers' National Life Insurance Company, was commenced October, 1924, alleging damages for an alleged breach of contract. The case was tried before his Honor, W.H. Townsend, and a jury, at the fall term, 1925, Court of Common Pleas for Sumter County, and resulted in an order of nonsuit. From this order of nonsuit, the plaintiff has appealed to this Court, alleging error in the particulars set forth under exceptions, which will be reported, together with the complaint and amended answer.

The Circuit Judge issued an order of nonsuit giving as his reasons therefor that the plaintiff, not having procured a license to act as an insurance agent for the defendant, the plaintiff was not in a position to contend that there was a valid contract of employment with the defendant insurance company, and that, therefore, no cause of action ex contractu could arise.

Under the view this Court takes of the case, the only question germane to the appeal is, Is the procurement of a license to work as an agent for an insurance company a prerequisite to entering into a contract with such insurance company to work as such agent? So much of the testimony as is pertinent to this question tends to show the following statement of facts: In the early part of 1924, the plaintiff entered into a contract with the defendant at Sumter, S.C. through its duly authorized representative, to work for the defendant as an insurance agent; the plaintiff's work to consist of writing insurance and collecting a debit that was formerly handled by a Mr. Gainley, who had died — the defendant being engaged in the business of writing industrial insurance, and the debit is the amount of weekly premiums collected on a certain route from a list of policy holders in the company. Mr. Hopkins, the representative of the insurance company at the time the contract was made, represented to the plaintiff that it was a good position, and the parties contracted on the terms agreed upon as follows: The plaintiff was to work for the defendant, performing the work above stated, at the sum of $20 a week and 15 per cent. of the debit. At the time this contract was made, the plaintiff had a position offered him in the post office which would have paid him about $1,800 per year, and he took the position with the insurance company, defendant herein, in preference to that position, on the recommendation of Mr. Hopkins, the duly authorized representative of the defendant insurance company; the said representative of the insurance company having stated to the plaintiff that the position with the insurance company was a better position, and that there was a greater opportunity for promotion, it being agreed between the parties at the time that the plaintiff would work for a year at least, and, if the plaintiff made good, he would have a promotion. In the plaintiff's testimony, he stated:

"I accepted the job and started to work the next day after Mr. Hopkins hired me.

"I went out on the debit with Mr. Hopkins, who wanted to show me where to collect the money and to break me in on the debit. I worked for about two weeks, when Mr. Hopkins died. After his death, I continued to report at the company's office until a gentleman by the name of Thornley came down and discharged me. He told me that he had brought a man over to take the job that morning; that I was an inexperienced man and he could not keep me at that salary. The matter of my license as an insurance agent was mentioned between Mr. Hopkins and myself. We were coming up from Gable, and he told me he would have to have the license issued to me and I would have to pay for it. I told him, ``All right, go ahead and have it issued.' He did not ask me for the money. I suppose he was to get it when he got the license. He told me I would have to have a license and he would get it for me, and I told him to go ahead and get it. He never got the license. The matter of license was not mentioned by Mr. Thornley when he came here. I could have applied for the license if I had not expected Mr. Hopkins to get it. I did not apply for it because the man who hired me told me he would get the license for me.

"He engaged me two weeks before his death, and during the time I worked for him I had no license. During this time he was breaking me in. It was on Thursday of the second week that I worked for him that he told me that he would get the license for me. He died the following Monday. I relied upon Mr. Hopkins to procure the license. Mr. Thornley discharged me two or three days after Mr. Hopkins' death, and I could have applied for a license if Thornley had not discharged me."

The witness White, in his testimony, makes this statement: "An agent has to have a new license for each company he represents." This statement of the witness White seems to be in accordance with the provisions of the statute governing the issuing of licenses to agents. Section 4069, Vol. 3, of the Code of 1922, reads as follows:

"Before doing business in this State for any insurance company or association, each agent shall procure from the insurance commissioner a license for which he shall pay one-half dollar as an annual department license fee. Before issuing such license the insurance commissioner shall determine that the agent is a fit and proper person. Such license shall expire on March 31 of each year. * * *"

In the case of Ballentine v. Covington, 109 S.C. 217;96 S.E., 92, this Court held that contracts of insurance by unlicensed persons are void. Clearly, this Section 4069 forbids the doing of business by an unlicensed person, but it does not follow that a person may not lawfully contract with an insurance company to do business before securing his license. On the other hand, this Court is of the opinion that a person may enter into a valid contract with an insurance company of the nature of the contract alleged in this case before procuring a license. A separate license is to be procured for each company that a person works for, and a person must necessarily be expected to have a contract with an insurance company before procuring a license to work for such company. A person would not be expected to procure a license to work for a company, not knowing whether he would work for the company or not. Furthermore, the testimony quoted above tends to show that the defendant agreed to procure a license for the plaintiff and that the plaintiff relied upon this agreement; otherwise he would have procured the license. If further appears that the question of license did not enter into the discharge of the plaintiff.

It is the opinion of this Court that his Honor, the Circuit Judge, erred in granting the order of nonsuit, and it is the judgment of this Court that the judgment of the Circuit Court be and is hereby reversed, and the case remanded for a new trial.

MR. CHIEF JUSTICE WATTS and MESSRS. JUSTICES COTHRAN, BLEASE and STABLER concur.