H. H. Woodsmall & Co. v. Steele

Action by appellee, an insurance broker, against appellant, an insurance agency corporation, to recover a commission claimed to be due under a contract by the terms of which, as averred in the complaint, appellee was employed to represent appellant in soliciting a certain large policy of liability insurance, appellee to receive, if the insurance was written through appellant's office, a sum equal to ten per cent. of the premium paid. Appellant filed answer in denial, and a set-off. Trial resulted in a verdict and judgment for appellee. Action of the court in overruling appellant's motion for new trial is assigned as error.

On the trial, evidence was submitted from which the inference might be drawn that appellee at the time the insurance was written was acting as the agent of the insured as well as agent for appellant. It is not, however, as appellant admits in its brief, a necessary inference. Appellant, by tendered instructions numbered 1 and 2, requested the court to charge the jury that if they found from the evidence that appellee at the time did represent both parties, and did so without the knowledge of appellant, he could not recover. The refusal of the court to give these instructions is the chief question presented by this appeal.

An agent who represents both parties to a transaction, where the interests of the parties are adverse, can recover compensation from neither, unless the double employment 1, 2. was, at the time, known and assented to by both. Simons v. Hoover (1871), 35 Ind. 412; Hammond v.Bookwalter (1894), 12 Ind. App. 177, 39 N.E. 872; Scribner v.Collar (1879), 40 Mich. 375, 29 Am. Rep. 541. An agent must act toward his principal in good faith, and good faith requires that he use his best efforts to promote the interests of his principal. This is made impossible where, without his principal's knowledge, he acts for his principal and another in a transaction where their interests are adverse.

If appellant had, in addition to its general denial, filed a proper answer setting up dual agency as a defense, then, under the law as above stated, the instructions tendered would 3, 4. have been proper; but appellant's answer, other than a set-off, was merely a general denial. With the issues thus formed, the question of dual agency was not presented by the pleadings. Reese v. Garth (1889), 36 Mo. App. 641; Gray v.Novinger (1912), 166 Mo. App. 85, 147 S.W. 1128; Schwartz v.Meschke (1914), 92 Kans. 650, 141 P. 175; Jacobs v. Beyer (1910), 141 App. Div. 49, 125 N.Y. Supp. 597; Childs v.Ptomey (1896), 17 Mont. 502, 43 P. 714; Franck v. Blazier (1913), 66 Or. 377, 133 P. 800; Northwest Land, etc., Co. v.Addington (1917), 98 Wn. 576, 168 P. 164; Moore v.Damron (1914), 157 Ky. 799, 164 S.W. 103. See, also, McAfee v. Bending (1905), 36 Ind. App. 628, 76 N.E. 412.

It is a fundamental rule of practice that instructions to the jury should be confined to the issues. Hatton v. Hodell Furniture Co. (1920), 72 Ind. App. 357, 125 5, 6. N.E. 797. The propriety of an instruction is to be determined, not by whether it embodies a correct statement of the law upon a given state of facts, but whether it states the law relevant to the issuable facts given in evidence on the trial. Indiana R. Co. v. Maurer (1903), 160 Ind. 25, 66 N.E. 156.

Evidence having been introduced at the trial from which the jury might or might not have inferred that appellant at the time was, as to the same transaction, acting as the agent of 7. both parties, and so acting without the knowledge of appellant, it would have been within the rights of appellant (leave of court being granted) to amend its answer so as to present the issue. This was not done. Instead, appellant sought to have the jury instructed just as if the issue had been presented by the pleadings. There is nothing in the record to show that in the introduction of evidence the court and the parties treated the issue of dual agency as having been presented. The trial court did not err in refusing to give tendered instructions one and two.

Other instructions tendered by appellant, in so far as they correctly state the law applicable to the issues as presented by pleadings, were covered by instructions given. The 8. instructions when taken as a whole fairly state the law of the case.

Affirmed.